Don't Let Address Errors Break the Bank
When it comes to small parcel shipping, one small mistake can yield big consequences, especially when it comes to incorrect addresses. Shipping to the wrong address can result in lost packages, frustrated customers, and significant address correction fees.
Carrier Address Correction Fees
UPS and FedEx, two of the largest small parcel carriers, offer address correction services for an additional fee. The fees for these address corrections vary depending on the carrier, service type, and the correction that is needed.
To help you better understand the importance, here are some details to consider:
- For UPS, the address correction fee is $19.50 per package for both UPS air and ground shipments, with a maximum correction fee of $136.50 per shipment.
- FedEx, on the other hand, charges $21.00 per package for both air and ground shipments, with a maximum correction fee of $147.00 for their express service and $63.00 for their ground service.
The Cost of Address Corrections
These fees may seem small, but they can add up quickly for companies that ship a high volume of packages. At ShipMatrix, we have seen larger organizations spend over $100,000 per year on address correction fees alone. More than 64% of the total address correction fees were incurred due to repeated shipping to the same incorrect address. Shockingly, some companies have had to bear a cost of up to $6,500 for a single incorrect address.
Impact on Shipping Costs
In addition to the actual address correction fee, it is important for companies to consider the impact of this fee on their overall shipping costs.
For example: if a shipper has an average shipment cost of $12-$13 and they have to pay an address correction fee of $20, then the unexpected cost is 60%-69% higher than the original shipment cost.
This can have a significant impact on a company’s bottom line, especially for small businesses or companies with tight profit margins.
Taking Preventative Measures
To prevent the need for address corrections, it is crucial for companies to take proactive measures whenever possible. This can include:
Implementing Front-End Address Validation and Classification to Avoid Costly Address Corrections
Step 1: Assess your current address verification process
- Determine your current process for verifying and classifying shipping addresses
- Evaluate the effectiveness of your current process and identify areas for improvement
Step 2: Research and select an address validation software
- Conduct research on software solutions that offer real-time address validation and classification
- Evaluate the cost and features of each solution
- Select the software that best meets your business needs and budget
Step 3: Integrate the software into your existing systems
- Work with your IT team to integrate the address validation software into your shipping systems
- Train your staff on how to use the software effectively
- Ensure that all shipping employees understand the importance of valid and accurate shipping addresses
Step 4: Standardize and classify shipping addresses
- Develop a standard format for all shipping addresses to ensure consistency
- Classify addresses based on their type: residential or commercial
- Ensure that address classifications are accurate to avoid unnecessary fees and invoice adjustments
Step 5: Encourage customers to verify and update their shipping address
- Add prompts during the checkout process to encourage customers to verify and update their address
- Implement a regular communication process with customers to remind them of the importance of accurate address information
Step 6: Monitor and track errors and costs
- Continuously monitor the effectiveness of your front-end address validation and classification process
- Track the number of corrections and associated costs before and after implementing the software
- Evaluate the impact of the software on your bottom line and customer satisfaction
Ensuring address accuracy is crucial in small parcel shipping. This helps avoid costly address correction fees, prevent potential loss of customers to competitors, and maintain customer satisfaction. By implementing proactive measures such as front-end address validation and classification, companies can prevent the need for address corrections, improve the accuracy of their shipping addresses, and save on shipping costs. By following the steps provided and integrating an address validation software into your existing shipping systems, you can be confident in the accuracy of your shipping addresses and improve your bottom line while keeping your customers happy. Don't let address errors break the bank or damage your reputation, take action now to prioritize address accuracy and improve your address validation and classification processes.
