For industrial distributors, outbound freight costs usually rank toward the highest among budget categories. Even so, no one will argue the overall cost effectiveness of parcel carriers. After all, what distributor can deliver a 10-pound case of material 500 miles away for $4.39? UPS, FedEx and DHL have empowered distributors to break down all geographic barriers.

By providing software and other automation benefits free of charge, parcel carriers make it easy to use their shipping services. But many distributors lose sight of the actual costing structure. Parcel carriers charge for services based on three factors: weight, quantity delivered to one location, and location of the delivery, called a zone.

While there is nothing a distributor can do about distance, there are methods to minimize the factors of weight and package quantity.

Eighty to 90 percent of distributors use United Parcel Service (UPS) as their preferred carrier. UPS provides well-documented standards for the use of their service. The primary factor for UPS is weight. "Weight" is the number of pounds of the package as determined by a scale, called actual weight. Larger packages are charged a flat weight based on the size of the package, called dimensional weight.

Dimensional weight is determined by turning the case so that the largest dimension is vertical, then measured for girth. Add the height of the case, and if that calculation is 84 in. or less, the delivery charge is based on the actual weight of the case. Values exceeding 84 in. are considered in cost degrees of "oversized."

The total weight of a parcel package is typically made up of the box, the product, some type of dunnage (paper, peanuts, bubble wrap, etc.) and the closure method, usually box sealing tape. Of the components of the package, the only one that provides choices in weight reduction is the dunnage.

Select a dunnage material that will provide protection but be as light as possible (inflatables, styrene peanuts, bubble wrap). Heavier dunnage materials (paper or shredded cardboard) cause the total package weight to break the next pound barrier, increasing the delivery charge paid.

The second factor that determines the delivery charge per shipment is the package quantity. The price to ship a one-pound package ranges from $3.23 to $4.00 depending on the zone to which you are shipping. UPS charges begin on average at $3.62 to handle a package, and increase as weight and distance increase. An opportunity exists to eliminate that average rate.

As an example, two 10-pound packages shipped from zone 2 (Baltimore) to zone 5 (Memphis) cost $5.51 each for a total of $11.02. Combining the two packages together with plastic strapping or filament tape to make one 20-pound package will receive a shipping charge of $7.68, a savings of $3.34. The flat charge of the second package has been eliminated.

There is no disputing the fact that parcel carriers offer tremendous value. Implementing simple practices for the preparation of parcel packages will allow you to leverage that value while paying as little as possible to do so.