The Surprisingly High Cost of Parcel Shipping Address Errors and How to Eliminate Them

Shipping Address Corrections Can Cost Your Company Thousands of Dollars

Carrier address correction surcharges on parcel shipments can be costly, and for e-Commerce shippers, they significantly negatively impact the profitability of their online store.

A carrier address correction surcharge is the fee charged by the carrier if the address on your package does not match what the carrier’s system determines it should be.

• In 2022, UPS raised its address correction charge to $18.00 per package for domestic and international shipments.
• FedEx 2022 address correction charges are $19.50 per package for deliveries using FedEx Express Multiweight pricing.

Yet despite these high surcharge costs, many companies continue to ship packages without validating addresses and end up with 20, 30, or more address correction charges per week. Those 20+ incorrect addresses per week result in an additional and unnecessary expense of more than $18,000 per year!

Following are tips to eliminate the risk and high cost of inaccurate shipping addresses.

Minimize Errors with Member Numbers

Do your customers place orders for your products online? Do they type in their delivery information every time they place a new order?

If so, this is an area of risk for inaccurate addresses. By assigning your customers a member number, username, and an associated address as part of your website’s “address book.” When the member signs in with a member login or number, their address is automatically pulled from your system’s address book.

This eliminates the risk of the customer potentially entering an incorrect address each time they place an order. The system can also update previous invalid addresses to reduce address correction costs moving forward.

In this way, you can fix and control customer addresses at the order level and significantly reduce address correction costs.

Address Validation Software

Even if a customer provides their shipping address, it may still be in an incorrect format according to the carrier address databases, which may result in address correction fees. Many companies offer address validation software.

Validate Address at the Point of Order Entry, Not Shipment Processing

We recommend that address validation software be implemented at the point of order entry and not during shipment processing. Performing address validation at shipment processing slows down shipping and often requires setting aside the shipment until the customer service staff verifies the address with the customer.

It is far more efficient to have the address validation software prompt the user for correct address data when the order is placed rather than detecting an incorrect address downstream during shipping and possibly resulting in spending hours or even days on getting the corrected address from your customer.

Most address validation software solutions offer address choices if the current address can’t be validated. Rarely does your shipping person know the correct address and instead takes a guess to move the package along, creating a new address correction or, worse, a delivery error.

CLS has also integrated several address validation solutions with InfoShip/Vx, our multi-carrier shipping software solution. We can also help you identify ways to implement address validation software upstream in the fulfillment process, at the e-commerce shopping cart level and more.

Audit Your Monthly Carrier Invoices

Keep a close eye on your carrier invoices, and you will be able to identify how costly address corrections can be and then take the needed steps to correct them. Please let us know if you have any questions as you consider addressing correction options.

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Rick Williams, President and CEO of Creative Logistics Solutions (CLS), is a shipping systems technology expert with advanced experience in shipping and supply chain operations. CLS helps companies improve warehouse productivity by combining streamlined workflows with InfoShip®/Vx, its multi-carrier shipping software platform, integrated pack/ship stations, data collection, and more.

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