Parcel Audit Profile

A parcel audit profile is essential for any parcel shipper of substance. The profile should be a dynamic model that is updated continuously. The profile consists of a number of data points that identify and make up your package characteristics. While each profile is different, based on the individual business, key components of the profile include analysis and summaries of zone density, seasonality, service level, and surcharges, international, hundredweight and dimensional charges.

The Data Analysis phase consists of populating the costing model with the data from the parcel audit profile and the pricing from your existing agreement(s). Other components include best practice observations and a savings opportunity (anchoring) analysis. The best practice analysis typically consists of looking at air versus ground comparisons, address correction review and potential unauthorized shipments, to name a few.

The savings opportunity analysis is critical, not only for identifying possible gaps in your processes — such as not taking advantage of the ground footprint — but to also identify targets for your negotiation strategy. How does DIM weighting play into your cost structure? What is your revenue attainment in relation to your revenue tiers? What percent of your overall spend is made up of accessorial charges? All of these things, and countless more, should be identified in this analysis and folded into the negotiation strategy.

Once you have identified your targets, developed/updated your parcel audit profile and costing model, and completed your data analysis, the next step is the development and management of the RFP itself. As mentioned before, corporate policy may dictate certain required elements, such as legal statements and supplier diversity requirements, so it’s best to identify those first.

Experience indicates that more is better in a Parcel Audit RFP. You want to create a comprehensive document that acts not only as a road map for the process itself but gives the participants a complete picture of your parcel business in order to develop a qualified response. Figure 1 on this page provides some suggested headings from a typical Parcel Audit RFP.