Midrange Stuff, OS/400 Edition

UPS, FedEx, and Airborne Express won't be giving any awards to Pfastship for the new software it introduced last week. PfastCarrierRefund, which is now shipping, uses those carriers' electronic tracking and billing services against them to identify when they've failed to deliver a package as promised. Armed with that information, PfastCarrierRefund users can go to the shipper to demand a refund or to negotiate better long-term shipping contracts, Pfastship says.

According to Pfastship, small parcel carriers like UPS and FedEx fail to deliver between 2 and 6 percent of packages on time. However, most companies are not able to collect on those carriers' guarantees--which call for a refund of shipping costs if the shipment is not delivered on time, barring exemptions such as those due to weather, flight problems, or other foreseeable problems--because tracking late deliveries manually takes too much time, says Charlie Hawkins, vice president of sales for Pfastship. "It's not audited [because] it's extremely difficult to do with that kind of volume," he says.

Pfastship has calculated how much money companies are losing on shipping costs they shouldn't have to pay because of failed deliveries (due to late delivery, lost packages, damaged packages, and other common delivery problems). Assuming a 2 percent delivery failure rate (which is conservative, according to Pfastship's data) and a $10 average cost to send each package, companies shipping 500 packages per day are paying $25,000 per year, while companies shipping 3,000 packages per day are paying $150,000 extra. If recovered, these dollars go right to the company's bottom line. (These numbers assume 250 working days per year.)

PfastCarrierRefund is a browser-based application that runs on a Windows server and uses the SQL Server database. Pfastship designed the software to communicate directly with its OS/400-based shipping management software, called Pfastship2000, although there's no reason why the software wouldn't work with other shipping packages, says Pfastship presales consultant Mihir Munsif.

The software works by comparing the ship manifest (downloaded from the OS/400-based Pfastship2000 or other shipping application) to the actual shipping results from the carrier. One of the requirements of PfastCarrierRefund is that companies must be getting their bills from their small parcel carriers electronically. Pfastship developed PfastCarrierRefund to be able to parse the line-item billing information from electronic bills sent by UPS, FedEx, and Airborne Express. The software does not work with other types of delivery, such as less than truck load (LTL) shippers, because they don't use electronic billing.

Users interact with PfastCarrierRefund in a browser-based GUI. The software features several pull-down menus that guide users through building a report from their carriers' bills. There is no programming involved.

PfastCarrierRefund lets users run a variety of reports from their carriers' data. For example, users can build high-level reports that show the total number of late, lost, damaged, or manifest scan only (MSO) deliveries (which refers to when a label gets stuck in the printer and a new one is printed, but the shipper fails to void the old one and bills the customer for it). Reports are viewed in HTML or exported as a CSV document, for manipulation in a spreadsheet program.

"It has a pretty sophisticated report interface," says Mark Kenny, Pfastship sales coordinator. "We're looking at several things. Here's when the guaranteed time was; here's when it was actually delivered. Or maybe it was never delivered. Show me the discrepancies."

Users can sort the results of their reports by carrier, by service, by tracking number, by destination, by who signed for the package, or by any number of other variables. For example, one could find UPS's most successful method of delivery, such as second day air, overnight, or ground. Armed with this information, shippers can avoid a carrier's strong suit and play to that carrier's weakness to improve their bargaining position and get refunds. Users can also compare the performance of different carriers to find the least-expensive method.

In addition to tracking failed deliveries, PfastCarrierRefund identifies additional costs that carriers may be adding to the bill, which their customers may not be aware of. For example, UPS and FedEx may charge the shipper if they were given a bad address, which would tell the company they need to clean up their address database. Shippers may also be unaware that carriers are delivering to home addresses, for which UPS, FedEx, and others will bill extra.

While PfastCarrierRefund can help a company make its case against a carrier when it comes to refunds, it doesn't complete the deal. Every carrier is different when it comes to actually getting them to put a refund check in the mail. Most require some sort of proof sent to them via e-mail or fax, while you are probably better off calling your representative on the phone with others.

But pointing out your carrier's faults isn't PfastCarrierRefund's only role in life. The software also features a sophisticated e-mail notification system that alerts users when certain events take place. For example, the software can be configured to automatically send an e-mail alert whenever a package is scanned at a transfer station. (Of course, this feature can also be used to alert users when the carrier is late with a package.) In addition to using the carrier's tracking number, this software lets the user track packages by invoice number, order number, and other numbers given by ERP systems. These e-mail alerts also let customers track their packages, and there is even a link to Yahoo's map software to show exactly where a package is.

While this e-mail alert functionality is available in Pfastship2000, Pfastship officials say they are moving this e-mail alert functionality to PfastCarrierRefund. "We see this as a way to add a lot of value to users of our AS/400 shipping software," Hawkins says.

PfastCarrierRefund is available now. Pricing is based on the number of packages the user sends out every day. For up to 1,000 boxes per day, the license fee is $5,000. For 1,001 to 5,000 boxes per day, the fee is $9,000. Companies shipping more than 5,001 packages per day pay $12,000 for the license fee. For more information, go to www.pfastship.com.