This spring has brought about a new look in the way that you will see your freight charges on items ordered through purchasing. Prior to these changes, the cost of freight (shipping and/or handling) would have been included in the Purchase Order amount and invoiced to the institution by the vendor. Delivery Services did a public solicitation for freight, parcel, and express delivery services in order to get much better pricing for the volume of activity we have. The result of that solicitation is that FedEx is the University’s preferred express carrier and that departments should realize approximately a 25% discount over published and previously paid freight charges. In order to pass along this discount, Delivery Services has worked with FedEx so that freight is billed to the University at the discounted rate separate from the vendor charges for the Purchase Order. This changed process breaks the freight charge out of the Purchase Order amount and creates a separate bill to the department for this (currently this is sent to the department as a shipping authorization and future efforts will attempt to simplify this process and include freight charges in the monthly mail billing process). This same savings in freight can also be realized by departments for PCard purchases. The procedures to take utilize this process for PCard purchases are available HERE.
Again, this new partnership with FedEx creates a reduction to the department in the freight amount from what would have been paid in the past (approximately 25%), but departments will now see a separate bill outside the PO total. This change has led to some confusion and some think that they are being charged double (both in the PO and with the separate billing). Please contact Delivery Services if you think this has happened and we will work with FedEx to get the issue resolved. The net result of this is in fact the - departments are paying less for freight charges, but they are getting a separate bill for them. Some further details about this are presented below:
- Central Receiving operations are common with large campuses (especially public institutions) for reasons of accountability over inventory and safety issues. One of the accountability issues that is addressed by this is to verify delivery of items ordered and prevent deliveries of items purchased with state/institutional funds to non-institutional addresses (e.g., personal or other non UNLV business addresses). UNLV has not been designed with an internal road system that would allow access by large delivery vehicles and thus to allow these large vehicles to have easy access to the majority of buildings on campus. We have had some safety concerns about the large number of vehicles on our internal sidewalks, and we wish to reduce this level of traffic.
- Prior to bidding out delivery services contract, UNLV has been paying full prices for freight and handling for several years. Some efforts were made a few years ago to determine if the university's business volume would support a volume discount by creating a public solicitation (RFP) to identify a preferred express carrier relationship. FedEx was selected through that process and has been identified to be the institution's preferred express carrier for both in-bound (coming to UNLV from external sources) and out-bound (shipped from UNLV departments to external sources) deliveries. Real examples of freight charges are listed below to demonstrate the savings that the departments are receiving based on this relationship.
- Several examples of pricing is presented below with the net result that all departments are saving money on freight charges:
Example 1: Out-bound FedEx 2nd Day. Published rate of $74.40. The department was charged $52.55 resulting in a savings to the department of $21.85.
Example 2: Out-bound Express Priority. Published rate of $42.75. The department was charged $12.83 resulting in a savings to the department of $29.92.
Example 3: In-bound freight on large item. Published rate of $129.02. The department was charged $68.55 resulting in a savings to the department of $60.47.
Example 4: In-bound FedEx Super Saver package. Published rate of $17.92. The department was charged $10.58 resulting in a savings to the department of $7.34.
Therefore the net result is that departments are saving money on freight charges, but the change in billing (a separate freight billing vs. having it merged into the overall PO cost) has led to confusion that this is a new/incremental charge.