Shipping COST???

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I know that Pay Pal gives you some choices on just how to set up your charges on shipping. I suspect that these options are chosen from common business practices.
You can have a set shipping charge per order, per item, according to the total amount of the order etc. I am pretty sure that most companies do not have a different shipping charge for every item they sell. I also do not think they will calculate shipping for every order (like I do) but will use some sort of scale in which your order falls into some bracket as far as what it will be charged. some of those combos will come up way out of wack.
 
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We are not talking about FREE SHIPPING but rather charging more then the cost of shipping.

This was the statement I was referring to (by George):

When companies sell things they include these costs in their pricing structure much as we do when we sell a pen. We don't just charge for the kit and blank, we figure in the costs mentioned above and if shipping is a huge expense, it shoud be factored in as well.

Therefore, if they should be factored in, I am just wondering how that would be done. Maybe I am misunderstanding the statement, and I apologize if I am. Feel free to correct my interpretation.

By the way, in the occasional sale of surplus pen blanks that I have on the IAP, I charge $5.00 for the $4.95 priority mail shipping and I don't charge paypal transaction fees. I don't think its necessary... but its also not a business. Just want to clarify that I am not arguing from a point of view that would justify something I am doing =)
 
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That is would should happen. It is entirely possible that some businesses (illegally) pad their actual income by listing the full s&h as an expense.

Businesses can't just say something is an expense. They have to produce receipts. If I'm selling pen kits, I can charge you whatever I can get you pay for shipping & handling, but that doesn't mean that I'm going to list the same amount as an expense on my company's taxes.
 
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Therefore, if they should be factored in, I am just wondering how that would be done. Maybe I am misunderstanding the statement, and I apologize if I am. Feel free to correct my interpretation.

All you do is look at your actual costs for shipping and shipping-related supplies and bounce that number against either the total number of orders that you shipped, or the total number of items that you sold, then decide how much you need to recoup by raising prices or assessing a "handling" fee. It's simple.
 
I can't tell whether you have any idea what you are talking about. Businesses can't just say something is an expense. They have to produce receipts. If I'm selling pen kits, I can charge you whatever I can get you pay for shipping & handling, but that doesn't mean that I'm going to list the same amount as an expense on my company's taxes.

I am aware of that... I was saying that business should only claim actual expenses.

Maybe you should re-read what I posted.
 
I read more of the comments about just what is claimed as what when it comes to money collected for shipping.

Now I have never been a big company with Employees, warehouseing, office space and personnel, operating equipment like fork lifts and such and whatever.

With all of that there are a lot of costs associated with being able to offer you my item at all. I have to pay my employees even if nothing is being ordered. I also agree that the price I list my items at should cover most of those costs. but shipping is shipping.

so here is the situation I am thinking about. I have a fairly large busy business and I actually pay a full time employee to do nothing put pull pack and ship small orders that are shipped by USPS or UPS. I have worked in a place that had jsut this sort fo set up.

I also have the cost of supplying and maintaining the equipment that this employee needs. Packing table, scales, labels, order print outs, various rate charges. there used to be quite an ordeal in keeping the papaer work correct for UPS, so they have to be trained. various types of printing equipment and supplies, stamps, invoice envelopes, tape dispensors and tape. keep in mind all of this equipment is being used by an employee so the wear and tear will be high. costs such as boxes as few companies that ship a wide range of products would consider restricting themselvs to the boxes supplied by USPS. I can see how a company is into a couple thousand dollars in costs before they even ship anything.

I do not know if a company has to keep there shipping charges seperate from there sales when it comes to record keeping. or if they ahve to verify that it actually cost them what they charged to ship orders. I think would be pretty hard to do when the cost to ship is not just the bills you paid to the shipper.

I do have a personal experience at jsut how much employees can cost in regard to losing or breaking equipment. I once went and picked up 25 100 foot extension cords for my brother in law who was a painting contractor. one week later I was helping him and we needed a cord. not one of those 25 cords was stil around. all had been either lost stolen left behind on jobs or ruined. 7 days and several hundred dollars in cords where used up. I asked him about it and he told me he budgeted $25,000 a year just for replacing tools his employees wrecked. Mostly spray gun tips.
 
I'm curious about something.........

When I did my federal taxes last year I entered my pen sales in one area, cost of supplies in another, tool depreciation in another and misc expenses like postage, envelopes. office supplies, etc. in another area.

I wonder where folks put the money they gain from shipping and handling fees, profit or expense or... is it a gray area that's possibly just forgotten? :eek:

If you are reporting your pen sales and costs on your 1040, your Schedule C (the appropriate place to record this) should list your GROSS RECEIPTS. Any deductions must be verified as having been paid. Thus, if I add $7.00 to every order for postage but only spend $4.95, I should report the $7 as income and the $4.95 as expense, with the net effect of adding $2.05 to my taxable income. If I spend money on tape and packing materials, they may also be deducted as business expenses. Of course, there may be some folks who cheat on their taxes. :rolleyes:
 
All you do is look at your actual costs for shipping and shipping-related supplies and bounce that number against either the total number of orders that you shipped, or the total number of items that you sold, then decide how much you need to recoup by raising prices or assessing a "handling" fee. It's simple.

Yes, that is simple, and it does end up costing consumers that buy low quantities a relatively higher price. Which may just be what is happening with the aforementioned companies.

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So is the problem here just when handling is lumped in with shipping? Or do people not like seeing handling charges at all, and they should be pushed into the price, where the consumer is just not aware of them?
 
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So is the problem here just when handling is lumped in with shipping? Or do people not like seeing handling charges at all, and they should be pushed into the price, where the consumer is just not aware of them?

I know people have asked me why I list "Shipping and Postage" to my group buys. Are they not the same thing?

The answer is no they are not.
Shipping is the cost I pay the supplier I order from to get the items to me that is then divided in any number of ways and added to the cost of each individual item.

Postage is what I pay to the post office to get the item from me to you.

Likewise shipping from a supplier I see as the cost a company pays the post office or other to actually take the item to me. handling is what they charge to get it together and ready to be given to the shipper. This by the way is the only real "Work" involved in a group buy. The rest is setting at my computer putting the right info in the right cell of a form and reading message about how much everyone appreciates me. once in a while things get a little twisted and confusing but for the most part the work of a buy is the handling.
 
Time is money. It takes time to package properly. It takes money to ship - diesel prices are killing truckers these days. And no matter what they charge for shipping, if you lived in the same area and had to drive say 50 miles round trip, the cost of fuel, wear and tear on your vehicle and your time would exceed what most vendors charge for shipping. I used to feel just like you do until I started packaging and shipping things. Now I look on it as a necessary evil in doing business.

Bob
 
Quote:
Originally Posted by MesquiteMan
As a seller, I personally do not believe in charging any more than actual shipping. My shipping policy states that my cart will charge for Small Flat Rate Shipping and that if I can ship for less, I will refund the difference. Takes just a few seconds extra when printing the shipping label through Paypal to look at what the shipping cost. After the label is printed, I click on refund and refund the difference. Done.

As for shipping supplies and other related shipping costs...that is part of the cost of doing business in my opinion. It is already figured into the cost of my blanks .



And I think many outfits have it factored into their prices as well, but they have just figured out a way to squeeze a little extra out of their customers. What's the phrase..... "whatever the traffic will bare?" :eek:

You mean we have to take our clothes off to buy stuff???? :biggrin:
 
Someone said, and forgive me as I can't remember who at this point, that the cost of shipping supplies and labor should be figured into the price of the product. So my question at this point is do the people that do come in and pick up their order pay the same for the merchandise or do I now need two separate prices for every item? If it is the first option, this means that everyone who purchases at their local Rockler would subsidise the shipping of those who live too far away to come to the store and need it shipped.
Wow now this looks to me as some sort of shipping welfare. This is a great idea, whoever came up with it should run for office or something.
 
I think the underlying issue most have isnt with the actual shipping and handleing charges, most will agree that they are needed and a cost we have to deal with.

I think more so it arises from the unsavory ones who add on outragious handling charges. Sometimes its obvious, look at any TV offer, 24.95 plus s/h and then the total is 89.99 for a couple towels!

That leaves a sour taste in the mouth of consumers and then they will assume that all companies mark up like that.

Having worked in a warehouse as a picker, I can tell you, that multiple orders are often picked at the same time, to reduce cost, but yet each order pays the same handling charge..

fact of business, needs to be included in your TCO for any item. Dont like it, buy retail and then pay a retail markup for the save shipping to the store, and then the overhead at the store...

IE. I can drive to HF and pickup, lets say the 1.5hp DC, 139.99, my local HF is in the highest tax bracket for reatil, 10.5%, so now that is 14.95 tax on the item, I take it home, OR i order online and pay 11.95 shipping, saves 4 bucks, but have to wait for it.

Now if I figure in time and gas to pickit up, cheaper to ship, but I dont like waiting so I will gladly pay what I call the I need it now, surcharge and go pick it up...
 
Someone said, and forgive me as I can't remember who at this point, that the cost of shipping supplies and labor should be figured into the price of the product. So my question at this point is do the people that do come in and pick up their order pay the same for the merchandise or do I now need two separate prices for every item? If it is the first option, this means that everyone who purchases at their local Rockler would subsidise the shipping of those who live too far away to come to the store and need it shipped.
Wow now this looks to me as some sort of shipping welfare. This is a great idea, whoever came up with it should run for office or something.

The people shopping in the stores would not be subsidising the people who have something shipped as I am sure it costs much more to operate a store than it does to pack items to be shipped. As for running for office I would not stand a chance as I prefer to speak my mind as tell people what they want to hear!
 
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This post has given me an ideal for a new business;
the company could be called EVERTHING FREE
and offer stuff as below;
We are now offering free pen kits ,free replacements, free refills, free lathes and any tool you might need, or anything you can think of food ,clothes,cars ,boats and we even pay your bills for you.We do it all ,just pay SHIPPING AND HANDLING.

Everthing has unlimited warranty just call and we will ship out a new one (no pickups everything must be shipped )as we do not have a retail outlet (help can't speak english and owner is always gone off buying land ,towns ,countries, big box stores (and closing them.)just pay SHIPPING AND HANDLING........
We will even loan you money (WITH COLLATERAL OF COURSE) at 0% interst. just pay SHIPPING AND HANDLING.
If you need something that is not listed we offer that too ,just pay SHIPPING AND HANDLING..


name change

ANY AND EVERYTHING FREE
 
Mac, didn't I exchange e-mails with you last week? You're in Asia, aren't you??? I remember it sounded like that.

yes I'am in asia I am thinking about buying China ,when my new business ideal gets off the ground (thanks to this post.)
Just over here to get a price!!!
While I'm here I might see how much I can get Japan for also.
 
I know Mac posted as a joke but the idea is not original. I have seen companies selling products offering free refills for life,just pay shipping & handling. Of course if you follow up you will find their shipping & handling is about the same as what you originally paid.
 
This has been an interesting post trail. Even got off track a little but....what ticks me off is the handling charge. When I was growing up and taking college classes in business, these overhead items were considered the "cost of doing business". Your products price reflected these amounts. As for driving to the post office, buying the box, buying the tape, all this is overhead and not a profit center. Charge me the shipping. Nothing else. I am one of those weird people who compare what they paid in shipping and what the shipper paid. UPS and FedEx can be a little difficult because of volume discounts, but if you know somebody inside, you can get that to. When they charge me more than they paid, I do not return to them for future business. Thats just my opinion and how I do things. I do not want to contact the company ahead of time to try to get a better rate, there will always be somebody out there who is hungry and willing to do the correct thing.
 
Pfft that's nothing try shipping in Canada. All the stupid options they add it's like picking out a cell phone package plan.
 
This has been an interesting post trail. Even got off track a little but....what ticks me off is the handling charge. When I was growing up and taking college classes in business, these overhead items were considered the "cost of doing business". Your products price reflected these amounts. As for driving to the post office, buying the box, buying the tape, all this is overhead and not a profit center. Charge me the shipping. Nothing else. I am one of those weird people who compare what they paid in shipping and what the shipper paid. UPS and FedEx can be a little difficult because of volume discounts, but if you know somebody inside, you can get that to. When they charge me more than they paid, I do not return to them for future business. Thats just my opinion and how I do things. I do not want to contact the company ahead of time to try to get a better rate, there will always be somebody out there who is hungry and willing to do the correct thing.

Then, it's ok to have a "one size fits all"?? We COULD put everything in a $10 (domestic) flat rate box. Save a LOT of time trying to "jimmy" it into a small flat rate. Our blanks are a full 6" long, the little box is 5.75". But if you buy less than five blanks, it will fit (the other direction). If you only buy one or two, we COULD use a padded envelope and pay regular parcel post rates. But, those envelopes are about fifty cents each, if you buy two blanks, should we have that priced into each blank??? Or consider it part of shipping/handling?
 
I'm still waiting for a buyer to give me a plan that will work. I don't need or want to profit on shipping, but I won't lose money on it.

Should I estimate my total costs for shipping and then divide it by the number of items I expect to ship in a year and then raise the price by this amount? Should I take that same total cost figure for shipping and divide it by estimated sales dollars for the year and then apply a percentage markup?

The only answer that is not acceptable is "Absorb it. Take it out of your own pocket."
 
When they charge me more than they paid, I do not return to them for future business. Thats just my opinion and how I do things.

I suppose this isn't a good time to tell you that most of the UPS and Fedex
regular shippers get about a 40% discount..
 
Since when is against the law to make a profit? Competition will dictate what you charge on any given item, beit, merchandise or shipping and handling or any other charge you deem necessary. However, seen it time and time again, if people feel that you have a good product and good service, then most often shipping and/or handling becomes a mute point. Just my .02 worth!!
 
Someone said, and forgive me as I can't remember who at this point, that the cost of shipping supplies and labor should be figured into the price of the product. So my question at this point is do the people that do come in and pick up their order pay the same for the merchandise or do I now need two separate prices for every item? If it is the first option, this means that everyone who purchases at their local Rockler would subsidise the shipping of those who live too far away to come to the store and need it shipped.
Wow now this looks to me as some sort of shipping welfare. This is a great idea, whoever came up with it should run for office or something.

A couple of places I used to deal with on animal feed and such did have 2 prices Cash & Carry, and Delivered, or they would offer a Cash & Carry Discount.
 
I think the underlying issue most have isnt with the actual shipping and handleing charges, most will agree that they are needed and a cost we have to deal with.

I think more so it arises from the unsavory ones who add on outragious handling charges. Sometimes its obvious, look at any TV offer, 24.95 plus s/h and then the total is 89.99 for a couple towels!

That leaves a sour taste in the mouth of consumers and then they will assume that all companies mark up like that.

Having worked in a warehouse as a picker, I can tell you, that multiple orders are often picked at the same time, to reduce cost, but yet each order pays the same handling charge..

fact of business, needs to be included in your TCO for any item. Dont like it, buy retail and then pay a retail markup for the save shipping to the store, and then the overhead at the store...

IE. I can drive to HF and pickup, lets say the 1.5hp DC, 139.99, my local HF is in the highest tax bracket for reatil, 10.5%, so now that is 14.95 tax on the item, I take it home, OR i order online and pay 11.95 shipping, saves 4 bucks, but have to wait for it.

Now if I figure in time and gas to pickit up, cheaper to ship, but I dont like waiting so I will gladly pay what I call the I need it now, surcharge and go pick it up...

No one will disagree with that! That is just plain shady.

My problem is with someone that calls out a reputable vendor, by name, that charges a reasonable flat rate shipping fee, and claims that they have poor customer service because of that.

By the way, free is never free. Like I said before, its just in a different package.

My battery is dying, so I won't wax eloquent even if I could.

Bottom line:
Businesses have a responsibility to be ethical and customers in a free market system have the choice not to buy! Its great =)
 
I've been online shopping for a camera today, if I decide today, guess which vendor I am going to select; source A for $249.99 or source B for $252.

So far it's source B, because they have free shipping, source A has the lower price but charges $19.98 shipping making their total $269.97. I didn't find this until I went through the checkout process and THAT's what aggravates me, finding out at the last minute that you have been "upcharged"!

Source B seems to be ok with rolling shipping in with the rest of his COST OF DOING BUSINESS, I wonder how he manages?

This has been an interesting debate and it just shows me one thing, some folks are out to get every penny they can while others aren't.

When I sell a pen or two I will throw in some extra refill cartridges just as a way of saying thanks for the business. At $1.90 apiece it doesn't break me, might just register in someones mind and perhaps be the cause for repeat business but from the discussion above I am sure there are those who would instead say.... "would you like to buy some extra cartridges for $3.50 each?"
 
I've been online shopping for a camera today, if I decide today, guess which vendor I am going to select; source A for $249.99 or source B for $252.

So far it's source B, because they have free shipping, source A has the lower price but charges $19.98 shipping making their total $269.97. I didn't find this until I went through the checkout process and THAT's what aggravates me, finding out at the last minute that you have been "upcharged"!

Source B seems to be ok with rolling shipping in with the rest of his COST OF DOING BUSINESS, I wonder how he manages?

This has been an interesting debate and it just shows me one thing, some folks are out to get every penny they can while others aren't.

When I sell a pen or two I will throw in some extra refill cartridges just as a way of saying thanks for the business. At $1.90 apiece it doesn't break me, might just register in someones mind and perhaps be the cause for repeat business but from the discussion above I am sure there are those who would instead say.... "would you like to buy some extra cartridges for $3.50 each?"

I give 2 free Schmidt refills with my pens. Rolled into the price.

I think it shows that some people do things differently, and different is not necessarily wrong. If Vendor A mislead you, then shame on them. If not, then they just do things differently, it doesn't make them better or worse. Of course buy the cheaper one if its apples to apples! Its nice to have that choice.
 
I suppose this isn't a good time to tell you that most of the UPS and Fedex
regular shippers get about a 40% discount..

We have been with UPS since 1983 as a regular customer, daily pick-ups and deliveries. We got our first discount two years ago when they did away with the local account reps. and our new rep. is in Texas. I can assure you that unless you are doing 20k a week with UPS you are not getting the kind of discount you are suggesting. A package under 5lbs going to a residential customer is more like 4%. Oh but wait they are still tacking on a fuel surcharge, so your 4% is more like -3%.

I am going to **** a few of you off here but it needs to be said.
If you do not know what you are talking about through first hand knowledge you are only showing your ignorance on the subject. Until you operate as a business and not as part-time hobby that generates less than 5k a year in sales, the majority are clueless.

There is no easy answer that will please everyone. If you are so tight with your money that an extra $1.50 above the actual shipping cost is going to **** you off and run to the big corparate giants who out source everything but the executives pay, then go right ahead. Then when those big companies make billions in quarterly profits like Exxon and all the Mom & Pop business go by the way side, don't complain when you have no other options and pay what they want or do without.

This one is for the Wheel of Fortune folks!

_ _ _ _ _ _ _ _

Used letter board:
A B D F G H I J K M N O P Q R T V W X Y Z
 
Just went back and read oginial post and remembered that when I first started down this vortex, I called (hut )and ask if I could get cheaper shipping (like just mailed in an envolope, their answer is that they used one shipper and that was as cheap as they would go.
I did not order the special clips that I needed from them, I just sold the guy ,buying the pen another one.
And have not ordered from them to this day, and probably won't ,until I can fill up that $7.99 box.

Its the --principal--( adj.--first or foremost in importance)of it ,that I go by.

You know the old saying --burt child dreads the fire ---
well I dread shipping and handling(dread--n. to be in terror of; fear greatly.To anticipate with anxiety or reluctance.
 
I've been online shopping for a camera today, if I decide today, guess which vendor I am going to select; source A for $249.99 or source B for $252.

So far it's source B, because they have free shipping, source A has the lower price but charges $19.98 shipping making their total $269.97. I didn't find this until I went through the checkout process and THAT's what aggravates me, finding out at the last minute that you have been "upcharged"!

Source B seems to be ok with rolling shipping in with the rest of his COST OF DOING BUSINESS, I wonder how he manages?

This has been an interesting debate and it just shows me one thing, some folks are out to get every penny they can while others aren't.

When I sell a pen or two I will throw in some extra refill cartridges just as a way of saying thanks for the business. At $1.90 apiece it doesn't break me, might just register in someones mind and perhaps be the cause for repeat business but from the discussion above I am sure there are those who would instead say.... "would you like to buy some extra cartridges for $3.50 each?"

It is really hard to compare to different companies like that. Company A might have a smaller stock then B, B might have them drop shipped from their supplier and sell more thus the free shipping.

Company A might actually have then on hand in inventory, thus have to charge shipping out as well.

There are many companies that do not charge a handling fee, most of these are smaller companies run with one or two people, very low overhead, and smaller volume.

Now a company with 5 f/t pickers, that work 8 hours a day, and have to fill hundreds of orders, has to charge a handling fee other wise the payroll for the pickers will not be meet.

best advice is to shop around and find the best deal you are comfortable with and go with it.
 
We have been with UPS since 1983 as a regular customer, daily pick-ups and deliveries. We got our first discount two years ago when they did away with the local account reps. and our new rep. is in Texas. I can assure you that unless you are doing 20k a week with UPS you are not getting the kind of discount you are suggesting. A package under 5lbs going to a residential customer is more like 4%. Oh but wait they are still tacking on a fuel surcharge, so your 4% is more like -3%.

I am going to **** a few of you off here but it needs to be said.
If you do not know what you are talking about through first hand knowledge you are only showing your ignorance on the subject. Until you operate as a business and not as part-time hobby that generates less than 5k a year in sales, the majority are clueless.

There is no easy answer that will please everyone. If you are so tight with your money that an extra $1.50 above the actual shipping cost is going to **** you off and run to the big corparate giants who out source everything but the executives pay, then go right ahead. Then when those big companies make billions in quarterly profits like Exxon and all the Mom & Pop business go by the way side, don't complain when you have no other options and pay what they want or do without.

This one is for the Wheel of Fortune folks!

_ _ _ _ _ _ _ _

Used letter board:
A B D F G H I J K M N O P Q R T V W X Y Z

Why only one shipping company????
Should;nt you ,as a business owner ,try to find the best shipper for your customers.
By the way ((you)) are your shippers customer.
And I guess the post office lied on their tv commercal ,that I saw....do they or don't they have a flate rate envelop, and do they or don't they pick up at no extra charge and is or not is envelops free. If they are not free then why do they keep giving them to me.
As far as handling charges ,that has come from the way they sell stuff on tv, thats not the honorable way to make money. But then again ,we are not an honorable country any more ,anyway.
If a customer buys from me ,they know ,what the price is, on the front end and there is no surprizes on the paying end, thats the way I was tought. And thats the way I will die.
Handling charges are like me setting up to sell and I stand a broom up against the cash register next to everyone that checks out and charge everybody for it .knowing if they come back I just say oh thats not yours..

PS haven't you noticed there is no mom and pops left.
at least not in the vocation I grew up selling in ;to such as diners, cafes ,small grocery stores ,small gas stations . some of the towns that used to have 3 stores and 2 cafes have none now .ghost towns.
 
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We have been with UPS since 1983 as a regular customer, daily pick-ups and deliveries. We got our first discount two years ago when they did away with the local account reps. and our new rep. is in Texas. I can assure you that unless you are doing 20k a week with UPS you are not getting the kind of discount you are suggesting. A package under 5lbs going to a residential customer is more like 4%. Oh but wait they are still tacking on a fuel surcharge, so your 4% is more like -3%.

I am going to **** a few of you off here but it needs to be said.
If you do not know what you are talking about through first hand knowledge you are only showing your ignorance on the subject.

Well, that one appeared to be aimed my way .. but I started UPS shipping
back in the mid 70's and we were at 40% then. Nowhere near the weekly
numbers you're talking about. And the last time I shipped on a regular
basis was about 3 years ago for a friend of mine with a UPS Store. They
were also about 45% off, but had franchise fees and buying from their
approved vendors etc. But they weren't doing the numbers you mention
either.. except the two weeks before Christmas.

I'm not saying your numbers are the same. But my information *is* from
firsthand knowledge. I considered buying the UPS Store at the time
and I handled all of the shipping back in 76-77 myself. I can't speak
for what happened in the middle, either.. but I didn't pull those numbers
out of my butt. Perhaps I shouldn't assume that other shippers numbers
are similar.
 
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