If you are shipping product across the US/Canada border, are you getting the best distribution service for your money? Have you considered consolidating shipments to a country under 1 Master B.O.L. (Bill of Lading) to reduce your Clearance costs? Have you considered setting up a ‘Break Bulk’ (3rd party warehouse) in a border town to consolidate items for 1 border clearance? Are you benefiting from attractive domestic rates to reduce expensive transborder pricing? Are you working with your customers to maximize pallet size and create a ‘minimum order’? Do you have multiple customers located near one another that you can combine their orders to increase shipment size, and thus reduce costs per pallet? Is your Customs Broker allowing your orders to go into ‘Bond’? Is your carrier pro-active when dealing with Bond issues?
Shipping longhaul Truckloads is very expensive, coast to coast can be in excess of $7,000. Have you looked at shipping by Intermodal? (Rail- Piggy Back) Sure, the transit time may increase from 4-5 days to 9-10 days, but the savings can be greater than 50%. Is your customer is willing to wait the extra time knowing he is getting his product at a reduced price, and if he agrees, he may order more from you than your competitor.
When shipping longhaul LTL, are you establishing a route that will facilitate multiple drops to customers that are located ‘on line’ with each other? For example, if you are located in New Jersey, and have 10ft of trailer space for a client in Ohio, 10ft for Indiana, 10ft for Illinois, and 10ft for Wisconsin, why not ship to all 4 customers and create 1 truckload?
The savings will be substantial, when compared to 4 separate LTL’s, the service will be direct, and this will also eliminate any chance of damage as your product will not leave the original truck that it was loaded on. This may also increase your sales as your method of transportation will reduce your landed costs. The same goes for International shipments, create a Master BOL, and deliver the product on 1 truck, with 1 Border clearance fee, and no handling.
Fuel prices are on the rise, again, and we are going through a recession like never before. Exploring new shipping methods and meeting the ever changing demands of your clients is becoming more and more challenging. It is the responsibility of the Traffic Manager to come up with new ideas on how to get their product to their clients more quickly, more efficiently, and in doing this, they must not only maintain, but also grow, their client base.
Too often I hear people at companies that receive goods on a ‘Prepaid’ basis say, “we don’t pay for the freight, so don’t bother asking me about our shipping patterns”. In reality, yes, they do pay for the freight, and probably 10-15% more than if they were to handle it themselves. Obviously, the transportation cost is ‘built into’ the cost of the merchandise. So, those of you on the receiving end, have a responsibility as well.
If you control the Distribution of product for your company, look into some of these ideas, create some real life scenarios to determine the savings. Talk to your suppliers, talk to your customers, create a more effective method of transport. What are your customers saying about your current methods? Do you lose sales because of Transportation issues? (late, damaged, poor communication…etc) or better question is, Would you increase sales with a better Distribution program?