How to Assess If Multiple Distribution Centers Can Reduce Shipping Costs and Time to Customer

Without a doubt, Amazon is king of multi-distribution center processing and shipping.  In May 2019 industry sources estimated that Amazon shipped to 72% of the US population in one day from its 75 centers with 125,000 employees.  In 2019, Amazon shipped 3.5 billion packages, compared to FedEx at 3.4 billion.  Morgan Stanley expects Amazon to surpass UPS in 2022.

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Do You Understand Where You’re Losing Money on Shipping & Handling?

This title of this blog might sound naïve considering S&H’s high cost to direct-to-customer businesses and the time companies spend on discussing it. Let me give you two examples to show you maybe there is additional homework companies need to do before changing policies.

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Get Ready For Holiday Season - Conduct an Operational Audit Now!

Summer time is here, the kids are out of school, time to hit the pool, right? I know that you don't want to operational audithear this, but it is prime time to conduct an operational audit to identify those areas needing improvements. Believe it or not there are only 5 months left before the Holiday season is here again! Make certain that you have ample time to implement your fixes, develop strategies and plans for the distribution center. What are the objectives you and your management team have set for improving operations this year?

Here are a few areas to look at for your operational audit in order to determine what changes will be most beneficial to your distribution center and operations: 

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How Do I Reduce My Cost of Shipping?

Problems:

Outbound cost of shipping now averages 6% to 8% of the average order (often much higher for someReduce Cost of Shippingbusinesses), exceeding fulfillment labor costs. Carriers can also add over 90 accessorial charges, and there is no end in sight. Consumers take shipping & processing (S&P) rates into account in their purchasing decisions, with these charges among the top reasons for cart abandonment.

Solutions:

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How Does Your Cost of Shipping Compare?

There is always a lot to keep in mind when dealing with your company's freight contracts and shipping ratesCost of Shipping - both LTL/TL and small parcel. We feel like there is a need to keep a few points in mind when looking at your LTL/TL inbound freight rates and to continuously strive to make improvements. Below, we have introduced a few of those points. We have  briefly outlined the current freight market, listed a few cost saving opportunities and mentioned how you can get a confidential, no-charge freight rate audit to benchmark your current cost of shipping

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Warehouse Improvements to Implement Before Holiday Season

Believe it or not, there is still a window of opportunity to make sure you are ready for this Holiday Season. Just think back to last year's peak season for a moment. Can you and your business afford to have Round 2 (and for some of you it may be Round 10 or 12) of the issues that you faced in past peak seasons? You may have completed a brief post Holiday Season review of what worked and what needs to change in your operations. Dust off that document and review with management the outlined issues that occurred last year and the ones that still need to be addressed. This should be done before any other areas are assessed and tackled.

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Supply Chain Strategies to Control and Reduce Expenses

We all know we’re coming out of a tough business climate. With many companies ramping up for fall and holiday seasons, there is an urgent need to increase productivity and reduce costs without having to make major capital purchases to do so. Here are some supply chain strategies to reduce your cost per order, increase capacity without expansion, and improve service levels in your supply chain logistics. The source of this information is experience gained in our supply chain consulting work with multichannel companies, as well as from the Supply Chain Summit.

Perform an Operational Audit

A warehouse assessment is a great starting point. Warehouse assessments will identify your needs, and help recognize potential improvements to process, layout and use of space, staff productivity, warehouse management system (and peripheral systems) and freight analysis. The objectives are to lower the cost per order, increase storage capacity within the existing center, reduce inbound and outbound freight costs, and improve service levels and turnaround times.

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What is Your Percent Discount For Your LTL Freight Savings?

An inbound and outbound LTL freight audit has just been completed for a client’s domestic shipments.  The client has just been told that we are excited to announce that they could save 30% with standard service and 20% with guaranteed PM delivery.  Additionally, the standard service levels with using the freight consortium was as good or better than the existing LTL freight  carrier by 1-2 days for more than 50% of all shipments. 

Then the client asks an interesting question...

Question:  “How relevant are these percentages?  My current discount is 68% from our carrier?”

Answer:  "Our recommended LTL freight consortium uses a 1998 rate base with hundreds of customers in the consortium. We don’t think discount percentages provide a meaningful comparison. You really need to dig behind the numbers to see what is truly included within that discount percentage. To come up with these LTL freight savings, we took roughly 75 freight bills and compared the actual costs to the recommended carrier’s charges."

Admittedly, we can’t always save you money.  But our inbound and outbound LTL freight audit is a great way to validate that you have negotiated a great deal for your company; or to be able to save you more money further (most clients have enjoyed anywhere from 10% to 25% off current rates). 

Let's get started talking about our free inbound and outbound LTL freight audit by contacting Jeff Barry at  804-264-8040 or emailing him at jbarry@fcbco.com. Let's see what your percent discount will be for your LTL freight savings!
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SORRY FOR THE DELAY - THANK YOU FOR WAITING

I just had a pleasant experience with a back order from L.L. Bean.  How can you have a good experience with something that's been on backorder for 6 weeks?  Well let me tell how.

First the background.  On April 1st, I ordered 5 pairs of chino pants and 1 was on backorder.  The CSR told me immediately that the color would not ship until May 15, six (6) weeks later!  I liked the color and the price so I let it remain on backorder.

Well guess what?  The 4 other pairs came in 2 days shipped for free on my L.L. Bean card and express delivery which is standard.  And the back order arrived before May 15th much to my surprise-I'd forgotten it.  Who hasn't had nothing but disappoint with projecting back order dates arrivals?

But even as important, I found something of real interest printed on the backorder's order/packing slip.  On the line above the item was this message:

"SORRY FOR THE DELAY - THANK YOU FOR WAITING"

It struck me, how many times do we thank customer's for their patience when we disappoint them?  And better yet, how many times do we follow through with the promises we make on backorders?  But then, that's why I always use L.L. Bean as one of the standard bear's for high customer service.
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