World Trade - August 2008 - (Page 29)

drives a quantifiable, sustainable, comquantifiable petitive advantage o the next nearest over competitor. Shippin Shipping—even LTL—has become a strategic a advantage with enterconsidera prise-wide considerations. The ﬁrst point to address for on-theﬂy transactions is, “w can do the job?” “who d Much of the answer depends upon where geographical you are geographically and who can propick vide on-demand pickup, notes Pete Stiles, Ma Vice President of Marketing and Strategy at Lean Logistics. sho Savvy shippers should investigate a mix car of small regional carriers as well as large national shippers to d develop a mix of capabilities that ﬁts their o situation. Ensure own scop that the size and scope of a carrier’s operations ﬁt your needs. The ability to make ser one call and meet service needs throughout the region or the nation can simplify operations, providing they also meet the other requirements of reliability, fast transit times and good service. But shippers may also ﬁnd they need several small regional shippers and a national carrier for long-haul shipments, and it may be more economical, too, especially when geographic depth of coverage is needed. How do you decide? “The carrier should be able to provide the shipper with a distinctive, city-speciﬁc coverage map that shows the carrier’s coverage area for one-, two- and three-day service from that location,” Conaway advises. Conway Overall costs Competitive rates are the ﬁrst thing most shippers mention when describing the perfect LTL. But, there are many different tariffs, including the carriers’ own ‘tsar,’ SMC3 and y others. To effectively compare rates, shippers must work from a standard tariff schedule. “At Pep Boys, we used the s Yellow Freight tariff be because everybody had visibility to it,” notes David Schneide former transportation manager for Schneider, Pep Boys, now president of David K. Schneider Consultpresid ing, LLC. Fuel surcharges are an issue, he notes, but negotisurchar ating a low fuel surcha is less important than negotiating surcharge an overall good rate. If shippers have the time, they should put transactional shipments out to bid. Close-out retailer BigLots, headquartered in Columbus, Ohio, cut its LTL rates nearly 25 percent from previous rates when Unyson Logistics conducted a procurement bid event. The ﬁrst step in comparing bids is to get all the RFPs off the same tariff schedule so shippers can make accurate comparisons. “Anybody can get a 50 percent discount,” one shipper notes, and carriers often offer 60, 70 or even 80 percent off 2008 tariffs. Using an older tariff, 1996, for example, yields a lower discount, but compensates with other factors that may result in lower overall rates. Consequently, the tariff’s year is unimportant, because the primary difference between years is the level of discount. Putting the information on a spreadsheet allows for easy comparisons (and serves as a guide for the occasions when there isn’t time to bid a shipment). Include discounts and fuel surcharges to 30 of your most common destinations, recommends Ted Barton, who managed LTL freight for 35 years for Fortune 500 companies and now owns the Freight Management Group SE. Also include data for any other services that are important to you. “That will give you a very good feel for what carriers, going to which lanes, will work best for you,” he explains. It’s also worthwhile comparing truckload and LTL rates. Shippers sometimes ﬁnd surprising variances that can result in savings of time and/or money. For example, although a LTL shipment with multiple stops is considered more cost effective, a noted southeastern shipper revamped its operations to the point that its rates for truckload shipments are lower than most companies’ multiple-stop LTL, David Schneider reports. Another step, Barton says, is to analyze your freight. “Do you ship a large percentage of low density items or a multitude of many different classes? Will your carriers consider a ‘freight all kinds’ rate for all or part of the shipments? Do you ship a large percentage of ’minimum ﬂoor’ shipments? What are the ﬂoors of your carriers?” Knowing these subtleties can help you maximize savings and service. Consolidating shipments is another strategy. In some cases, customers can be encouraged to order larger shipments less frequently and thus reduce overall shipping costs. This is a particularly strong strategy to advocate to international customers while the dollar is low, but it makes sense even without the “exchange rate price break.” Good forecasting capabilities make it easier to effectively consolidate freight, one North American concrete form manufacturer emphasizes. By knowing when spikes in orders and, therefore, shipments are likely, shippers can improve their planning for routine shipments as well as those resulting from increases. And, by giving carriers more notice to plan for impending shipments, they may get better rates or better service. Conaway advises shippers to enter into a longer-term contract when they have enough volume to beneﬁt from customized pricing or for products with unique characteristics. WWW.WORLDTRADEMAG.COM 29 http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - August 2008

World Trade - August 2008 Contents Weathering the Storm Helping the World’s Poorest Nations Benefit from Global Trade Supply Chain Watch Tradewinds World Trade’s Top U.S. Trading Partners LTL Shipping ‘On the Fly’ Air Cargo Flies a New Heading Getting More from China Sourcing Why 3PLs Need a Seat at the C-TPAT Table Performance-based Supply Chains Drive Total Lifecycle Value SmartWay Navigates Sustainable Transportation Around the World in 80 Days—Hours—Minutes

World Trade - August 2008

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