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Determining Shipping Needs

Determining Shipping Needs

By Diane M. Calabrese / Published December 2020

Photo by iStockphoto.com/Drazen Zigic

Ship? It’s the one type of carrier that’s often not in the picture when goods move throughout the United States.

     Approximately 40 percent of goods are transported by truck, 28 percent by rail, and 17.5 percent by pipeline, while multiple modes account for just under eight percent of movement, according to the U.S. Department of Transportation. Less than seven percent of goods move across water. (Only one-tenth of one percent move by air.)

     Yet we use the word shipping to encapsulate the transport of goods. (Webster’s Dictionary labels the usage an Americanism.)

     Monikers aside, there is a common goal when shipping anything: Move an item to its destination in a reasonable amount of time and without inflicting any damage to it. Judgments about reasonable time vary with what’s moving and customer expectations, but ensuring the integrity of goods is a universal quest.

     There are many companies that can assist manufacturers, suppliers, and distributors with everything from evaluation of shipping needs to the actual mechanics of shipping. “After working with many of the major and local carriers direct, we started researching and testing out freight-logistics companies to find a shipping partner that could add value to the shipping process,” says Chris Meyer, controller at Ben’s Cleaner Sales, Inc., in Seattle, WA.

     “We found the local office of Transgroup Global Logistics to be a great partner,” says Meyer. “In addition to good freight rates, they have been valuable and effective in processing freight-damage claims, finding lost freight, and processing international shipments.”

     The company Meyer cites is one among many that assist with domestic and international shipping and everything in between. For example, responsibility for dealing with less-than-truckload (LTL) shipments once fell firmly on the sender. Today, logistics companies will handle LTL. A logistics company can harvest data, analyze patterns, and make recommendations for optimizing shipping.

     Whether or not a manufacturer, supplier, or distributor ultimately decides to partner with a logistics specialist, they must still evaluate their shipping needs periodically as they would any part of their business plan. Location of largest buyers, sizes of containers, and frequency of purchases from regular customers are just some of the factors that fluctuate over time.

     Uniformity in package size simplifies shipping. Moving hazardous materials complicates it. So do taxes.

     Senders must now collect applicable state sales taxes on shipments to other states. Some states require the tax to be collected on the item only. Others require the tax to be collected on the total of the cost of item plus cost to ship.

     Shipping is a significant cost center. Shrinking the center by shunning new inventory that would be more difficult to ship because of its unusual size or shape might seem a reasonable option. It’s not.

     Customers get frustrated when they cannot get products and ancillaries they want from a vendor on whom they have relied. Better to take the time to assess shipping needs and streamline the transport of goods.

No Constants

     Shipping companies have many of the same concerns as firms whose products they move. Because they, too, want to achieve maximum uniformity in packages and get packages to their destinations without damage, transporters offer much good advice—so much so that hiring a consultant to get assistance may not be necessary.

     “We have not utilized a consultant per se,” says Dave Hildebrand, man-ager at Barens Inc. in Seneca, PA. “We have had numerous discussions with representatives of shipping companies and third-party suppliers to determine the needs of our company, both small package and LTL.”

     There’s nothing static about shipping, of course. Product demand fluctuates. So do geographic areas where buyers are concentrated. Ways of ordering and expectations keep changing, too.

     It’s imperative to routinely evaluate shipping needs. “We continuously evaluate our needs and
the quickest and least-expensive ways to reach our customers,” says Hildebrand. “This is achieved by internet search and pricing, as well as speaking to various representatives. The marketplace is continually changing, and we need to always be on top of our customer needs.”

     The suggestions and assistance that major shipping companies provide at no charge can be very useful. Take advantage of it. “We have had several shipping providers review our previous and current shipping situations,” says Hildebrand. “Both UPS and FedEx provide this service free through our reps. Trucking companies and third-party providers are always willing to review your practices.”

     High-visibility shipping companies endeavor to maintain sterling reputations and records. So do
smaller shipping companies. Yet issues can still arise, and a shipper must re-appraise relationships with shipping companies if there is a problem.

     “The only way to evaluate a shipping provider is by usage,” says Hildebrand. “If a carrier is careless with your shipments, it will usually be a constant situation. If a carrier damages one of our shipments, we reevaluate usage of said carrier.”

     Senders fully understand the difference between lackadaisical methods and a truly unfortunate event. (Terrible things, such as tractor-trailers being involved in interstate accidents with loss of loads, and sadly sometimes lives, do happen.)

     At the same time, issues may arise not in the process of transport, but in the handling of packages when they are unloaded or delivered. (Many of us have had a package delivered upside down when clearly marked “this side up” or with a mashed side when bearing a “fragile” label.)

     “We have stopped using carriers in the past for negligence and are currently reviewing one of our suppliers,” says Hildebrand. “The largest problem is dock workers creating damage with forklifts.”

     A hypothetical put to Hildebrand drew a pragmatic response. We wondered whether mock packages were ever shipped to assess the reliability of a carrier. “We have never shipped a mock package,” says Hildebrand. “I feel it is a waste of our staff’s time, as well as that of the carrier. We will soon know if a carrier is reliable.”

Not Always Predictable

     On the other hand, a carrier may suggest a run-through as a demonstration or a verification of how packages are handled. That can be useful in determining where something might go awry.

     Brian Carter, president of Armstrong-Clark Company in Sonora, CA, explains that his firm had concerns about package damage. Carriers were eager to address the effort they put into ensuring integrity of packages.

     “We even had one carrier walk a package through their entire distribution system,” says Carter. “All managers had to sign off that there was no damage before shipping it out their door.”

     Consultants have not been tapped for advice by his company, says Carter. “Our company is rural, and
we have limited options for carriers.”

     Trying to find the right carrier and achieve optimization in a more remote region did put Carter’s company on the path to a broker. He was not satisfied with the result.

     “We have tried brokers, and they were a complete disaster,” he says. “Brokers are trying to find the best price, which does not translate to the best care. Cheap may work if you are shipping rags or paint brushes, but it doesn’t work for shipping stain.”

     In fact, Carter had some experience with brokers that was not just bad because of lack of care by the shipper but also because the shipper aimed to deceive. “In addition to all the damage we experienced with brokers, we had occasions where there would be damage and the shipping company would rebuild the pallet and hide the damage on the inside,” he explains.

     Reassessment of shipping is ongoing at Carter’s company. “We are constantly evaluating our needs versus the service we are receiving from the two carriers we have decided to use,” he says.

     The perturbations of 2020 have affected transport and the decisions shippers must make. “Freight companies are becoming more and more unreliable,” says Carter. And the reasons are manifold.

     “Part of it has to do with COVID-19 shutting down facilities,” says Carter. “But as I understand it, they are having a hard time getting good people to work for them.”

     Indeed, it’s a difficult time for truck drivers. Insomniacs and others who listen to Red Eye radio (https://www.redeyeradioshow.com) know (from listening to firsthand accounts of drivers crisscrossing the country overnight) spring and early summer presented drivers exceedingly trying times. Rest areas, shower facilities, and fuel stations were closed; food was not available. Light traffic everywhere did not compensate for the other trials drivers met.

     The increase in the volume of packages being shipped has also taxed transport companies. At the end of the first quarter of this year, UPS had already reported a 21 percent jump in volume, for example. And the volume will just keep increasing if packages move instead of people.

     Competing for space and speed of movement on transport vehicles will likely cost manufacturers, suppliers, and distributors more in the near future, at least. Thus, the evaluation and reevaluation of needs—from how packages can be made more uniform to how handling of packages can be minimized, such as with information-packed and easily manipulated QR [quick response] codes—is more important than it has ever been. 

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