Is Off-Shoring A Case of Good Idea…Bad Execution?

With the current state of the dollar on the international monetary stage, many companies are re-evaluating the efficiency of sourcing abroad.  It appears more often than not, the estimated cost savings have been lost somewhere in the process.  A recent survey by Supply Chain Digest suggests the lost savings fall into five categories common to most companies:

1.       Sourcing Decisions:  Vendors are often selected on a lowest cost basis, but the analysis is incomplete, lacking full supply chain costs.

2.       Increased Inventory:  Additional inventory requirements to compensate for longer supply chains are usually overly optimistic.

3.       Increased Overhead:  Staffing requirements for both domestic and offshore management are underestimated.

4.       Transportation Costs:  Landed cost is difficult to track, and expedited services add a premium.

5.       Lack of Responsiveness:  Companies miss revenue opportunities due to longer supply chains and order delivery cycles.

The study suggests that companies overestimate potential savings 20 to 30% of the time. The savings may be real, but are usually lost when domestic purchasing agents become international sourcing managers.  Also, poor execution often leads to underutilizing container space or paying for smaller quantities that are not cost effective.

For help in your international and domestic shipping activity visit us at www.totalogistix.com or call us at 800.989.0054. x120.  There is something you can do about rising transportation costs.

11%

As professional logisticians we are fascinated, some might say obsessed, with numbers, data and trends. Here is one to consider. 11%. This number is from the Morgan Stanley/Parcel Magazine Annual Survey. It states “Although companies who use consultants to negotiate rates have deeper discounts still only 11% of companies use them (the same percent as in 2006.)”

Historically, we save our clients 14% on their small package shipping. We know our way around zone skipping, dim weights, revenue bands and the like. We drill down to PLD. (If you don’t know that is package level detail it is your first indication you should get in touch!)

Do you aspire to be a part of the “elite eleven” or the “everything’s fine eighty nine”???
If you opt for the former please contact us at www.totalogistix.com

What's The Best $1.00 You've Ever Spent?

You won’t find it on the McDonald’s dollar menu. If your company is paying its own freight bills, you’re paying somewhere between $10.50 to $14.00 per invoice. At TOTALogistix, we charge $1.00/invoice. With an industry average of $12.71, that’s both time and money that you can apply to your core business.

Freight invoices are complex and need to be validated per shipment. Multiple shipments, delays, re-routing penalties and accessorial charges can account for an average cost of 5% per invoice. Some companies report 85% of their shipments are changed.

Outsourcing this function not only saves money, it provides business intelligence not available through your AP department. This data is used to compile carrier performance, transportation profiles, and customer activity. And this data is best used by a company whose core mission is to improve your supply chain. There is something you can do about rising logistics costs. Visit us at www.totalogistix.com.

Expedited Is Not What It Used To Be

Time was, expedited shipments covered up a lot of mistakes. Well, times change, and it might not be the emergency services business that you once thought. Expedited is now the fastest growing sector in the transportation environment.

While there’s an additional cost, many shippers are weighing these costs against the benefits of guaranteed delivery times and the increased cost of production time to compensate for shortages in inventory. Fact is, it may be an inexpensive insurance policy for high-demand customers. What’s the cost of losing business compared to that of the additional expedited shipment?

At TOTALogistix, we have the experience, resources and leverage to help make expedited an integral part of your supply chain strategy. Visit us at www.totalogistix.com.

Regional Costs to Improve Infra-Structure Take Their Toll

The recent Minneapolis bridge collapse will have a national impact on us all, regardless of where wecall home or operate our business. As states access their infra-structure rebuilding costs, state politicians are busy raising taxes to pay for new bridges and roads.

New Jersey’s Governor Jon Corzine has proposed raising tolls 50% on the state’s major thoroughfares,including the NJ Turnpike every four years from 2010 to 2022. After 2022, tolls would increase every four years until 2085 to reflect inflation.

On another front, the ports of Long Beach and Los Angeles added a $35.00 fee to each container beginning June 1st. It was such a good idea, they added another $15.00 to begin January 1st. That’s $50.00 per container or about $1.4B to pay for new bridges, rail and highway construction. In terms you can relate to,if you bring in 1,000 containers into the west coast, it’s another $50,000 out of your pocket.

It’s a long way from Long Beach to New Jersey and the opportunity for states to make money along the way is too good to pass up. There is something you can do about it. Call us at TOTALogistix, and let us help reduce your transportation costs and manage your supply chain processes. Since moving to another state won’t help, perhaps moving to another state of mind will. Put the experts to work for you at http://www.totalogistix.com/.

10+2. However you add it up, it’s more work if you’re not in the know.

On January 2, 2008 U.S. Customs and Border Protection (CBP) issued a notice of proposed rulemaking. It’s referred to as the 10+2 Rule, and it effects all ocean shipments of US bound
cargo.

The rule requires additional shipment data to be provided to CBP at least 24 hours prior to the vessel’s departure from overseas. It’s designed to enhance Customs ability to target high-risk inbound containers for inspection. 10+2 refers to the 10 data elements that must be provided to Customs by the importer or their agent, plus 2 data elements that carriers must provide. The 2 additional elements are 1). Container status message, and 2) Vessel stow plan identifying the physical location of the cargo loaded aboard the vessel.

Some data elements are not normally collected from suppliers, some hard to track down or not known early in the shipment process. Companies may have to modify their systems to accommodate the new data requirements and pay additional fees to brokers for forwarding this
information. In any event, the result may mean extra time lag and increased inventory levels.

If you want to know how it may affect your company, just give us a call. Visit us at www.totalogistix.com or call John Mead, Director of National Accounts at 800.989.0054 x 105.

United Parcel Increase: What Does It Mean For You!

December 31st 2007 isn’t the end, it’s the beginning of the biggest rate increase in shipping history. After all, the $6.1 billion payment UPS needs to make to Central States has to come from somewhere. And that somewhere is most likely out of your pocket in the way of higher shipper costs.

The announced rate increase of 4.9% for ground and 6.9% for Air doesn’t paint the whole picture. These rates are averages, and a closer look reveals each shipper’s budget will be impacted in a different way.

For example, higher zone shippers are realizing increases in the 9-12% range. Surcharges are increasing up to 20% in some cases. Irregular and oversize packages up to 12.5%. Address correction? How about a 20% increase!

While we see a net reduction of 2% in the fuel surcharge, those costs are calculated monthly, and there’s no guarantee that number won’t change with the tide. A half percentage point change results in approximately $200 million to UPS.

Fact is, there’s been a 31% increase over the last 37 months. So what’s the best way to determine what this all means to you? Well, you can sift through the 184 pages of terms and conditions, but unless you’re an expert, you still won’t figure it out. Or simply call us because we know what it’s going to cost you, and what you can do about it.

Visit us at http://www.totalogistix.com/.

On-line Sales Slipping? Maybe You Should Look at Your Shipping!

B2C sales via on-line shopping has seen double digit
growth year after year for some time now. However, if you’ve been watching the numbers slip, there may be one number you should look at more closely.

Consumers who abandon their sale at check-out say the biggest reason is hidden costs. And what’s the biggest cost? Shipping.

A recent survey conducted by PayPal finds that almost half the respondents cite excessive shipping costs as the number one reason to check out and not check-thru to payment. Savvy consumers are now shopping for the lowest shipping cost in addition to the best price for the item they want to purchase.

Whether you offer free shipping or pass the cost along to your customer, it’s not a hidden cost anymore. If you think you’re getting the best small package rate, challenge us to prove you’re right…or see if we can do you one better.

Call us at 800. 989. 0054 x120 or check us out at www.totalogistix.com. The result could be more sales and more profit. So why wouldn’t you do it?

What’s The ROI on TMS?

Transportation Management Systems can be an invaluable tool in managing shipment activity and reducing transportation costs. A recent Supply Chain Digest survey quantified just how valuable. It determined the opportunities depended on three basic factors:

• Level of TMS technology
• Level of consolidation opportunities
• Plans for centralizing decentralized transportation functions

While there is some overlap of activity, these are the net results in dollar savings:

• Optimized LTL to Multi-Stop TL 5-20%
• Improved operations 10-30%
• Improved core programs 3-10%
• Carrier selection 2-6%

While the savings can be substantial so too can the costs for a sophisticated TMS system. So why make the investment in IT if you don’t have to? Just (click here) and take a tour of our TMS system. Who’s making so much money that they can’t afford to save more?
You can reach us at 800.989.0054 x120. We’d be pleased to help save you money.

Just How Important Is Landed Cost?

First of all, we all know it’s important. But then why is it no one seems to calculate landed cost the same way? Is it goods landed at port of entry? Or, as some suggest, is it goods delivered to
final destination?

For years, it seems landed cost was calculated as port of entry. But was that because it was the easiest thing to do? A recent Penn State Research Survey suggests to accurately determine
landed cost, you need to capture costs in six categories:

• Purchase price
• Transportation and logistics
• Customs and imports
• Inventory costs
• Overhead and administration
• Risk and compliance

Of six, multi-billion dollar companies studied in various industries, not one captured all the costs. And 46% were calculating total landed costs via Excel spreadsheets. The reason? Penn State feels a major contributing factor is lack of centralized data management. In summary, logistics IT still has a long way to go. But on the other hand, it’s come a long well as well. To see how far, check out our information management systems at http://www.totalogistix.com/. We believe the road to supply chain improvement lies in the details.

See for yourself, or even better, give us a call to discuss what we can do to reduce your logistics costs at 1 800. 989.0054 x120.

So. How Much Was That Increase?

Is it coincidence that both FedEx and UPS raised their prices
6.9% this year? To be fair, we did get a 2% reprieve on fuel…
but that was just rescinded due to the combustion of fuel prices.

Fact is, the real increase is in the hidden accessorial charges…as
much as 30% of your bill could be accessorials! Each small
package shipment could contain anywhere from 2 to 10 charges
per shipment. We know because we audit every shipment.

If you’re not getting your bills electronically, we suggest you do.
Only then can you begin to understand just what you’re getting
and how much you’re paying.

At TOTALogistix we capture and analyze
every invoice. We uncover hidden costs and use our
leverage to see you get the best price and proper discounts
from your carriers. So why not start by challenging us? Let
us prove to you what we can do with information and
leverage to reduce your costs.

Visit us at http://www.totalogistix.com/. We’ll gladly accept that challenge.

Are You Willing To Challenge The Numbers?

We all know that transportation costs are continuing
to increase. With the economy in its current state
we have to question everything. So, one question is:
Are you willing to challenge the numbers?

Are you getting the best price for shipping and
are you uncovering all the hidden costs? Well maybe
the question really is: Are you capable of challenging
the numbers?

At TOTALogistix we capture and analyze
every invoice. We uncover hidden costs and use our
leverage to see you get the best price from your
carriers. So why not start by challenging us? Let us prove
to you what we can do with information and leverage to
reduce your costs. Visit us at http://www.totalogistix.com/.
Take the TOTALogistix challenge.

Is Your Supply Chain Efficient Enough To Handle $200 A Barrel Oil?

We all thought $100 a barrel for oil would be a magical ceiling,
like most magic, that was just an illusion that went up in smoke.

In spite of over capacity for LTL and Truckload in some markets,
transportation costs are still rising. And fuel surcharges have
enabled carriers to push all those risks back on to the shippers.
The American Trucking Association now states that fuel costs
are now exceeding labor costs for drivers. And for truckload
carriers, fuel costs can be 25% or more of total operating costs.

Goldman Sachs has predicted that oil prices are headed for
$200.00 a barrel, and there’s a real chance that we’ll see $150
by the end of the year. While reducing costs in your
supply chain is your objective, at those prices, it’s a lifeline.
We may not be just talking profitability, we may be talking
existence! There is something you can do about rising prices.
Visit us at www.totalogistix.com and see what we can do to
improve the picture.

“We Can Save You Money On Small Package Shipments.”

Is that too direct? We don’t think so. The recent price increases from FedEx and UPS represent the largest increase in shipping history. So being direct is the best way to answer the question we know you’re asking yourself: How can I reduce my transportation expenses? Fact is, the small package sector is the fastest growing niche market in the logistics industry, about $110 billion annually. For anybody who’s counting, that’s about 5 billion packages.

The announced 4.9% rate increase doesn’t paint the whole picture. These are rate averages, and a closer look reveals everyone’s budget will be impacted in a different way. Higher zone shippers could realize increases in the 9-12% range. Irregular and oversize packages? How about up to 12.5%.

In total, surcharges are increasing up to 20% in some cases. When you factor in the possible accessorial charges, it adds up to a 31% increase over the last 37 months. So, if you’re wondering where all your profits are going, a good place to look is out the back door.

We want you to know there is something you can do about it. Getting the right price comes down to what you know and the leverage you have to negotiate with. Our Parcel Solution can reduce your costs by about 15%, but that’s only the beginning.

We audit every shipment and provide detailed, actionable reports that show destination, lost savings, accessorial charges and total costs. To see more, visit us at http://www.totalogistix.com/. Or call Scott Shearer at 800.989.0054 extension 108 Someone has to pay for all these increases. We’re guaranteeing it doesn’t have to be you. Email us