Quick Primer: What is SEO and Why It Matters to Logistics Companies

Frankly stated, SEO, or Search Engine Optimization is the process of getting your companies website found when people search for certain terms on Google (or any other search engine like Bing or Yahoo).

As an example, if you are a third party logistics company that specializes in frozen food service distribution, then you want your name to appear in Google's Search Engine Results Page (SERP) when customers are looking for the type of services your company offers. SEO is the process of creating and positioning your site to rank well on Google's search pages - organically. If someone goes to Google and searches on "frozen food logistics" you want to be the first company that potential customer sees on the page.

You will notice there are other listings at the very top and right margin of the Google results pages. Those are ads that company's pay for to be located in those areas. Each time someone clicks on one of those links it is costing the company $.50 to several dollars for the privilege of a user clicking on their link. Organic search like we are talking about here is the process of getting your site to rank high on the page without paying any of Google's pay per click fees.

So what is Google looking for to rank your company highly as a logistics software company, or as an ecommerce order fulfillment provider? There are two main things: relevant content on the site related to the search terms and site credibility, which means there are other sites with "backlinks" to your site. Backlinks are a type of "social proof" that other website are linking to your website because it is credible and worthy.

So what to do? Figure out what "keywords" your customers are typing into Google that relate to what services you are selling and add related content to your site in the form of blog posts or new pages that will show Google you have authority on those topics. Then, work to get backlinks to your website from other credible websites. This can be done by responding to blog and forum posts and getting your website address out there. Both these strategies are complimented by a well executed social media strategy.

These two ideas are just barely scratching the surface of ways to improve SEO for your site. The benefits of ranking well with Google are almost priceless, yet easy to achieve when executed properly.

Cost Components of Order Fulfillment

One of the largest expenses for any business that sells products online is the cost for order fulfillment. In total, the order fulfillment process includes the storage, packing, and shipment of customer orders that come through an online store. These costs are beyond the expense of sourcing and purchasing the products being sold (regardless of what the business might be selling) plus all the marketing and other various cost of sales type expenses. Taken all together, this long list of different cost items have to be managed effectively for a business to maintain an acceptable profit margin. It goes without saying, a positive profit margin is vital to the viability and success of an ecommerce retailer. Fortunately, making the right decisions regarding the storing, packaging, and shipping costs are likely the easiest on the list to impact for the better.

Below is a list of the three primary cost considerations for ecommerce retailers when it comes to packing and shipping customer orders.

• Packing Supplies. These costs include the dunnage (or packing material) to fill in and around to protect the product, as well as the cost for the cardboard carton the goods are placed into. Basic shipping supplies and cartons from UPS, FedEx, and USPS are free, as is the logistics software they will provide - so that is one thing to take advantage of when you can. Of course shipping a lot of empty space in a bad fitting carton is a poor choice for a number of reasons. Your business may also prefer to brand packaging with a company logo and not a big UPS label! The additional cost of customized packaging has to be considered.
• Direct Shipment Costs. The choice of who ships the order (whether it is USPS, UPS, Fed Ex) and at what service level (Ground, Next Day Air, etc.) impact costs often more than any other single item. Shipping Ground Service instead of Next Day Air can often save over 2/3 off the shipping cost. Of course it can also add 4 or more days on to the delivery time. Volume means a lot when it comes to shipping with FedEx and UPS, so make sure your contract stipulates that discounts on shipping will kick in once you hit certain volume thresholds. There is a "hybrid" option in which a shipping company (such as FedEx or DHL Globalmail, or various others) acts as a mail integration partner. These companies will pick the packages up on their own trucks but then move the parcels to the USPS who make the final delivery to the consumer. This set up works only in a business to consumer model and generally requires a minimum daily amount of parcels (typically 250 per day).
• TIME. Is packing up customer orders in cartons, maintaining space for storage, and printing shipping labels the best use of your time? As a small business owner you should be asking yourself constantly throughout the day - Is what I am doing right now helping to make my business more successful? Managing your social media logistics presence, marketing, or selling are all important priorities. Chances are you could make better use of your time than doing your own order fulfillment.

New LinkedIn Group: Social Media for Logistics

We have created a new group on LinkedIn called Social Media for Logistics.

The Social Media for Logistics Group is a forum for individuals to share and discuss their experiences with Social Media as it relates to supply chain logistics.

Our goal is to build the group forum into a reference resource with examples and advice on how to use Twitter, LinkedIn, Facebook, blogs, and other social media platforms.

Members include thought leaders from 3rd Party Logistics Companies, Supply Chain Professionals, Carriers, Shippers, Manufacturers, Marketing, Logistics/ Transportation Management Software providers, and Order Fulfillment, as well as Supply Chain Industry Researchers and Publications.

Please visit LinkedIn and join in on the conversation.
________________________

Social Media for Logistics Blog

Logistics and Social Media

Whether you recognize it or not, your logistics company has, and is a brand and social media is a key marketing platform for growing and protecting that identity.

So what are the various social media platforms available out there? Here is a partial list of the most popular and likely relevant that businesses need to be aware of:


•Twitter: A micro blogging site in which short notes can be broadcast to a list of "followers" in 140 character bites. Twitter is gaining popularity and has over 170 MM registered users. An under-appreciated fact is that Twitter is a great search tool and more effective than Google in a lot of ways.

•Facebook: A social networking site with over 500 MM registered users, Facebook is the largest social media platform on the internet. Facebook users are highly engaged and active so the right presence in that space is a powerful thing.It cannot be avoided anymore - it is vital for every business to understand and actively manage the tremendous upside that social media offers for companies today. As a logistics services provider social media is every bit as crucial to your company as it is for the large international consumer brands we all see in the media every day.

•Blogging: Yes, even you should have a blog... There are countless free services for hosting a blog (Tumblr, Blogger, Wordpress) and blogging gives you the chance to establish credibility in an industry, educate, and communicate with customers.

•LinkedIn: LinkedIn is a business focused social network in the way Facebook is a personal social network. LinkedIn is built to facilitate conversations and networking amongst its users.

You should be asking yourself if there really is any legitimate value to all of this to my organization. As an example, every logistics companyneeds to understand that Twitter is NOT just a way for some celebrity to tell the world what they ate for lunch today. It is a way to connect and interact with their community of fans. Think about what the person is really doing - they are actually furthering their personal brand among their core audience, and if they do it right they are attracting new followers who will get in line when their next movie comes out. These are the results any business that uses Twitter is also looking to achieve in its own way.

The opportunity and the challenge of social media for logistics services providers is to find where your core audience is online. It is certainly not worthwhile to Tweet or spend time creating a Facebook account online if there will be no one there to see it. Using social media is an investment of cost and time - the community and following does not happen quickly but the rewards can be significant if done right. Whether you are a logistics software provider or a truckload carrier, your customers are somewhere in an online community.

The key to building this following is to create interest in your presence through content or services that inspire people to engage. This can be educational content or tools that help people do their jobs better in some way, or it can just be funny or engaging activities that people develop an interest in (see Farmville on Facebook!). Marketing 101 states that engaged customers are loyal customers and getting customers to interact with you because they want to is winning the hardest part of that battle.

Social Media for Logistics Services Companies

It cannot be denied any longer - it is important for every company to understand and actively manage the role that social media plays for businesses today. As a logistics services company social media is every bit as important to you as it is for the large consumer brands we all read about every day. Recognize it or not, your company is a brand and social media is a vital tool for developing and protecting that brand.

Twitter is NOT just a way for famous people to broadcast what they had for breakfast, it is a way to listen and engage customers. The opportunities in the world of social media for logistics companies are limitless. Using Twitter, Facebook, LinkedIn and some of the other social media services will support your efforts in the areas of sales, customer service, and marketing.

I am barely scratching the surface with this list, but here are some examples of how a logistics company can use social media:

• Read industry blogs (like EasyLogisticsManagement) and search on Twitter for what people in the Supply Chain and Logistics markets are talking about. Watch how people are being creative with their approach to using social media which will help inspire new ideas for yourself.
• Use Twitter and Facebook to engage customers and keep your name in front of them. Answer questions and make suggestions without an in your face sales pitch. Be helpful and the customers will think of you when they need you.
• People “tweet” and use social media outlets when they are not happy with service so if people are talking about your company, you want to know about it and be able to react.
• Participate in Social Networking Sites (like http://www.logipi.com/ or LinkedIn) and Supply Chain Forums to establish yourself as an expert in the space. These sites allow you to showcase yourself as a subject matter expert.

Shipping Something Next Day Air With FedEx Or UPS? READ THIS FIRST!

If you are looking for a way to save money on shipping small packages here is a tip. FedEx and UPS service many points next day guaranteed with their low cost Ground Service. So, why pay for next day air service on a package you need to be delivered tomorrow at double or triple the cost? For example, from our food fulfillment warehouse in eastern PA, FedEx will service anywhere from New York City down to Washington DC next day with their ground service. There is no need for us to EVER pay for next day air to any of those points. Similarly, FedEx Ground is just a 2 day service to Chicago and most of the Midwest. Again, as a more cost effective option compared to Second Day Air, Ground is a better choice.

Check out the FedEx site to calculate transit time from your location to where your package is going.

To illustrate, startup online ecommerce business and artisanal sausage retailer Sausage Obsession reduced their shipping costs by over 50% when they began shipping products Ground instead of Next Day Air. The handmade sausage products Sausage Obsession sells are all shipped fresh or frozen. Obviously getting the customer orders shipped from their order fulfillment service operation has to be done quickly and reliably. With the same type of packaging and amount of dry ice they were using before, Sausage Obsession is now able to service all their customers half way across the country without paying for expensive Next Day Air delivery.

Ecommerce Order Fulfillment Explained

What are the different service and cost components of packing and shipping with a 3rd party fulfillment operation?

If you are an online retailer thinking about partnering with a 3rd party ecommerce order fulfillment warehouse to handle your pack and ship operation you should understand the different categories of service a typical fulfillment house will provide.

Receiving and Storing Product: This includes the process of receiving your goods into their warehouse. It begins with a thorough inspection of the product as it arrives to ensure there is no damage and the exact products and quantities match what is expected based on your direction and the Bill of Lading. On an ongoing basis it is important for the provider to maintain and report accurate inventory numbers. Storage requirements depend on the product but can include the facility maintaining a temperature controlled environment, custom racking, or on-shelf storage. Receiving and Storage rates are generally billed as either a per pallet cost, or a per package cost depending on the product.

Order Pick Charges: An integral part of the fulfillment process is how orders get transmitted from you to the facility. This can happen as part of an integration with your shopping cart software, EDI, flat file, or even a fax. As the orders are received, they are assembled or “picked”. Order Pick charges are generally based on a flat per order fee that includes the first item, and then a small additional charge for each additional item in the order. So, as an example, if your typical order is for three items, you could expect to pay $4.50 per order plus an additional $.50 for each additional item, making the total $5.50 to have the order packed.

Administrative Support: Fulfillment providers will often charge a monthly service fee for things like reporting or fielding customer calls. These charges can varying by a large extent and depend on the requirements you put in place.

Packing Materials: This would include the cost of the carton the order is shipped in, any dunnage (packing material to protect the product in the box), as well as the labor to assemble the box. These costs may or may not be included in the Order Charges detailed above. Remember, the majority of costs for a fulfillment operation are labor, so each small action (assembling a box, printing a label, placing an item in a box, etc.) each take time. It may feel like you are being “nickeled and dimed” but it is really about charging for the exact time spent for your specific needs. Fulfillment is not a one size fits all service in any sense.

Shipping Costs: The handling costs associated preparing an order to be shipped (printing the shipping label, palletizing boxes, etc.) are generally covered by the Order Charges. But obviously one big remaining cost is for shipping (FedEx, UPS, USPS, etc. assuming you are shipping boxes, not pallets at a time). If you have one, it is often best to use your company’s own account number and most fulfillment providers will allow you to do that. They may, however have a better contract with one of those carriers and be able to pass on some of that savings.

More info on Ecommerce Order Fulfillment and Frozen Food Fulfillment.

Selling a Food Product Online? Things to consider with your fulfillment operation

What are the special considerations for an online retailer selling food products online?

The whole order fulfillment process is made up of many steps, but there are two factors that apply to dealing with food products. First, the location you choose to store and pack your shipments needs to be food grade, which means it meets certain standards for cleanliness and pest control. The facility is periodically inspected to make sure those standards are upheld. Second, you need to consider if there are there any requirements related to the temperature in the facility that need to be considered while the products are stored and also when they are shipped.

From a storage and handling perspective, non-frozen or “dry” food products can be handled similar to any non-food product. The main exception is of course that the requirements for maintaining a food grade facility need to be adhered to. Food products, whether dry or not will likely have expiration or best used by dates so it is important to manage the inventory to make sure product is still fresh and usable. The FIFO (first in first out) method of managing inventory generally makes the most sense for food products. Frozen products obviously need more care and temperature control during storage. Keeping frozen food frozen is clearly important, but more subtle requirements such as controlling humidity and ambient temperature are also important.

From a shipping perspective, the needs are very similar. Dry food products can ship similar to most any item, although some non-frozen products may need to avoid being frozen at the risk of damaging the product or its packaging. Shipping frozen products is an additional, but manageable challenge. There are many options for stock, or custom packaging to be used when shipping frozen food (or any cold item for that matter). Kits that contain a styro-foam “cooler” and tight fitting carton are likely the best option and can be designed for most applications. Items packed in the box, along with dry ice can be kept safely frozen for 24 to 48 hours during shipping under normal conditions (think hot summer and cold winter). Needless to say, some level of expedited delivery, preferably overnight needs to be used to make sure product gets delivered on time. However, keep in mind, UPS and FedEx offer Ground service that provides next day delivery to locations within a pretty good size radius. There’s no need to pay for expedited delivery when ground will suffice –the cost savings could be >50%.

Small Parcel Shipping Explained: Comparison of UPS and FedEx Services

Despite how UPS and FedEx brand their services, they are basically similar. Below is an explanation of how the services correspond between the two providers.

Overnight Services:

FedEx First Overnight = UPS Next Day Air Early AM

FedEx Priority Overnight = UPS Next Day Air

FedEx Standard Overnight = UPS Next Day Air Saver

2-Day Services:

FedEx 2 Day = UPS 2nd Day Air AM & UPS 2nd Day Air

3-Day Services

FedEx Express Saver = UPS 3 Day Select

Ground Services:

FedEx Ground = UPS Ground

FedEx Home Delivery = UPS Ground

FedEx SmartPost = UPS Basic

For more information to help your online retail business work better, visit www.fillship.com.



More information for online retailers: ecommerce order fulfillment

What is the purpose of a Bill of Lading?

A Bill of Lading is a document issued by a consignor (or shipper, such as an order fulfillment center) and signed by a carrier at the time of pick up, acknowledging that specified products have been received on board as cargo for delivery to a named consignee, or destination. It serves as a contract between the shipper and/ or owners of the goods and the carrier for a number of purposes:

• It is evidence of a valid contract of carriage, and may incorporate the complete terms of the contract between the shipper (such as a startup ecommerce order fulfillment servce) and the carrier which may include payment terms, rates, description of product classification, as well as other duties and obligations.

• It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (see SLC below). The information could include pallet and/ or piece count, weight, product description and classification.

• Once signed by the consignee, it is a receipt of goods received providing final confirmation of the quantity and condition of the product received. A signature by the consignee is acknowledgement the goods are received as described on the BOL unless discrepancies are otherwise noted at the time the BOL is signed.

• The signed BOL may also often serve as a Proof of Delivery (POD) document as well as back up for the Freight Invoice.

The Bill of Lading will typically at minimum contain the following information: Shipper’s Name and Address, Consignee’s Name and Address, Description of Goods including pieces and weight, NMFC Classification, Bill to Party (or Payment Terms), relevant load ID numbers, and Carrier’s Name.

As a matter of process, the driver from the carrier will sign the BOL at the time of pick up when the goods are loaded onto the carrier’s equipment. At this point the carrier is responsible for inspecting the goods to ensure the quantity and condition of the product is as noted on the BOL. Depending on the shipper’s rules, the BOL can be signed “Shipper Load and Count”, or “SLC”, which means the carrier has not been given the opportunity to inspect the goods prior to loading when it is not practical or permissible. A copy of the signed BOL will often be kept be the consignor.

The original copy of the BOL will physically accompany the shipment from pick up through delivery.

Upon delivery of the shipment to the consignee, the receiving location will inspect the product as it is unloaded – prior to signing the BOL acknowledging receipt. Any damages or shortages will be noted by the consignee on the BOL at that time. Generally speaking, if a consignee notices damages at a later time and nothing was noted on the BOL at the time of delivery the shipper and carrier will not be held accountable for the issues. An executed, final signed copy of the BOL will be retained by the consignee as a receipt of the shipment delivered. The carrier will retain a final copy of the Bill of Lading as well.

Visit http://www.eroutinguide.com/ for a complimentary Bill of Lading generator tool.
_______________________

Ken Kowal is Director of New Business Development for order fulfillment service company Landis Logistics.

6 Reasons why a Routing Guide is crucial for effective Transportation Management

What is a Routing Guide?

A Routing Guide is a document whose purpose is to outline the rules that govern how a company’s shipments should be handled. This could include any shipment ranging from small package, airfreight, import/export, to full truckloads of product. The goal is provide a document with straight forward instructions detailing what carrier and account numbers are to be used for any given shipment when the cost will be paid for by that company.

To illustrate, a Routing Guide would specify the correct way to send a shipment in the following sample situations:

• What company to use for sending office correspondence (Fed Ex or UPS?) and what account number to use: the best answer may be different depending on service required such as over-night or ground.
• The correct Less-than- Truckload carrier to use when a buyer has purchased product from a supplier and the order needs to be delivered to one of your locations: LTL tariffs are complicated and certain carries may be cheaper depending on the origin and destination for a given shipment.

Any time a shipment is being routed on behalf of your company, and the cost is hitting your bottom line, it is important to make sure the correct routing decision gets made. A good Routing Guide ensures that happens.

What happens without an effective Routing Guide?

Having a clear, concise Routing Guide is of particular importance when a company is decentralized geographically, has multiple locations, or a large supplier/ vendor base.
When the correct routing is not followed several negative things can happen.

• Product is routed with the wrong carrier resulting in potentially bad service and higher cost
• Product arrives at the wrong location
• Packaging may be incorrect or sub-standard
• Bill of Lading, filled out incorrectly or shipments will have incomplete documentation , interrupting the receiving process at your facility
• Freight Invoices are incorrectly rated or sent to the wrong address for payment, delaying payment
• Shipping volume will not be recognized when volume discounts are part of a contract

As part of a Routing Guide, specific packaging and paperwork requirements you need suppliers and vendors to be mindful of can be spelled out. For instance – do you need pallets to be stacked less than a certain height to fit in your facility’s racks? Do you require an Advanced Shipping Notification or Purchase Order number noted on the Bill of Lading for the product to be received properly? There are many low cost and free Transportation Software solutions offering tools for helping to create and distribute your Routing Guide.

Routing Guides are intended to be dynamic documents. Make sure you have a process to update and distribute the Routing Guide to your entire vendor base and across internal departments as updates are made. If the updates are not disseminated effectively then the instructions will become quickly outdated and miss-routed and/ or miss-rated shipments will occur.

Not having an up to date Routing Guide creates extra cost and hassles for a company, so make sure your Routing Guide document is current and widely distributed.

Transportation Management Software - Beta Testers Needed! (part #2)

Not one to let good content go to waste - the following is a portion of the instructions we are working on for the Routing Guide functionality.

Feedback is always appreciated.

We are looking for companies to beta test the new parts of our new transportation management software so get in touch if you are interested.

Thanks.

eRoutingGuide is built to allow flexibility with how you create your company’s Routing Guide. You are able to include as much information as you feel is necessary, and in any format. Remember, the idea is to firmly set the ground rules up front for all vendors, suppliers or anyone shipping product on your company’s behalf – so include any information you feel is important. Think how easy it will be to get your up to date Routing Guide into the people’s hands that need it. You’ll save time, energy and cost when your freight is routed right the first time.

eRoutingGuide allows you to upload an existing .pdf file to your personalized Routing Guide website that can be accessed by whomever you choose. There is also a large free-form area to add text with additional information for users to be aware of. Click Here for an example of a completed profile.

You’ll want to include basic information such as key logistics contacts with Names, Phone Numbers, Company Locations, etc.

Most importantly, make sure you spell out the specific routing instructions for any supplier, vendor or person within your own company shipping to you, or on your company’s behalf. Below are a few ideas to get you started or click here to see a sample eRouting Guide.

- Who are your preferred carriers? As an example, if there is a supplier routing an LTL shipment moving from Georgia to a location in New Jersey – the supplier needs to know the best carrier to use is X, and it needs to be billed to your correct account number which is XXXX.
- Do you have a national account with Fed Ex or UPS? People within your company need to know what account numbers to use to make sure the correct discount is applied.
- Do you utilize a 3rd Party Logistics company to handle all your truckload routing – make sure their contact information is easily accessible.
- Are appointments required at your facilities? Who do they contact for an appointment?
- Do you require an Advanced Shipping Notification (ASN) number? Make sure vendors and suppliers know that is a requirement and the procedures to follow.

All these points should help give you the idea. Once updated, eRoutingGuide allows you to easily send companies a link to your personalized webpage.

Click Here for an example of a completed profile. We welcome your questions and feedback: questions@eroutingguide.com

Thank you for choosing eRoutingGuide. Supply Chain Software made easy.

http://knol.google.com/k/anonymous/transportation-management-software-what/4ilw4vkwik1x/1#

Transportation Management Software - Part # 1 for ShipAssist - Beta Testers Needed

Not one to let good content go to waste - the following is a portion of the instructions we are working on for the ShipAssist functionality. Routing Guide to follow in part #2.

Feedback is always appreciated.

We are looking for companies to beta test the new parts of our new transportation management software so get in touch if you are interested.

Thanks.





ShipAssist is built to allow flexibility with how your facility’s Shipping Dock information is displayed on your personalized ShipAssist website. You are able to include as much information as you feel is necessary, and in any format. Remember, the idea is to firmly set the ground rules up front for any trucking company coming into your shipping dock – so include any and all information you feel is important. Think of the phone calls and hassles you can avoid by the carriers getting this information in advance!

Click Here for an example of a completed profile.

Here are some recommendations:
You’ll want to include basic information such as Phone, Address, Directions, and Hours.
Most importantly, make sure you include the specific Rules and Regulations at your shipping dock. Here are a few ideas to get you started or click here for an example.
- Are appointments required? Who do they contact for an appointment?
- Upon arrival, drivers must Auto- Check In by texting their load number to xxx-xxxx (*if your facility has eRoutingGuide Auto-Check-In service)
- Is a lumper service required? What is the rate?
- Is a lift-gate required?
- How many hours of wait time should a driver expect before you will approve detention?
- Will a delivery be refused without an Advanced Shipping Notification number?
- Is a pick up or some type of load number required?
- Are drivers allowed on the dock? Are you a shipper load and count (SLC) facility?
- How are OS&D issues handled?

Those points should give you the idea. Once updated, ShipAssist allows you to easily send companies a link to your personalized webpage and require that all carriers and vendors confirm their understanding of the rules and regulations on your ShipAssist website. Your Shipping Department will thank you.

Click Here for an example of a completed profile.

We welcome your questions and feedback: questions@eroutingguide.com

Thank you for choosing ShipAssist. Transportation Management Software can be simple!

New Interview About Transportation Management Software Startup - eRoutingGuide.com

I had a blast last Friday talking to Justin from http://www.asable.com/ talking about startup Transportation Management Software company, eRoutingGuide and ecommerce order fulfillment company, Fillship.com. Check out the interview on the AsAble.com site.

Also, check out a conversation with Dustin Mattison of Logipi.com.

Ship products? eRoutingGuide is looking for companies to beta test a new product, no cost or obligation

If you ship anything, you should check out http://www.eroutingguide.com/ - any new user who signs up by 9/1/10 will be given free access to the new ShipAssist and Routing Guide products. All that is asked is feedback on how the system is working and ideas for improvements.

Here is an overview of the system:

Executive Summary:
eROUTINGguide.com is easyTMS. The eROUTINGguide vision is to offer on-line tools that give small and medium size companies access to transportation management technology that was previously only affordable to large companies. Each module within the system is designed to save time, protect information, and improve decision making for the logistics professionals in that organization.

• ShipAssist - Provides tools that help companies by preventing accessorial charges and improving communication with carriers.
• Online Routing Guide - Improves inbound and outbound routing guide compliance, reducing costly errors and service issues.
• easy TMS - Helps businesses reduce freight costs through ensuring better carrier rate management, shipment routing decisions, and carrier communication.

Each tool is simple to implement and has an ROI of days, not months or years.

ShipAssist:
ShipAssist provides easy access to an online location for shipping department to post facility rules and regulations, maps/directions to their facility, or any other information a shipper wants to communicate to carriers. As a standard procedure, the shipper directs carriers to their personalized site to review the facility’s regulations and provide a documented acknowledgment of acceptance of the rules. The main benefits of the service are to set clear guidelines and expectations for carriers to prevent disagreements over detention or other accessorial charges, as well as eliminate calls to the shipping department asking for directions or other requests for basic information. There is ASN (Advanced Shipment Notification) functionality available as well.

The target market for the service is a manufacturer with one location, or a national retail chain with multiple locations, each having unique receiving requirements.

Online Routing Guide:
eRouting Guide provides an online location for companies to post their corporate routing guide in an open or password protected environment. The routing guide information is posted on a personalized site for the business and can be customized with any relevant content. Instead of sending out hard copies of routing guides, potential users can reference the information online. Updates can be made instantly and notification of any changes are sent immediately. Routing compliance is improved, therefore reducing time and expenses incurred to the business resulting from misrouted shipments. The goal is to make sure each shipment is routed the right way every time. There is ASN (Advanced Shipment Notification) functionality available as well.

The target markets for the service are any manufacturer with vendors or suppliers sending inbound product or companies with de-centralized shipping origin point.

Negotiating Tips Part #2 - Logistics Services

Here is part #2 on some tips for negotiation with logistics providers. Missed part #1?

Never be the first person to name a figure...
This is an expensive lesson to have to learn, but a good one. I do a lot of contract work, and one of the first questions I'm usually asked is "What's your hourly rate?". This is a high pressure question, and I often found myself blurting out a figure that was lower than what I really wanted.

These days, I've learned the importance of getting the other person to say a number first. Now, I respond to that question by asking "What's the budget for this contract?". Often, I'm surprised to discover they're offering me a better deal than I thought they were.

Ask for more than you expect to get...
Once the other person's given their figure, even if it's much better than you expected, say something like "I think you'll have to do better than that". Don't be arrogant or aggressive. Just say it calmly.

When they enquire about your expectations, ask for more than you expect to get. Few people will walk away from a deal once it's commenced, and you can let the other person feel as if they're winning by lowering your "unrealistic expectations" a bit at a time.

Let them believe the final decision doesn't rest with you...
Once a negotiation starts, most people want to get it over with as quickly as possible. Let their impatience beat them. One great way of doing this is to let them believe the person they're negotiating with isn't actually you, but some other "authority figure".

Say something like "Well, I'll have to talk it over with my boss before I can give you a definite yes".

A skilled negotiator will always want to talk to the person who has the final decision, but don't let them do it. Say the person with the authority over the deal wants you to sort things out but still needs to have the final say. Tell them you'll discuss it and get back with an answer tomorrow. Ask them to make sure that's their best offer you can take to your "authority figure".

Don't act too interested...
Just giving the impression that you're willing to walk away can do wonders for getting a better deal. Always play the reluctant buyer or seller.

Don't leave the other person feeling as if they've been cheated...
Many people try to screw every last drop of blood from any negotiation. This is a mistake. If the other person feels they've been cheated, it can come back to bite you. They may not fulfill their part of the deal, or refuse to deal with you in the future.

Most negotiations should leave both parties feeling satisfied with the outcome. Be willing to give up things that don't really matter to you in order to create a feeling of goodwill. For example, if I'm renegotiating my order fulfillment per pick charge, or pack and ship rates downwards, I'll often offer to sign a longer legnth contract. That way, the provider has a commitment for my business for a longer time.

Ken is a 15 year veteran of supply chain logistics and has founded companies in the ecommerce fulfillment and transportation management software markets.

Negotiation Tips Part #1 - Logistics Services

As a logistic professional, negotiation is crucial part of managing relationships with your supply chain vendors - whether it is negotiating carriers rates and contracts, pick and ship rates for fulfillment, or an implementation of a new logistics software to support your operation's Routing Guide.

Don't take it personally...
A mistake that people often make when negotiating is to become too emotionally attached to winning. They shout, threaten and demand to get their way. This is counter-productive.

Most deals are only possible if both people feel they're getting something out of it. If the person across the table feels attacked, or doesn't like you, they probably won't back down. Many people hate bullies, and will be more willing to walk away from a transaction if it involves one.

Keep calm, patient and friendly, even if the other person starts losing their cool. Make sure you leave any pride or ego at the door. You're much more likely to do well that way.

When you are reviewing a proposal from a vendor, don't get suckered by the "rules" trick...
When someone sends me a contract to sign, if there's something on there I don't like, I'll cross it out. I'm also happy to write things I want added in if I think they should be there. Sometimes, the other party will come back to me and say "You're not allowed to make changes to our contracts like that".

This highlights a common tactic used by experienced negotiators. They know many people are sticklers about following rules. So they'll make up official sounding pronouncements and insist that "this is the way it's done" or "you're not allowed to do that". If someone starts trying to box you in by adding rules to the deal, ask them to provide proof that such rules really exist.

Look for Part #2 of this post next week.

Ken is a 15 year veteran of supply chain logistics and has founded companies in the ecommerce fulfillment and transportation management software markets.

Discussing the start up of eRoutingGuide on This Week in Startups

We went live with our new transportation management software site, eRoutingGuide this week. Coinciding with that, I made an appearance on the popular live web show, This Week in Startups (http://www.thisweekin.com/). I was part of the "Ask Jason" segment - looking for some ideas for finding an online community of logistics professionals. Here is a link to the show you can view on YouTube:

http://www.youtube.com/watch?v=SqSaek5yB1s


On August 13th I will be on another start up program http://www.asable.com/ talking about eRoutingGuide. Check out their site as well.

I have a few more appearances lined up in the next few weeks to talk about entrepreneurship with a focus on order fulfillment and other logistics services.

Fuel Surcharges make up 40% of your logistics management costs - know how they work

Fuel Surcharges make up 40% of your logistics costs – you need to know how they work

Around 10 years ago is when fuel surcharges became ubiquitous. Prior to that time, the cost of fuel was always there of course, but in those days shippers essentially paid for fuel as a part of their linehaul rates. The market changes in fuel costs were for the trucking companies to worry about. The impact of fuel was something left to maybe negotiate at year’s end, or perhaps as part of a contract renewal. The shipper’s perspective was that managing fuel costs were a trucking company’s problem to understand and account for. Since that time, the burden of dealing with market changes in fuel costs has shifted from the trucking companies to shippers.

With fuel surcharge making up 30-40% of a typical company’s logistics costs it important for managers in both operations and finance to know how fuel surcharges are calculated and how the diesel market affects their freight spend. These days shippers are directly exposed to the potentially budget crushing fluctuations in fuel costs and the curiously structured surcharge matrices. Theoretically the fuel surcharge tables that most carriers use are a direct representation of actual fuel costs to calculate the fuel surcharge but I have yet to be given an explanation that makes me feel comfortable that the matrices are more than just an extension of a carrier’s line haul costs. This is not to say that fuel costs are not a major cost factor for carriers, I just disagree that the tables represent the impact of fuel accurately for a carrier from an operating perspective. There is too great of a difference from carrier to carrier for it to be a true representation. This tells me there is a “fudge” factor built into the numbers allowing carriers to hide operating costs beyond just fuel in the fuel surcharge matrix.

An ecommerce company shipping from a order fulfillment operation? For small package shipping, companies are at the mercy of UPS and Fed Ex for not just air and ground services and pricing, but to both company’s own fuel surcharge tables. There is not a lot to understand about small package fuel surcharge other than to know you have to think of the cost as an extension of their pricing and pay attention as the fuel prices change – for better or worse.

For truckload and LTL shipping, you’ll see fuel surcharge matrices calculated as both a per mile and a percentage of line haul cost basis. In both cases – the fuel surcharge table will be based on the US Governments Diesel Fuel Index (posted on the DOE website). It is updated weekly and is also calculated on a regional and national basis. Depending on the footprint of your trucking company either type of fuel index could apply. The “per mile” basis is simply calculated by adding the per mile charge on top of your line haul rate, then multiplied by the number of miles shipped. The “percentage” type surcharge takes the cost of the shipment (for LTL, the discounted tariff rate and for TL, the linehaul portion) and adds the percentage of cost derived from the table on to that. Just like you audit line haul costs on freight invoices, it is also important to audit fuel surcharges.

Fuel matrices are generally built to adjust with every $.05 increase or decrease in the DOE diesel fuel index and are effective for any shipments tendered in a given week’s period of time.


Ken is a 15 year veteran of logistics and supply chain operations. He has founded companies in the ecommerce order fulfillment and transportation management system markets.

Startup Order Fulfillment and Social Media for Logistics

Eco-Friendly Packing Materials For Ecommerce Order Fulfillment

The most ubiquitous packaging materials at ecommerce order fulfillment operations are of course bubble wrap and peanuts. The pros and cons of both are well documented, but the most important thing to know is they are typically made from plastics (as in oil) and are not bio-degradable. With the amount of bubble wrap and peanuts used around the world each day the problem is pretty self evident.

These products are made from some pretty nasty stuff Polyethylene, Polystyrene and Polyurethane (which consists of all sorts of harsh chemicals including acetone, methylene chloride and fluorocarbons).

Aside from the toxic chemicals used with most plastic based packing materials and the huge energy resources that going into creating them; the amount of landfill taken up after they are discarded is significant.

Here are some ideas for alternative packaging options to consider using when preparing your customer orders for shipment.

Soy based expandable foam products are a more eco-friendly option. Derived from soy, and therefore renewable and biodegradable, this product conforms precisely to the shape of your products. This maximizes protection by minimizing movement on the inside of the carton. The product is also very light weight, reducing the additional shipping expense of heavier materials. Realistically expandable foam is best for larger operations due to the space the specialized equipment and process will require.

Consider using old newspapers as they can also be a good option as well. Shredded or balled up newspaper has decent cushioning ability. My opinion is that shredded paper has a neat look in the box and adds some “eco-cred” to your products. Aaesthetically the balled up news print leave a little to be desired, and there is no efficient way to “ball up” enough paper to keep up with a high volume fulfillment operation. Shredded paper, although requiring an extra step (to shred) does led itself to a higher volume set up.

Again, it’s not as pretty, but old cardboard boxes can be cut into strips and then rolled tightly. Place the rolls vertically into the packing box around the item in the box, the rolls will then expand providing a cushion. Similar to newsprint, if some care is taken up front to cut or prepare the boxes neatly the end product could work in a way that looks good to your customers.
Reusing something like paper or cardboard for packaging is always preferable to recycling, and of course, MUCH better than throwing those items away. Cushion packaging is sold that is made from one hundred percent post consumer waste paper – give that a try if you don’t like the look of used newspapers.

Biodegradable packing peanuts are available, made from grain sorghum and corn starch. For environmentally friendly soft foam in rolls, starch-based products such as GreenCell have the added bonus of being anti-static which is great for cushioning computer parts and electronic equipment.

For wrapping and packaging inside the box, use or reuse something. And the same goes for the cartons you are using - go for boxes made from recycled cardboard. The options these days for recycled corrugated boxes are very diverse and any place selling boxes will likely provide these product options as well .


Ken is a 15 year veteran of logistics and supply chain operations. He has founded companies in the ecommerce order fulfillment and transportation management system markets.

Three benefits to automating your freight invoice audit process

Reduce Freight Costs:

First off - the reality is a lot of freight invoices are incorrect, so they all should be checked. Mileage calculation errors are common and the complexity of fuel surcharge matrices mean that the applicable surcharge changes week to week. Do a spot check of some invoices and I can promise the wrong surcharge is getting applied on some shipments. Partnering with a resource to help automate this auditing process will make it simple for you. Most freight invoice auditors will claim a freight savings of 2-6% off your logistics spend. I can’t verify that either way, but I do agree an opportunity for savings exists. On the high end, you should expect to pay $.80-.85 per invoice, but much less with higher volumes of invoices or using EDI to facilitate the process. This would involve getting each of your carriers to interface electronically with the freight payment company. This is a bit complicated to get started with but will become relatively simple to maintain once the whole process is in place.

Reduced Shipping Administrative Expenses:

Companies conducting their freight invoice audit in-house are using expensive employee resources to ensure carrier invoices are correct - and probably not very effectively. Realistically, a manual freight audit is not able to uncover the same number of carrier audit billing errors and shipping service failures that an automated freight invoice audit process is able to identify. Automating the invoice audit process will eliminate the excessive time currently allocated to these tasks and as a result generate additional cost reduction in time saved. Think about it – how are your carrier rates sheets organized right now? Hardcopy print outs in a drawer? Maybe a spreadsheet attached to an email in someone’s inbox? How efficient or accurate is it for someone to be auditing each carrier’s invoice by referencing one of those sheets, running the miles, adding stop charges, and accesorials – and doing it correctly? Plus – they need to check this week’s fuel surcharge from the DOE website, reference yet another table provided by the carrier, and add that amount to the carrier charge. You do all this for one truckload, when you can automate the process in a way that eliminates the work and the potential errors.

Freight Management & Carrier Reporting:

From a business management standpoint, this is the possibly the most valuable benefit of automating freight invoice audit. Information. The importance of knowing all your freight data is accurate and accessible allows for effective business reporting and use of that data. Understanding your logistics and supply chain costs in detail is vital to effectively running a business. Attempting to manually audit and collect freight data is too time consuming and very error prone. Think about the valuable components of freight spend data. The better you understand the cost components that make up your freight spend, the better you manage your business. If you keep getting hit with detention a particular consignee you what to know about… if freight costs are going up because of fuel, you want to know about that too. Good information is vital to making your business run better.

Ken is a 15 year veteran of logistics and supply chain operations. He has founded companies in the ecommerce order fulfillment and transportation management system markets.

The Benefits of Saas for Logistics Management

Benefits of SaaS (Software as a Service) for Transportation Management
In the old way of thinking, companies were used to buying, building, and maintaining their IT infrastructures despite exponential costs. SaaS gives companies an alternative to those headaches. Now, a company can plug in and subscribe to services built on shared infrastructure via the Internet. The SaaS model has gained popularity in recent years because of the many benefits it offers to businesses of all sizes and types, but it also begs several questions and considerations to be thought of as well.

The main benefits that are attracting businesses customers to take advantage of SaaS solutions for Transportation Management:

Higher Adoption Rates: SaaS applications are easily accessible from any computer or any device—anytime, anywhere. Because most people are familiar with using the Internet to find what they need, SaaS apps tend to have high adoption rates, with a lower learning curve.

Lower Initial Costs and Easier IT Implementation: SaaS applications are typically subscription based. No license fees mean lower initial costs. Having the SaaS provider manage the IT infrastructure means lower IT costs for hardware, software, and the people needed to manage it all.

Automatic Upgrades: Because the SaaS provider manages all updates and upgrades, there are no patches for customers to download or install. The SaaS provider also manages availability, so there’s no need for customers to add hardware, software, or bandwidth as the user base grows.

Seamless Integration: SaaS vendors with true multitenant architectures can scale indefinitely to meet customer demand. Many SaaS providers also offer customization capabilities to meet specific needs. Plus, many provide APIs that let you integrate with existing ERP systems or other business productivity systems.

Items to think about when considering a SaaS solution:

Data Security is more than just user privileges and password policies. It’s a multidimensional business imperative, especially for vendors responsible for customer data. Make sure any provider you’re considering has solid policies and procedures in place to guarantee the highest possible levels of security. Carrier and order fulfillment services contracts need to be kept safe.

With on-demand applications, customers rely on their providers to keep systems and data available. You need to trust your SaaS provider to meet your business requirements, so expect them to communicate with you as a partner in your business. You need to have access to your transportation data and systems from anywhere.

Scalability is important. With any utility, customers benefit from the scale of the supplier. Scale provides a larger customer community that can deliver more and higher-quality feedback to the vendor to drive future innovation. And a larger customer community provides rich opportunities for collaboration between customers. Make sure the vendors you’re evaluating provide:

Any vendor providing on-demand services should be professionally paranoid, considering every potential disaster, and being prepared for anything.

Data backup procedures should create multiple backup copies of customers’ data in near real time at the disk level. The strategy should include a multilevel backup strategy that includes disk-to-disk-to-tape data backup where tape backups serve as a secondary level of backup, not as their primary disaster recovery data source. Failover should cascade from server to server and from data center to data center in the event of a regional disaster, such as a hurricane or flood.

Any provider offering SaaS applications needs to be able to deliver very high availability. A detailed history should be available. Vendors should provide availability data on the entire service, not just on individual servers.


Kenneth Kowal is a logistics professional with over 15 years supply chain management experience. He has founded two companies: TMS logistics solution provider and startup ecommerce order fulfillment company FillShip.com.

Top 5 Benefits of Business Process Outsourcing to your Supply Chain

What supply chain functions are currently outsourced within your organization?
Today, the current economy has presented a variety of opportunities for businesses to outsource many supply chain functions and responsibilities traditionally done in-house.

Business process outsourcing (BPO) is a method of outsourcing that involves the contracting of operations and responsibilities of a specific business functions or processes to a specialized service provider. An example would be an ecommerce company outsourcing its startup order fulfillment operation.

Within the context of a company’s supply chain, these business functions could include carrier contract negotiation, freight audit and payment, fulfillment, and many others. A Logistics Service Integrator (LSI), sometimes call a 4PL (4th Party Logistics Provider) takes the role of independently managing a company’s outsourced functions, utilizing their expertise to bring the most value to the organization.
Below is a list of 5 benefits companies are able to realize through outsourcing.

TOP 5 Benefits of Business Process Outsourcing

1. Best in Class Capabilities

Best in class service providers make significant investments in technology, methodologies, and people – because what you outsource to them is their business. Their expertise lies in the experience gained by working with many clients in similar industries and having faced similar challenges. The combination of specialization and expertise gives businesses the benefits of both while avoiding the cost of investing in technology and infrastructure to support the function. With the right partnership in place, businesses can quickly realize the benefits of a new or reengineered process through dramatic improvements in critical performance measures such as cost, quality, service, and speed. The areas best suited for outsourcing are often those that are not core to the company’s business as these will be the areas not prioritized for needed attention and improvements from a company’s already limited available resources. By outsourcing the non core function to a Best in Class provider, the company can begin to see the benefits much sooner and at a lower cost.

2. Better Use of Company Resources

Outsourcing enables an organization to redirect its resources, most often in the form of people and IT resources, toward activities which are closer related their core business. Outsourcing lets a company focus on its core business by having operational functions assumed by an outside expert. Freed from devoting energy to areas that are not its area of expertise, the company can focus its resources on what it does best and as a result better meet its customers' expectations.

3. Reduce Operating Costs

Organizations that try to do everything themselves may incur significantly higher research, development, marketing, training, and deployment expenses, all of which hurt profitability or are passed on to the customer. An outside provider's lower cost structure, which may be the result of a greater economy of scale or other advantage based on specialization, reduces a company's operating costs and increases its competitive advantage. Costs are reduced through smoothing out demand variability since the outsource company bears the majority of fixed costs. Outsourcing reduces the need to invest capital in non core business functions. Instead of acquiring the resources through capital expenditures, they are contracted for on an "as used" operational expense basis. Taking advantage of new on-demand system such as a Transportation Management System is better than creating an in-house TMS.

4. Reduce Business Risk

Significant risks are associated with any capital investments a business organization makes. Dynamic markets, aggressive competition, complicated government regulations, changing financial conditions and technologies all change extremely quickly. Keeping up with these changes, especially those in which the next generation requires a serious investment, is a very risky proposition. Outsourcing providers make investments on behalf of many clients, not just one, so the shared investment spreads risk, and reduces the risk a single company has to bear.

5. Company Lacks Necessary Resources

Businesses outsource because they do not have access to the required resources within the company. This can be in the form of a lack of intellectual capabilities or more tangible assets such as sufficient systems or staffing. Outsourcing is often the most viable option for building or improving a needed capability. It is critical to remember that outsourcing doesn't mean abdication of management responsibility nor does it work well as a knee jerk reaction by a company in trouble. When a function is viewed as difficult to manage or out of control, the organization needs to examine the underlying causes. If the requirements expectations or needed resources are not clearly understood, then outsourcing won't improve the situation; it may in fact exacerbate it. If the organization doesn't understand its own requirements, it won't be able to communicate them to an outside provider.

Ken is a 15 year veteran of logistics and supply chain operations. He has founded companies in the ecommerce order fulfillment and transportation management system markets.

New website for ecommerce retailers is Live! Fillship.com

We are proud to announce that the new FillShip.com website is live.

FillShip operates its ecommerce order fulfillment operation from a state of the art 600,000 sq ft food grade storage facility in eastern PA. The fulfillment customer portfolio ranges across a variety of customers, from frozen food to consumer electronics.

The FillShip value proposition:

Fillship.com is your shipping assistant. Focus on growing your business, and Fillship will take care of storing and shipping your product. Simply send us your merchandise to store – and when a customer places an order we take care of packing and shipping the order. Our east coast location promises you the quickest delivery and lowest shipping costs to the majority of the US population. Simple set up with professional program management.

Inquiries: customerservice@fillship.com or call 717.889.8509 or http://www.fillship.com/.

Thanks to Rob Tompkins at Landis Logistics for his support.

Fillship is an affiliate of TMS provider, eRoutingGuide.

Options for Business Process Outsourcing in the Logistics Industry – 3PL vs. Logistics Services Integrators (a.k.a. 4PL)

Business Process Outsourcing can be a practical and beneficial option for most companies. Organizations outsource for many reasons, with the desired outcome being reduced costs, improved operations, overcoming a lack of internal capabilities, gaining competitive advantage, and other benefits that are both tangible and intangible.

Outsourcing can be used in many parts of a business, but most often for what a company defines as non core functions; accounting, legal, human resources, information technology, manufacturing, sales, sourcing and logistics /supply chain management. Of course “non core” and “core” differ by company and industry. Non core can be important and critical to a company, but does not define the company and set it apart from competitors.

When it comes to logistics and supply chain management, there are two primary methods to take advantage of business process outsourcing – 3PL and Logistics Service Integrators (also known as 4PL or 4th Party Logistics).
3PL (3rd Party Logistics provider).

For about the last 20 years, 3PL’s have led the way in logistics outsourcing. Drawing on its core business, whether it be trucking, order fulfillment, warehousing, etc. - 3PL’s have expanded their offering with new or additional services. It presents a way for essentially a commodity type service logistics provider to move into higher margin, bundled services and further develop and leverage their customer relationships.
Customers, seeing value in the concept of the 3PL and always looking to reduce costs, have recognized value in the concept. The result is the market opportunity for outsourced logistics service providers, whether domestic or international became and remains sizable.

Unfortunately the reality has not lived up to the promise. The reasons are varied, but the bottom line is many 3PL’s have failed at their own business transformation beyond adding the “Logistics” moniker to their company name. Often 3PLs have not successfully moved past their core commodity service to become true multi-service providers – the trucking company is still just providing trucking services, not providing value or improving the customer’s logistics network. Others have failed to differentiate themselves against the competition. Many 3PL’s have done a poor job positioning and defining themselves in the marketplace while others have commoditized their 3PL service, as a result undoing the very purpose of their 3PL.

The complicated and varied methods for how 3PL’s look to be paid for services has added to the challenge. Shared savings, contingency and transaction based fee structures are among the many ways 3PL’s are compensated. The very method for how a 3PL is paid can be in direct conflict with the best interests of the customer whether it be a consideration of cost or service. Customers can still find they have no understanding of their true costs and service performance with all the shipping data and information moving through a 3PL.

These setbacks have prevented the growth of some 3PLs in terms of both retention and new customers. Broad fragmentation of the sector reflects both the uncertainty of how 3PLs view themselves and the diversity of customer needs. With the involvement of multiple 3PL’s customers are often forced to deal with proposals or solutions that cannot be measured against one another.

Business Process Outsourcing and the Logistics Service Integrator (LSI).

First, note that Business Process Outsourcing (BPO) is not traditional outsourcing. Traditional outsourcing is typically taking a set of tasks or functions and simply moving them to an outside service provider. A BPO provider, or in the case of the supply chain/ logistics industry, a Logistics Service Integrator (LSI), brings an expert perspective, specific knowledge and experience as well as technology to an organization. The LSI works with the company to develop a solution to improve an existing or new process through independent and unbiased analysis and recommendations.

From the service vacuum created by 3PLs, the LSI has emerged. Using a Logistics Service Integrator is much different than the traditional 3PL. The LSI is a BPO provider, is neutral, and will manage the logistics process correctly, regardless of what resources need to be used. This includes carriers, fulfillment vendors, freight payment providers, 3PL’s, or any other logistics service providers that are part of the company’s network.

The goal of the LSI is to represent the interests of the customer by bringing their specific expertise into the qualification and management of the logistics service providers. An LSI wants to position itself as an extension of and as part of its customer.

Conclusion. Although born out of good intentions, in general 3PL’s have not fully served the purpose for which they were conceived. The reality is 3PL’s have remained too focused on managing tasks and transactions in a very short sited way, and not on the important broad focus and processes of their customers. The results are missed opportunities to present real value to the organization being serviced. Logistics Services Integrators have become a good alternative for business process outsourcing. The value lies in the LSI being positioned as an extension of the organization itself. Processes are analyzed, logistics technology evaluated, and vendors qualified independently based on the unique needs of the business, with no preconceived ideas or over-riding commitment to a 3PL’s own interests. LSI’s are compensated based on the value they add, with complete transparency of costs for the business they have partnered with.

Ken is founder of two logistics supply chain management companies in the ecommerce order fulfillment and transportation management system markets.

Freight Costs are more than just the state to state rate...

Okay - so you've negotiated some great state to state rates with your truckload carriers. With fuel accounting for 30%+ of transportation costs these days, and the potential for big accessorial charges being occurred at any time from pick up through to delivery, there are a lot of factors to be paying attention to when it comes to managing your logistics costs.

The bottom line is a lot goes into your company's transportation spend beyond just the per mile rate. The following are some important factors to think about that are likely making up 50% or more of your logistics management budget.

Fuel Surcharges - The aforementioned cost of fuel is likely making up over 30% of your transportation spend. Fuel surcharge are a factor largely out of a shipper's control (aside from finding ways to be more efficient with how your trucks are routed - because less miles shipped equals less fuel costs) but paying attention to movements in the price of diesel fuel is vital to budgeting and anticipating the cost impact on your business. Truckload carriers will typically use a company's own standard fuel surcharge matrix, so if you have not already done so get your carriers on the same fuel table. It will provide more consistency on your costs and make invoice audit easier.

Avoiding detention – Make sure your dock scheduling process is working. For many shippers detention charges make up the next largest piece of cost beyond linehaul and fuel charges. Detention happens when a truck shows up at your facility to pick up a load and it is not ready. The cost impact to the shipper can run from $50 to $200+ per hour. Make sure your production planning and logistics group are communicating and product is shipping on time. Obviously getting products to your customers on time and in good shape is often the priority but there could be significant costs being incurred by your business as well.

Product damage and returns – A lot of time and cost is spent dealing with and resolving issues with product damage and returns. The following is a list of best practices for shipping to help manage the issues.

Best Shipping Practices:

- Know what a carrier's liability limits are before shipping.

- Use only new packing material, use of used cartons or packing may limit your ability to receive full value for any loss or damage.

- When necessary, verify the identity of the driver before loading his truck.

- Properly complete the bill of lading using correct classification descriptions.

- Clearly mark any special delivery requirements on the bill of lading.

- Make sure the driver clearly signs the bill of lading noting the total number of "outside" pieces received.

- Never permit a driver to sign "shippers load and count (SLC)" unless he is signing for a sealed load.

- Make sure all trailer loads are sealed by your personnel.

- Record seal numbers on the bill of lading before it is signed.

- When shipping hazardous materials make sure the individual preparing and offering the shipment to the carrier is properly trained and certified to handle hazmat shipments.


Ken Kowal has 15 years experience in logistics supply chain management and is founder of companies in the ecommerce order fulfillment and the transportation management system markets.

Visit out other blog - Truckload Pricing Trends

Press Release - ShipStarter.com: Turnkey Order Fulfillment Services for Online Retailers

Press Release:

May 24, 2010 - Lancaster, Penn.

ShipStarter.com announces new turnkey order fulfillment services catering to small and medium size ecommerce businesses.


ShipStarter operates its ecommerce order fulfillment operation from a state of the art 200,000 sq ft food grade storage facility in eastern PA (serving New York and New Jersey and clients nationally). The fulfillment customer portfolio ranges across a variety of customers, from frozen food to consumer electronics.



The Order Fulfillment value proposition:


ShipStarter.com is your shipping assistant. Focus on growing your business, and Fillship will take care of storing and shipping your product. Simply send us your merchandise to store – and when a customer places an order we take care of packing and shipping the order. Our east coast location promises you the quickest delivery and lowest shipping costs to the majority of the US population. Simple set up with professional program management.


Fillship is an affiliate of eRoutingGuide, Transportation Management System.

Logistics Fuel Surcharges

A new type of TMS (Transportation Management System)

May 21, 2010 – eROUTINGguide.com announces plans for the July 2010 launch of its innovative new online transportation management system (TMS). Its TMS 2.0 – an easyTMS solution in the cloud.

The simple application represents a new way for companies to manage and control their logistics process from start to finish. Each module within the system is designed to save time, protect information, control costs and improve decision making for the logistics professionals in that organization.

easyTMS – Organized, secure carrier contract management with Tools for Carrier Selection, Route Optimization, Load Tendering, and Invoice Audit is what is does. Just as importantly, easyTMS provides services in a SaaS, or on-demand environment making implementation and upkeep simpler for users and per user costs a fractional of traditional TMS systems.

Ship Assist – Resolve disputes over Detention and other accessorials before they happen. With Ship Assist, all carriers delivering or picking up shipments from your facility sign off on the procedures at your shipping dock via a customized online webpage – creating a clear understanding of the rules and preventing future disputes.

Routing Guide – Reduce your headaches and transportation costs at the same time by improving compliance to your company’s Routing Guide. This on-line tool provides a simple, clean process for updating and distributing your Routing Guide.



Inquiries: kkowal@eroutingguide.com or call 717.889.8509 or visit: www.eroutingguide.com

eROUTINGguide provides order fulfillment services for e-commerce businesses.

Supply Chain Technology and TMS

I found this interesting article by Logistics Management Magazine containing and interview with Adrian Gonzalez from ARC Group. It touches on Supply Chain Technology and TMS (Transportation Management Systems).

http://ow.ly/1Q62d

Adrian also has a blog that is very much worth following.

Shipping Considerations for Online Ecommerce Retailers

A significant expense for any online retailer is the order fulfillment process which includes the storing, packaging, and shipping of a customer’s orders. This is beyond the cost of sourcing the merchandise, regardless of what the business sells, plus marketing and other cost of sales expenses. Taken in total, all these costs have to be managed effectively for a business to maintain profit margins. A positive margin is obviously vital to the success for any online retailer. The good news is making the right decisions regarding the storing, packaging, and shipping components could possibly be the easiest to influence on that list with the most substantial impact for the betterment of your business.

The following are three main cost considerations for start up online retailers when it comes to shipping.
1 – Supplies. These include the packaging material (or dunnage) to fill around and protect the merchandise as well as the carton itself.
2 – Direct Shipping Costs. Your selection of who ships the order (USPS, UPS, Fed Ex?) and at what service level (Ground, Next Day Air, etc.) impact costs tremendously.
3 – Your Time. Is packing boxes, dealing with storage, and printing shipping labels the best use of your time? As a small business owner you should be asking yourself constantly throughout the day – Is what I am doing right now helping to make my business more successful?

Supplies – Basic shipping cartons in a limited range of sizes are free from the USPS, Fed Ex, and UPS. That’s a good option if what you are shipping fits and is not either too big or too small. Shipping a lot of empty space in every box with your merchandise is not efficient and many businesses prefer to exert more control over the customer experience with custom or specialized packaging for shipping orders. The packing material used to protect the merchandise comes in a lot of options – with some even being eco-friendly (such as styrofoam “popcorn” and expandable foam made from soy). The additional expense of customized packing materials and cartons has to be considered.

Direct Shipping Costs – The 3 main options for shipping small packages in the US are the USPS, UPS, and Fed Ex. All three offer a form of Ground (slowest and cheapest service) as well as several expedited (overnight, 2 day, etc.) delivery services. Volume speaks when you ship with UPS and Fed Ex so talk to your rep about volume discounts that will kick in once you hit certain volume thresholds. Watch out for residential delivery charges with UPS and Fed Ex. USPS pricing is generally lower – but service time are also generally slower and there are less shipment tracking options for the order as well. There is a hybrid solution in which a company (could be UPS, or DHL Globalmail, or several others) acts as a “mail integrator”. These companies pick up on their own trucks but then take the packages to the USPS who takes care of the final delivery. This set up works best in a business to consumer model and requires a minimum daily quantity of packages (usually about 250 per day).

Your Time – Again, is printing shipping labels the best use of your time? The excitement and desire to grow a business is what motivates most online business owners. Focus on helping customers fill their shopping carts.

eROUTINGguide - a new "easy TMS" SaaS Offering for Logistics

Here is an overview of a new system we have in development that can perform many Transportation Management System functions at lower price points that tradition TMS Systems, and with easier implementation.

Our targeted go live date is July 1, 2010 and are looking for shippers interested in beta testing any of the functionality.

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Executive Summary:



eROUTINGguide.com is easyTMS. The eROUTINGguide vision is to offer on-line tools that give small and medium size companies access to transportation management technology that was previously only affordable to large companies. Each module within the system is designed to save time, protect information, and improve decision making for the logistics professionals in that organization.

• ShipAssist - Provides tools that help companies by preventing accessorial charges and improving communication with carriers.
• Online Routing Guide - Improves inbound and outbound routing guide compliance, reducing costly errors and service issues.
• easy TMS - Helps businesses reduce freight costs through ensuring better carrier rate management, shipment routing decisions, and carrier communication.

Each tool is simple to implement and has an ROI of days, not months or years.

ShipAssist:
ShipAssist provides easy access to an online location for shippers to post facility rules and regulations, maps/directions to their facility, or any other information a shipper wants to communicate to carriers. As a standard procedure, the shipper directs carriers to their personalized site to review the facility’s regulations and provide a documented acknowledgment of acceptance of the rules. The main benefits of the service are to set clear guidelines and expectations for carriers to prevent disagreements over detention or other accessorial charges, as well as eliminate calls to the shipping department asking for directions or other requests for basic information. There is ASN (Advanced Shipment Notification) functionality available as well.

The target market for the service is a manufacturer with one location, or a national retail chain with multiple locations, each having unique receiving requirements.

Online Routing Guide:
eRouting Guide provides an online location for companies to post their corporate routing guide in an open or password protected environment. The routing guide information is posted on a personalized site for the business and can be customized with any relevant content. Instead of sending out hard copies of routing guides, potential users can reference the information online. Updates can be made instantly and notification of any changes are sent immediately. Routing compliance is improved, therefore reducing time and expenses incurred to the business resulting from misrouted shipments. The goal is to make sure each shipment is routed the right way every time. There is ASN (Advanced Shipment Notification) functionality available as well.

The target markets for the service are any manufacturer with vendors or suppliers sending inbound product or companies with de-centralized shipping origin point.
easy TMS:
easy TMS provides simple, easy to implement Transportation Management System functionality for truckload volume shipments at a low monthly rate. The system is web-based, or a SaaS.

eTMS Functionality:

• Tool for organizing and securely storing carrier rate contracts in a central location, allowing companies to make sure the correct routing decisions are made on every truckload shipment. Rate sheets that in the past were buried in a drawer or non-existent are now in one location so in the event of employee turnover or a need cross train additional employees the information is accessible to the right people.
• The Rate Quote tool identifies the top 3 low cost carriers for a given shipment, calculating and presenting the mileage, line haul and fuel surcharge costs.
• The system eliminates time consuming phone calls and manual processes by facilitating communication with carriers through automatic load tendering functionality, appointment confirmations, and Bill of Lading generation.
• Freight invoice pre-audit is integrated into the tool, automating the audit process for shippers – saving time or the need for a costly third party invoice audit company.
• The Sales Quote tool allows parties outside logistics to calculate costs for sales or budgeting in a controlled environment, taking this burden off the shoulders of the logistics group.


The target market for the service are small to medium size shippers currently reliant on manual processes for managing their carrier rate contracts and carrier communication processes.

Order Management, Shopping Cart Software, Ecommerce Platform, Order Fulfillment for Startup

What is a TMS?

Transportation Management System or Logistics Management (TMS) – What is it?

A Transportation Management System is software that helps businesses manage the execution of its logistics supply chain, in particular coordinating and optimizing the movement of products and materials.

The general functions and benefits of a Transportation Management System (Logistics Software) include the following:

Shipment Load Planning and Shipment Routing Optimization – This functionality helps in areas such as determining the most cost effective mode to ship an order (truckload, ltl, air freight, intermodal, etc.), or the optimal way to combine multiple orders together into larger shipments. Carrier rate agreements and contracts are often housed within this area as well.

Routing Guide – Helping to ensuring vendor compliance to inbound routing guides is crucial to cost management.

Execution Management and Carrier Communication – This includes tools for assisting with carrier selection, calculating shipments costs (including line-haul, fuel surcharges, and accessorial charges), tendering loads and facilitating carrier communication (bills of lading and proof of delivery).

Visibility/ Shipment Tracking – Providing delivery status updates and alerts, this tool allows proactive program management and notice of potential delivery problems in advance.

Freight Bill Audit & Payment – Automating the freight audit and payment process, saving time and improving accuracy, or ending reliance on an outside third party.

Other functions:
Business Intelligence/ Reporting
Claims Management
Order Fulfillment Returns Management
Appointment Scheduling

Transportation Management Systems can be deployed on client’s systems or on-demand SaaS (Software as a Service).

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visit our other blog: Truckload Pricing Trends and for more information on ecommerce order fulfillment services for ecommerce retailers and fulfillment for startup online retailers.