Three Tips For Negotiating Ocean Contracts

If you've ever been involved in negotiating a contract with an ocean carrier, you know how complicated it can be.

You're bombarded with hundreds of surcharges, and each carrier uses their own system, structure, and rates.

These contracts are comprehensive because they have to cover every possible contingency. But that doesn't make negotiating them any easier.

So how do you make sure that you're not chained to an unfavorable contract for years?

Take a look at what to do BEFORE you negotiate any ocean contract for the best results.

First - Find Out What You Actually Need

Do you only ship freight during certain seasons? How much capacity do you need? Do you need extensive customer service or do you just want barebones freight?

These are questions you need to ask yourself before you begin negotiating. Carriers assume certain things when you're getting a quote. If you don't go in knowing exactly what you'll need you'll be slammed with charges and fees for services that are completely irrelevant to your business.

Know the level of service, security, and price that you're willing to accept and you're already halfway to a favorable outcome.

Second - Take Current Market Conditions Into Account

The key to getting what you want in a contract negotiation is being able to anticipate the responses of the other party. How are the rates looking in today's market? Are they likely to try to lock you in to a yearly contract? Will they be trying to push more services on you than you need?

The more you study, the more likely you'll know what they're going to offer before you even begin to talk with them! This will let you lead the conversation in the direction you want, and most importantly, to the price you want.

It'll also let you avoid any surprises when they start naming numbers.

The last few years have been terrible for ocean carriers, and they've raised rates tremendously to combat that. Experts suggest that you always look for short-term contracts in today's climate, simply because the pricing is so volatile. Certain carriers have been dropping prices quite drastically to attract more business.

Short term contracts will also let you slip out of any agreements if the conditions on the ground change suddenly (as they have recently).

Third - Don't Just Focus On Price

Whoever you're trusting with your freight is going to be responsible for a major segment of your business. Any problems on their end will mean problems on yours.

Therefore, don't just look at price when you're looking for a carrier.

Are they reliable? What level of product security and insurance do they offer? Would they be able to accommodate your needs in terms of capacity during peak seasons?

There's nothing worse than having tons of willing customers who want to buy your product - and not being able to get your product to them.

All these tips share a common factor if you want the best results from ocean contracts...

Do your homework.

Proper research and planning before a contract negotiation will ensure that you come out ahead.

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Manage your ocean rates and contracts more efficiently. Work faster, quote smarter with QMS and QMSlite from Catapult International - www.gocatapult.com.

Freight Forwarders: Here's the #1 strategy for bidding on RFPs

It's no surprise that most major shippers utilize formal RFPs to negotiate shipping rates.

After all, it lets them compare proposals with the same information - making comparison between forwarders that much easier. It lets them state exactly what they need, and get pricing for that particular part of their business. And once word gets out an RFP often makes forwarders come to them, which can increase competition.

All in all, it's a win-win for shippers.

But for the freight forwarder like you, it's less ideal. You have to adapt your bid to suit their needs, rather than focusing on the strengths of your business. Usually this means simply providing a price by which your whole bid may be judged. But more importantly, it becomes difficult to stand out outside of price when you're competing with so many other bids.

So how do make sure you're maximizing the return on every bid you make?

Here's the secret strategy experienced freight forwarders have learned about RFPs that might come as a shock:

It's not about winning the bid.

Wait a minute, you're saying. If I don't win the bid, what would be the point?

Here's the thing.

You're not always going to be able to offer your services at a price lower than your competitors. 

In fact, you probably won't be able to in most cases. And the undeniable fact is that shippers using RFPs are going to give priority to the cheapest bids.

So in those scenarios where you KNOW you will be undercut on price by a substantial margin, you should bid anyway.

Even if you are certain you will lose.

The reason is that your lower-priced competitors probably cannot offer the same level of service you can. Often, they've underestimated how much the contract will cost them in operating costs, and realize they are losing money, or just not making enough for it to be worth it.

In these situations, it's not unusual for the shipper to drop the forwarder due to bad service, or for the forwarder to drop the contract.

If you make a good impression in your bid, even with your higher prices, you will be in a strong position to pick up certain lanes if anything should happen.

So your goal going into these losing scenarios should be to create a relationship with the shipper - giving you the possibility for business together down the road.

Alternatively, you can aim for only winning some of the bid, while letting others go to competitors.

Whatever your decision, you should choose whether you want to win the bid, win only part of the bid, or lose (but make a strong impression) before you actually bid.

In this way, every bid you make is a potential business investment that may bear fruit in the future. So you'll never feel like you've wasted time on an RFP.

Here are three other tips:

Always describe what your company offers that makes you different from your competitors.

Don't forget to take seasonality into account when bidding.

And, feel free to add supporting material to enhance your bid within the framework of the RFP.

Once you adapt the spirit of "losing to win," you'll find that RFPs offer an entirely new opportunity for business.

_____________________________

Springboard by Catapult International provides easy to use software that helps forwarders and NVOCCs quickly and accurately respond to complicated RFPs - learn more.

Freight Forwarders: Here Are 3 Keys To Attracting More Business

It's rough sailing in the seas of logistics right now, especially if you're a freight forwarder.

With carriers raising their rates, it become less profitable to import or export products. That makes it harder than ever for you to get new business. And if you're like most freight forwarders, you might not be taking full advantage of what you have to attract new clients.

There are several incredibly easy methods of making sure you are maximizing your lead generation and client list.

Here are three of them:

Secret # 1: Don't Just Focus On Price

Now, you know that many of your prospects come to you because you can get them the best rates on shipping.

And that's important.

But you offer something much greater than being able to save them money: Your expert experience from years of handling freight.

You know just how valuable that is when it comes to making sure everything goes smoothly.

• Whether it's getting shipments through customs in days instead of weeks...
• Whether it's making sure that freight going across the water is totally secure and insured from the worst threats, without breaking the bank...
• Whether it's negotiating with carriers to save your clients time and money they didn't even know was on the table...

That experience matters. And you NEED to sell THAT to your prospects.

So next time you're talking about your services, explain exactly how you can help your clients outside of just getting them the best rates. In fact, you should put a price on your expertise whenever you can. You can even market that that initial conversation with a prospect as a free consultation.

You'll be surprised at the difference it makes.

Secret #2: Communicate. Communicate. Communicate.

How many times have you gotten business simply because you happened to talk to the right person at the right time?

Freight is seasonal. And a client who needs something moved today might have another job for you in a few months. But only if you talk to them about it.

So communicate.

DON'T ASSUME that if your past clients and prospects need freight moved, they'll automatically think of you. You need to remind them. Constantly. And it doesn't need to be a hard-sell.

Send them holiday cards or e-mails. When you read a particular article online or in the newspaper that relates to them, mention it to them. Keep track of what they're doing on LinkedIn and congratulate them on milestones.

If you keep it up, we guarantee that you will hear that sentence: "Great to hear from you, do you happen to handle...."

Secret #3: Get More Leads With Automatic Online Quotes

In the modern day, your website is the face of your business. So it's not surprising that most freight forwarders today get a vast majority of their business through their online presence.

Now, most websites have something like a "contact us" page. The prospect fills out their information and sends it. Then you reply with a quote and engage with the prospect.

But there's a problem with this method: They just want a quote. And they don't want to wait hours or days for it.

One method of drastically increasing the number of inquiries you receive is to use an online form that will automatically quote rates. Your customer can then book the shipment right there, on the spot. There is no delay from extra phone calls and waiting for someone to get back to them. 

Rate management software like Catapult International's QMS and QMSlite products are cost effective tools that enable you to offer real time quoting from your website. 

Growing sales is often a matter of eliminating friction from the selling process - and the "back and forth" of quoting creates a lot of that friction. Aside from the other benefits of a rate management solution, online quoting maybe the best way to improve sales for your business.

It enables you to capture all those people who are reluctant to talk to someone just to get a quote. More importantly, it's a feature that your competitors most likely won't have.

A recent survey of forwarders shows that less than 25% of your competition has this capability.

The question was posed to a group of forwarders about their process for how they get quotes to customers. The goal was to find out how many companies were taking advantage of the available technology. The four responses included:

Customer calls you on the phone: 22%

Customer send you an email and you email back: 44%

Form on your site and you email back: 11%

Instant quote on your site - no waiting: 23%

This may be the competitive edge your business is looking for.

There are hundreds of other methods of getting leads.

But there is a saying that comes to mind:

"Choose just three ways of getting clients, and do them well," said a great marketer. "You will have all the business you can handle."

What is a GRI (General Rate Increase)?

It's a term that only people in select industries become familiar with.

Maybe whoever handles your freight recently raised their fees. Or perhaps your freight manager just told you that it's going to cost a lot more to get those products in from Asia.

They tell you this is the fault of something called a General Rate Increase, or GRI.

Here's an explanation of what that is, in plain English:

A GRI is when ocean carriers raise their fees for ocean freight.

That means if it's going over water, they will charge you more for getting things where they need to go. 

Correspondingly, freight forwarders, importers, and exporters have no choice but to raise THEIR rates to offset that increase.

GRIs are terrible news for anybody who relies on international freight. And there were hundreds of GRIs and Surcharges implemented by ocean carriers in 2013 alone.

So you might ask the question:

What's going on with the industry, and more importantly, why does it keep costing you more and more money to do business?

Why A General Rate Increase?

It's been a rough few years for shipping and freight, and it's also the reason why there have been so many GRIs.

Ocean freight carriers are losing money.

In fact, some are only saved from complete collapse by government assistance.

There are many reasons, but the main one being something all of us can sympathize with - high gas prices.

The cost of fueling a 60,000 ton cargo ship making a journey halfway across the world is astronomical. 

Accordingly, even a small increase in fuel costs can have a huge impact on the operating costs of freight carriers.

Fuel costs have remained stubbornly high since 2011, so it's no coincidence that there have been a large number of rate increases since then.

But it gets worse.

Overcapacity. Competition amongst services. Declining demand due to high rates.

It is a vicious circle that is detrimental to both the carriers and anyone seeking to move freight.

How To Minimize The Effects Of General Rate Increases

Freight carriers have continued to remain unprofitable even in 2013.

Which means you shouldn't expect the rate of GRIs to slow down anytime soon.

Depending on the ocean carrier, the price of a GRI can vary dramatically. In fact, competition among carriers sometimes causes certain carriers to forgo rate increases!

If you are planning to move large volumes of freight this year, we suggest the following:

1) Do It Early:

You can expect more rate increases this year, no matter what carrier you're using. If you can, try to get your product shipped as soon as possible to avoid the price increases BEFORE they happen.

2) Compare Rates Before You Commit:

Different ocean carriers will have drastically different prices. The carrier that is the most affordable today might not be two months from now. There has been extreme fluctuations in pricing, especially during these last few years. For this reason, we suggest you carefully pay attention to CURRENT rates and how they change. You can easily do so by using software that makes it easier to compare rates automatically.

A General Rate Increase is detrimental to everybody it affects.

But with some planning, you can minimize the effects of any GRI and avoid rate increases before they occur.

How is it that online retailers can afford to offer Free Shipping?

If you are an online retailers you probably have asked the question. "How do so many of my competitors offer free shipping on customer orders?", which is then followed by the thought.  "How can I compete with free shipping offers?"

There are a few ways online sellers are able to provide discounted or free shipping, but unfortunately the reality is there are NO free shipping service options with Fed Ex or UPS or the USPS or anyone else. So, whether your business is a high volume shipper, small ecommerce start-up, or growing ecommerce retailer there is no such thing as free shipping for anyone.

 What large shippers do get, that most small companies typically do not, are significant discounts on UPS/ Fed Ex  published rates. In addition, if a company is shipping a very large amount of the same size packages there is often the chance to get preferential rates in those circumstances.

Clearly if you are a small online retailer you are at a real disadvantage because you are without the leverage to negotiate better rates with FedEx or UPS. But in the end, just like your business, the big online retailers are covering the cost of shipping with the margins in their products.

What to do about it as a startup or small online retailer? Obviously it is paramount to figure out ways to minimize shipping expenses because these are costs that are not going away no matter how big you get. The cost to an online retailer of managing inbound freight and other logistics expenses are a matter of scale as well so make sure to be managing shipping costs for larger product moves as well. This includes the right ecommerce shipping software as well.

Consider alternatives to FedEx or UPS by looking at the options offered by the USPS. Many companies find that options like a Flat Rate Priority Mail box are a good way to reduce costs. FedEx and UPS charge hefty residential, extended delivery area and fuel surcharges that hurt the economics of shipping Business to Consumer (B2C).

More distance equals more cost so your shipping location is directly correlated to your shipping costs. The densest population centers in the US are located in Northeast part of the country. If you are shipping from San Francisco to customers in New York, the cost could be double or more than the cost to ship to New York from a location on the east coast. Another advantage the big guys have is the volume to ship from multiple points within the US. They can service most of the country with a bunch of cheaper ZONE 2 or 3 shipments (short distances), as opposed to expensive ZONE 8 shipments (long distances) going cross country by having multiple warehouse locations to ship from. In the end it does take volume to make it worthwhile to set up multiple shipping points around the country.

Many 3rd party ecommerce order fulfillment warehouses will pass on their volume discounts with FedEx/ UPS, so consider outsourcing your order fulfillment and shipping. Your operation will potentially benefit from the scale and volume of all the customers shipping from that fulfillment center, not to mention the other costs and headaches of managing your own fulfillment.

Internet Marketing and Search Engine Optimization for Trucking and Logistics Companies

As an example, if you are a trucking company that specializes in frozen food 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. This is internet marketing for transportation companies.

You will notice there are other listings at the very top and right margin of the Google results pages. Those are ads that companies 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 logistics 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.

Want free industry advice from "experts" on shipping and fulfillment?

Two websites you may want to check out if you have questions on shipping and fulfillment are Quora and Focus. Both give you the chance to post questions and get answers from industry "experts" that will hopefully be helpful. Here is a link to an example of a question from Quora.

http://www.quora.com/Whats-the-cheapest-shipping-method-for-businesses-shipping-high-volumes-of-small-boxes-within-the-U-S-where-the-box-weighs-more-than-13-ounces?__snids__=18166978#ans388442

Or, feel free to contact me at kenneth.kowal@yahoo.com to talk about order fulfillment and logistics. Visit kennethkowal.com.

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.

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.
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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

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.