PARCEL July/August 2012

PARCEL

JULY-AUGUST 2012

www.PARCELindustry.com

Making offshore shipping part of your logistics toolbox. page 14

Gaining a complete view of your transportation spend. page 18

Saving money and resources by emphasizing packaging efficiency. page 22

STANDING OUT

FROM THE REST: PARCEL’s Annual Top Performers Issue!

Page 32

JULY-AUGUST 2012 | volume 19 | issue 4

PARCEL PUBLISHER Marll Thiede

DEPARTMENTS 06

Going Global

10

International Shipping Challenges

BY TOM STANTON

07

Transportation ABCs

One Simple Step You Can Take Today to Prepare for the 2013 General Rate Increase

BY THOMAS ANDERSEN

08

Supply Chain Pivot

The Lighter Side of Packaging: Bloopers, Blunders, and Bungles

BY JAY F. PERDUE

11

Supply Chain Management Outsourcing Issues and Solutions

BY SAM KARAM

12

Ship Right

Delivering the Goods: How to Contain Costs While Keeping the Customer Happy

BY KAREN D’ANDREA

Innovation

BY ROB SHIRLEY

09

Packaging

Aloha! Learning to Surf the Parcel Way

Saving Money and Resources by Emphasizing Packaging Efficiency

Optimizing Cross-Channel Shipping Using Cloud-based Technologies What to take into account when deciding if cloud-based technology is right for you

BY KEITH A. MCCALL

COLUMNISTS 05 30

Editor’s Note

31

Wrap Up

A World Financial Crisis… Are You Ready ?

BY MICHAEL J. RYAN

Parcel Counsel

Airbills, Pricing Agreements, or Contracts: What’s the Difference?

BY BRENT WM. PRIMUS, J.D.

TOP PERFORMERS

Get to know your solutions providers! These companies cover every aspect of your shipping operation, from contract negotiation to warehouse management software, so check it out!

34 35 36 37 38 39 40

ADVERTISING Ken Waddell 608-442-5064 ken.w@rbpub.com Josh Vogt 785-320-7950 josh@rbpub.com

Gaining a Complete View of Your Transportation Spend

This case study shows how an intensive multi-year investigation led National Instruments to discover new ways to not only reduce their packaging costs, but also their ecological footprint.

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GRAPHIC DESIGN Kelli Cooke

2901 International Lane Madison WI 53704-3128 608-241-8777 • Fax 608-241-8666 www.PARCELindustry.com

It’s not enough to focus on only one aspect of your transportation budget; here’s how to get a full picture.

BY PAUL JENNINGS

22

PRODUCTION DIRECTOR Chad Griepentrog

FEATURES

Tips for shipping packages outside the continental US.

BY KEVIN UNBEDACHT

18

CIRCULATION Rachel Spahr | rachel@rbpub.com

Parcel Perspectives

Economic Optimism and Parcel Shipping

BY PETER STARVASKI

14

EDITOR Amanda Armendariz amanda.c@rbpub.com

Bell & Howell Canada Post Cass Information Systems CT Logistics Engineering Innovation enVista Green Mountain Consulting

41 42 43 44 45

Interlink Technologies NLG Shipping Ontrac Pitney Bowes U-PIC

REPRINTS For high-quality reprints, please contact our exclusive reprint provider.

Scoop Reprint Source • 800.767.3263 ext. 307 www.scoopreprintsource.com PARCEL (ISSN 1081-4035) is published 6 times a year by RB Publishing Inc. All material in this magazine is copyrighted 2012 © by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to PARCEL, RB Publishing Inc. or its staff becomes the property of RB Publishing, Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or PARCEL. RB Publishing Inc. and/or PARCEL expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine.

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EDITOR’S NOTE AMANDA ARMENDARIZ

Standing Out from the Rest It’s hard to believe that once again, summer is almost halfway through. Memorial Day kicked off our summer, but it seemed that before we even knew it, the lazy days of June were gone, the 4th of July festivities came and went, and August is staring us in the face. Where did the season go? Well, even if time is moving a bit too quickly for my preference, there is a bright side — mid-summer means it’s time for our annual Top Performers issue! Even though we’ve put out this issue for many years now, I never tire of seeing the companies whose profiles grace these (digital) pages. There are some familiar faces each year, whose companies have withstood the test of time and remain relevant in the parcel industry. Then there are those new faces, and they are just as refreshing — innovation drives any industry, and the small shipment industry is no different. To see these new players in the parcel game is a sign that our industry is thriving — what more could we ask for?

So I hope you’ll take the time to check out the profiles starting on page 32. Whether you’re actively looking for new partners and solutions, or just hoping to get an idea of what’s out there should you need something in the future, these companies provide a great resource.

And, speaking of looking for new partners and solutions, don’t forget to join our LinkedIn group. This is easily one of the most active and informative groups that I am a part of (and I belong to quite a few!), so if you’re involved with the small shipment industry in any way, joining our group should be at the top of your list. And if you’re already a member, don’t be shy; join in on some of our great discussions.

As we gear up for 2013, we’re always looking at ways to make our content more relevant and informative for you, our reader. So please, if there is something you’d like to see covered in the upcoming year, don’t hesitate to drop me a line at amanda.c@rbpub.com. I’d love to hear from you!

As always, thanks for reading PARCEL.

JULY-AUGUST 2012 | www.PARCELindustry.com

5

GoinG Global with Tom

Stanton

International Shipping Challenges Over the last few months, we have encountered several questions that we think might be of interest to all exporters and importers, including Incoterms and marking issues.

Incoterms: Information on incoterms can be found at a number of places on the Internet, such as http://www.iccwbo.org/ Incoterms/index.html?id=40772. In particular, one of our clients shipping small packages was asked by their vendor to handle all the duties and taxes for the shipments they were making.

In other words, the customer was asking that all shipments would be shipped on a delivered duty paid (“DDP”) basis. The consignee or user of the merchandise did not have local representation in every country where they wanted to receive the merchandise. The consignee only had a project team in the destination country and no local citizen to act as the importer of record. However, some countries require that the importer be a local citizen, so this raised some challenges. Ultimately, the consignee found a local company that would act as importer of record, and they became the party responsible for duties and taxes. But the solution was not inexpensive. In general, DDP or “Free Domicile” shipments are not recommended but rather importation by the consignee who may have approval for tax exemptions that the shipper might not be able to achieve.

Labeling or Marking: A client called us and explained they were exporting a product to Europe for additional processing and reshipment to the United States. When their shipment arrived, it was held because the items did not meet local marking/labeling requirements. We have found this to be a problem both in shipments to Europe and Asia. Whether goods will enter a foreign country temporarily or permanently, we recommend that the exporter send a message to the importer and his customs broker requesting whether any special markings are required in the local language before making any commercial shipment.

In the US Customs regulations (19 CFR 134), the United States requires that goods entering this country be marked with their country of origin in English with the name of the country, such as “China.” The following are some of the exceptions that could exempt a product from being marked before release for US sale: a) Articles that are incapable of being marked;

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b) Articles that cannot be marked prior to shipment to the United States without injury to the product; c) Articles that cannot be marked prior to shipment to the United States except at an expense economically prohibitive of its importation; d) Articles for which the marking of the containers will reasonably indicate the origin of the articles; e) Articles which are crude substances; f) Articles imported for use by the importer and not intended for sale in their imported or any other form; g) Articles to be processed in the United States by the importer in such manner that any mark would necessarily be obliterated, destroyed, or permanently concealed; h) Articles for which the ultimate purchaser must necessarily know the country of origin by reason of the circumstances of their importation even though they are not marked to indicate their origin; i) Articles which were produced more than 20 years prior to their importation into the United States; j) Articles entered or withdrawn from warehouse for immediate exportation or for transportation and exportation.

In the case at hand, the goods were to be processed in Europe and reexported to the United States. So we presented the logic that the importer was the ultimate consignee of the merchandise and it would be processed and reexported so that the marking would not reach the end customer. However, after a month of communication, we have not been able to identify a similar exemption for marking into the European destination country.

Summary/Conclusion: When you are arranging a new transaction with a foreign country, be sure to have expert advisors review the proposed transaction for any technical details that might delay or otherwise compromise your products’ sale and distribution. Discussing your transaction with knowledgeable forwarders and customs brokers at both ends of the transaction before shipment takes place is well worth the time invested. p

Thomas m. sTanTon, international Logistics Analyst, AFMS, LLC can be reached at tom.stanton@afms.com.

TRANSPORTATION ABCs with Thomas

Andersen

One Simple Step You Can Take Today to Prepare for the 2013 General Rate Increase Yes, yes, I know. We have several months to go before UPS, FedEx, and DHL Express apply their general rate increases (GRIs), so why are we talking about this subject now? Well, besides the fact that it’s never too soon to prepare, here are a few reasons to consider.

GRIs are typically implemented the first week of each calendar year. No matter how much we wish otherwise, it is inevitable.

From a historical sense, between increasing tariff rates, minimum charges, and accessorial charges, as well as decreasing dimensional weight factors, most companies have experienced more than a 30% net increase of their shipping spend over the past three years. That translates to more than a 10% average increase per year*. This is more than twice the amount that the carriers actually publish each year. How can you accurately forecast, then?

By having visibility into your operation (and where your money goes), you will be better equipped to have the necessary discussions with the carriers. Here’s how: • Understanding your shipment profile The key to any discussion with the carriers is understanding your shipment history and characteristics. This begins with service level and accessorial charges summaries and trickles down to more detailed information including a breakdown of all costs by shipment. Having the capability to review costs based on your piece-level shipment profile can lead to cost containment that’s 300% to 400% greater than basing the negotiation on averages, such as weight and zone.

during a negotiation with your carrier. Although these services would typically account for a relatively small percentage of the volume, applying the appropriate discounts can lead to several percentage points in savings, as odds are that they are inadvertently being utilized by the carrier to increase your price.

Perhaps most importantly, for ground shipments, in addition to accounting for standard commercial and residential services, one must determine what discounts and minimum charges are being applied to undeliverable packages, third party, returns, freight collect, and other “sub-services.” In reviewing the data, you will quickly identify areas that have not been addressed, and it may require little more than a phone call to your carrier rep to have those areas addressed.

• Identify Areas for Change It’s tough to know what to change when you don’t know where to start. By reviewing your trends, you can identify the source of shipments that are sent by air services to Zones 2-4 (or even Zone 5) where you can consider converting those shipments to ground service. Often, acceptable guaranteed delivery times still apply, but at a much lower cost. The data can also be utilized in more complex ways, such as analyzing the financial impact of shifting distribution points from an existing model to a variety of alternatives. This can help you centralize shipment distribution to more effectively manage costs and controls.

• Identify Unnecessary Charges I once worked with an organization that had more than $100k of unnecessary late payment fees on their annual bill. Even more amazing than the amount of charges, was the amount of time they had let the situation go on. Don’t let that happen to you.

• Review Your Parcel Agreements Simply put, you should verify that the anticipated revenue qualifiers are being met and that all services are addressed.

You may experience a 20% increase in cost, or more, as a result of meeting a lower revenue qualifier and/or utilizing services that don’t have discounts applied. p

Take a few moments and discover where you might be susceptible to these charges. Some of the common ones include late payment fees, address correction charges, oversized fees, and additional handling charges, as well as charges for unexpected services. You’ll identify services that are currently not discounted like Second Day A.M., International Import, and Air Hundredweight services. Surprisingly, these are often ignored

ThomAs Anderson, MBA, is the Director of Logistics & Supply Chain Services for Logica and an industry leading expert in identifying and negotiating smallparcel cost savings. Logica is a three-time member of the Inc 5000 list as one of America’s fastest growing companies and has been honored numerous times for its commitment to innovative cost saving solutions. For more information, contact Thomas at tandersen@logica.net or 800.930.8543 x 726.

* Based on shipping trends of more than 350 Global, National, and Middle Market companies that base their shipping in the US.

july-august 2012 | www.PARCELindustry.com

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Supply Chain Pivot with Rob

Shirley

Innovation Quality is well-known as being highly effective with ISO 9001; AT&T and the United Way have both used the solution to the world’s ecology is also being improved rapidly with ISO produce brochures given to customers at marquis events like 14001 boasting over 230,000 corporate members in 159 the AT&T Pebble Beach National ProAm. countries. The International Organization for Standards has “Reuse, Reduce and Recycle are the best methods of natuitself grown through success to become a major business and rally managing product packaging and boxes used to protect government influencer. merchandise in the transportation cycle,” Spencer says. “We The supply chain has become a strong advocate for sustain- are an environmentally friendly company, and adding a lowability and carbon offset products. With the world’s popula- cost solution in a powder or liquid format into the paper-mix tion now at seven billion, resources are being consumed at an ensures the limitation of dirty methane and eliminates the ever-expanding rate. This spring is being defined as the warm- hydrogen sulfide odor at the end of the life cycle. This is a est in recorded history for our planet because of greenhouse classic demonstration of the sum being greater than the parts.” gases. Carbon dioxide (CO2) is the most noted contributor to The component products used to make Biolithe are an FDAthe problem, largely caused by our consumption of fossil fuels. approved food additive that is integrated into the composition However, another gas, methane (CH4), might hold an even big- of packaging or adhesives when manufactured. It is truly a crager impact as it relates to global warming. Scientists report dle-to-grave product being added at inception and going to work at the end of the packaging’s usefulness.

Methane holds a 25X impact related to warming.

Global corporations with large consumer footprints spend I recently talked with Spencer Brody, Founder and President of Biolithe, after his firm was awarded a US Patent over $120 billion in packaging each year. Top companies are for their solution that reduces the creation of dirty meth- estimated to spend $60 billion this year on true sustainabilane from packaging while it is decomposing in its final rest- ity; these same companies are avoiding greenwashing (preing place. Methane is the most abundant organic compound tending to solve environmental problems through marketing) on earth, but the kind of methane produced by wood fibers like the plague. There are strong economic incentives to in packaging is called dirty because of the heat trapping true sustainability with a growing group of companies, concontaminants released into the atmosphere during decom- sumers, and governments wholly endorsing innovative soluposition. Biolithe’s patent actually manages natural bacte- tions that are sustainable. At the end of the day, the power ria to eat in a specific way to reduce dirty methane before of brands is reinforced and made more powerful if it is comit becomes a greenhouse gas. Bacteria have been harnessed pletely sustainable.

Controlling bacteria in a way that benefits us all is really previously to help the environment; for instance, at the huge oil spill that occurred in Alaska after the Valdez was quite remarkable. The supply chain should have a balanced ripped open. Spencer and his team have been working on approach that pays respect to the economy and the environthis solution for five years and this article is the first time ment. Our great-grandchildren in a century (2112) are dependit is being discussed on a national/international basis in the ing on us to get this right. p open press.

The Sustainability Packaging Coalition welcomed Biolithe as a new member this spring in Toronto by further endorsing a thesis Rob ShiRley is president of ExpresShip, a strategic partner in the global supply authored at Rutgers University in their microbiology department chain. Contact him at rsxpship@gmail.com. and a validation of Life Cycle Analysis from Yale University. The Sustainability Coalition is all about protecting the environment on a sustainable basis with complete transparency.

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july-august 2012 | www.PARCELindustry.com

Parcel PersPectives with Peter

Starvaski

Economic Optimism and Parcel Shipping I just attended the Internet Retailer show in Chicago. I was an attendee, not an exhibitor, which allowed me the ability to attend presentations and visit some of the key players in this mecca of direct to consumer shipping. Over 8,000 people attended the three-day conference. The mood of the conference was extremely optimistic. While the rest of the world is mired down in economic pessimism, Internet retail sales last November and December were 35.5 billion (according to the research service comScore) up 15% from a year ago. Parcel shipping saw a parallel gain — even more so when you include all of the returns that occurred in January (up 7.7% from a year ago, according to UPS). The global economic pessimism, and the optimism of Internet retailers, was at the heart of one of the keynote presentations I was fortunate enough to attend.

The presentation was by Dr. Fareed Zakaria. He talked about the current global economic woes: China is concerned about slowing down, India is slowing down, the concern of over valuation of currency in Brazil, EU’s concerns about the collapse of its economy and fear that the US can’t pull out of its recession.

However, Dr. Zakaria was optimistic, and he cited three basic reasons for this economic optimism: 1) Peace — When you compare the previous three decades with the current political climate around the globe, this is one of the most stable, global periods in modern times.

No major country is at war with another, and while there are certainly pockets of combat around the globe, some of them horrific, the fact is that the amount of armed conflicts is down 50% from the 90s, 75% from the 80s and 90% from the previous three decades (and even more if you go back to World War II).

2) Economic Convergence — Dr. Fareed stated that in the 1960s, there were only 32 countries that had economic growth greater than three percent; today there are about 100 countries with economic growth greater than three percent, many of them (most) participating in the global economy. Dr. Zakaria discussed the current concerns in Greece and highlighted the fact that their default wasn’t something new, stating: “Greece has defaulted 50% of the time over the last 175 years since it gained independence from the

Ottoman Empire; this is not new. What is new is that for the first time Germany is offering to bail them out…” The point was that the Europeans are coming together economically and that he predicted a stronger cross-EU economy as a result of the current tribulations.

3) Technology — And now I come full circle back to the Internet. Dr. Zakaria again used a history example saying that demonstrations in Egypt were not new; organizers had been protesting for years. They expected to have about 4,000 demonstrators across Egypt, like they have had previously. However, fueled by the Internet, 1.5 million demonstrators participated in this past January’s protests that lead to a complete change of the government, including President Mubarak’s resignation.

The message was clear: Global stability is helping to facilitate a global economy, one in which the Internet is a primary means of communication for commerce. Zakaria said, “The combination of e-commerce innovation and a growing global market spell long term opportunity for online retail,” while direct to consumer shipping currently accounts for approximately 30% of all parcel shipments (based on a January New York Times interview with David G. Ross, an analyst at StifelNicolaus). Those shipments are growing faster than the B to B segment. While we tend to think of the US as the largest e-commerce market (it is according to a new report from the Interactive Media in Retail Group), those statistics are based on an analysis of comparing the US to other countries. If you were to compare US to Europe as a whole, Europe is slightly larger with 10 billion more in sales through 2011 (according to the European Multi-channel and Online Trade Association).

The technology to support this global e-commerce market needs to keep pace. Shipping software, services, and billing all need to be able to run on single platforms to provide finance and operations with visibility, not just of the goods in transit, but of the costs and metrics that foster efficient operations, and happy customers, no matter where they are. p

Peter starvaski is Director, Product Management at Kewill. july-august 2012 | www.PARCELindustry.com

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PACKAGING with Jay

F. Perdue

The Lighter Side of Packaging: Bloopers, Blunders, and Bungles Trade publications like this one are full of great information for the trade to which they cater. Sometimes all that information needs to be put in a box and left on the table for awhile so you can put your feet up and find something to tickle your brain. I like to find humor in my daily grind and so this article will be my take on “The Lighter Side of Packaging.”

Why do shippers put labels such as: “Do Not Throw,” “Do Not Crush,” “Do Not Tumble,” “Do Not Toss,” or “Do Not Mutilate” on boxes? Maybe they think that shipping companies have a special conveyor belt that takes their packages directly to a crushing, tumbling, or mutilating machine — unless of course the package has a label that prohibits it. I think I remember seeing in the Uline catalog pages 962 thru 965….. Mutilating Machines.

The label that I like to see on a box is “Do Not Tip.” Why don’t they just use a “This Side Up” or an orientation arrow label instead? I like to use this one to my advantage when I deliver a box with the “Do Not Tip” label on it. I tell the customer that the label is meant for the pickup driver and that it is perfectly acceptable to tip the delivery driver — as I hold out my hand like a luggage boy at a five star hotel.

Labeling on international packages is fun to read and interpret. Once I bought a pair of scissors and the label on the back of the package read, “Made in China, Keep Out of Children.” That would surely cut down on the emergency visits to the pediatric hospital if we were to keep scissors out of children. Whether we use Google Translate here in the USA or whether someone in another country uses another trusted translator service, there is room for error. There needs to be someone who personally checks the translation who understands both languages fluently. How does one interpret this international shipment which reads, “Do Not Bowdlerize?”

The first thing that comes to my mind when I read that statement is a vision of a bulldozer-blender combo wreaking havoc on a pile of boxes. Webster’s definition of Bowdlerize: to modify by abridging, simplifying, or distorting in style or content.

My guess is that they meant to say,” Do Not Drop” or “Do Not Damage.”

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Proper packaging is half the battle of getting your items to your customers in perfect condition. The other half of the battle is choosing the right shipping method and/or other related services. Take for instance Johnny, who owns a pet wholesale business in California. He agreed to ship six exotic lizards to Bob, who started a pet business in his garage in central Texas.

Johnny packed the lizards in a box with air holes and shipped them overnight. But Johnny made several critical mistakes for this perishable shipment. First of all, there is no morning committed overnight delivery service in Bob’s small town because his town is so far away from a major city. Second, the order was placed in July so the average temperature was in the upper 90s. Third and most deadly, the package was sent C.O.D. As you might imagine, Bob could not come up with the money until the third delivery day to pay the C.O.D. charges. Those poor lizards were in the cargo area of a delivery vehicle for three days with temperatures well above 125°.

Instead of the label reading “Live Lizards” on the side of the box it should have read “Lizard Leather.” Forest Gump’s famous statement comes to mind, “Stupid is, Stupid does.”

If you have humorous things happen to you related to packaging, I would love for you to shoot me an email and tell me all about it. p

JAy F. Perdue is passionate about packaging because he handles other people’s packages all day and every day. He is a driver for UPS for 26 years and is in the top four percent of drivers with 26 years of safe driving. Contact him at jperdue@austin.rr.com.

Supply Chain ManageMent with Sam

Karam

Outsourcing Issues and Solutions

Many us companies have partnered with a manufacturer or a distributor in China since the late 1980s. Many reasons have led to that decision: • Cost of manufacturing • Cost of raw material • Cost of labor • Relative ease in payment methods In 2008, the US imported $337.8 billion of Chinese goods, according the US Department of Commerce. India exported about $21 billion to the US. Trade disputes between the US and the two nations have risen since the beginning of 2012, and according to China’s lead negotiator for a new global climate-protection treaty, Su Wei, potential import fees could prompt trade retaliation.

Outsourcing Issues: Many opportunities are available for sourcing your materials and offshore manufacturing; however, greater chance of risk may also be a factor when sourcing in unfamiliar territories.

Asia has been a great source for offshore manufacturing, but when sourcing for materials or a manufacturing partner, you must be able to evaluate the following: • • • •

Their QC process in place Their current client satisfaction rate The quality of their final product vs. the US-made competition Their delivery time against your plan

Finding a partner in Canada or Mexico will secure many benefits to your business: 1. Providing a faster way of evaluating a partner by a short plane trip or communicating with the US embassy in Mexico or Canada for data on your prospects 2. Reducing your shipping cost for imported or exported goods 3. Increasing your profit margin by reducing or eliminating some duties and taxes 4. Improving delivery time by 90% in most cases 5. Providing an opportunity for reducing order to delivery cycle Sourcing in Canada and Mexico proves to be a critical solution in the supply chain management plan. With heated trade disputes between the largest manufacturing countries, it is great to know that you have a friendly environment to source and partner with.

NAFTA is a hidden opportunity for businesses; we need to take advantage of its benefits while providing prosperity for all three nations. p

SaM KaraM is Branch Manager, purolator international, houston, Texas uSa. he is the author of the people Buy from people Blog at http://sellingtomorrow. blogspot.com. Contact him at skaram@purolator.com or visit www.purolatorinternational.com for information.

Adding to the above issues, one must realize that lengthy transit time in the water, customs, duties, and taxes would reduce your profit margin while struggling to meet deadlines on production and/or clients’ delivery time.

The Solution: The hidden solution to all trade and sourcing issues is the North American Free Trade Agreement (NAFTA). It is a tool to help many US companies manufacture, import and trade with Canada and Mexico.

july-august 2012 | www.PARCELindustry.com

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SHIP RIGHT with Karen

D’Andrea

Delivering the Goods: How to Contain Costs While Keeping the Customer Happy Most retailers are in the final stages of preparation for handling increased costs for your company, but may result in lost sales the increase in orders that comes in the second half of the year. and customers. You may benefit from a shipping management Based on last year’s results and current forecasts, e-commerce solution that easily integrates to your internal company systems sales will continue to grow in the coming years: according to — including order and warehouse management systems — and Forrester Research, e-tail will increase to nine percent of total can manage your inbound shipments. This can be the link that retail sales in 2016, up from seven percent in both 2012 and helps you plan and execute the entire fulfillment cycle.

2011. Customers have come to expect speedy, trackable, reliable Shipping offers have become a strong marketing element of delivery. Are you ready to meet the customer expectations of deliv- retail and e-commerce. At the peak of the last holiday season, ery times and always knowing where their order is at any moment? 100% of the top e-commerce shippers had some type of free shipping offer. Since many customers now use free shipping and/or returns as key criteria for their buying decision, you’ll need to incorporate these offers to remain competitive.

You may offer free shipping with a minimum order value, multiple product orders, or for customers in your membership programs; your shipping solution should be able to incorporate and Are you ready to deliver? Are you ready to meet customer automate these business rules. Whatever offer you promote for expectations of speed, visibility, and the ever-increasing your products, access to multiple carriers and services will propresumption of “free shipping”? vide you with the flexibility and options to remain profitable.

Along with the national parcel carriers, the USPS and regional parcel carriers provide attractive services with fewer and lower If not, now is the time to assess your capabilities. Today’s cost assessorial fees. Accessorial fees such as address correction, transportation technology allows for much of what you have residential surcharges, and fuel surcharges can make up 30% been doing manually — often times in duplication — to be of your shipping expense — and many times is not known until automated. Automating the shipping process from order to you receive your invoice after shipment. With access to a shipdelivery is not just a matter of operational efficiency; it is a ping management solution, you would gain access to all these customer service necessity. Regardless of the size of your carriers and visibility to all the shipment charges upfront prior to organization, a small website e-tailer or a large retail opera- shipment. This is important not only in free shipping offers, but tion managing a multi-channel fulfillment network, you need critical when shipping costs are passed along to the customer.

The sheer volume of orders during the peak season could to contain costs while at the same time being more visible and communicative. That is what will create a long-term, positive, offer a great opportunity for cost saving with optimization techniques. Can you consolidate parcels for an LTL shipand profitable customer experience. ment for a store-to-store shipment, or bundle multiple orders to the same address? Using a shipping management solution Better Cost Management It all starts with planning — your experience in the 2011 hol- can not only help identify these opportunities, but execute iday season is the baseline for your planning for 2012. You the shipment in the most cost-effective way possible. Finally, probably have a good handle on your sales during this time now is the time to enhance your carrier payment process. Are period — but did you experience stockouts or backorders of you currently receiving and paying your invoices electroniyour products? Were there fluctuations in your inventory ship- cally? Do you have an auditing process in place to validate ments from your suppliers that caused you to expedite deliv- the charges from your carriers? With your shipments reaching ery to your customers? Can you easily manage your inbound peak volume, having an automated system that can identify shipments from suppliers to give greater inventory control and billing and service errors can minimize overpayment and sigreduced carrying costs? These situations can not only drive nificantly impact your profitability.

THe Real quesTIon Is:

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Improving the Fulfillment Process In addition to choosing the best carriers and services for your shipments, automating the fulfillment process can reduce costly errors that come from manual entries and multiple data sources.

Using a shipping management solution that is capable of supporting multiple shopping sites can accurately and quickly return the shipment information back to the correct site. The actual fulfillment of orders should be just as easy — automatic imports of orders or scheduled order download times should be available to ensure you can quickly ship. Additionally, access to strong reporting functionality can allow you to achieve operational efficiencies.

Shipment activity and carrier detail reporting can provide details on your operation that can assist in carrier negotiations and identify trends to drive improved future planning, such as increasing warehouse personnel resources during peak periods. Most importantly, a shipping solution needs to be flexible enough to grow with you. The ability to add additional technologies in a dynamic marketplace will mean that you will always be innovating and finding ways to reduce costs while maximizing operational excellence.

Delight Your Customer Never forget you are only as good as the customers’ perception of you — which comes 100% from their user experience.

Cost management and improved efficiencies only matter if, in the end, your customer is satisfied. The right shipping management solution can have a significant impact on your customers’ long-term relationships with you. Multi-channel ordering, as well as fulfillment options, provides the customer with the flexibility to meet their specific needs. For retailers that have brick and mortar stores as well as e-commerce sites, offering the customer the option for parcel pickup at the store or having it shipped to their home is becoming more prevalent. There are shipping management solutions that can provide the ability to manage these shipping preferences as well as provide key tracking information for your customers and improve customer service, whether it is through self tracking on the web or through a call to a customer service representative.

Take the time now to ask yourself these questions. Assess where you are to ensure that, as the season picks up, you are ready. p

Karen D’anDrea is Director, Marketing for Pitney Bowes’s Distribution Solutions (PBDS). Distribution Solutions include Pitney Bowes’ complete line of inbound tracking and global logistics management solutions. She can be reached at karen.dandrea@pb.com

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ALOHA!

By Kevin Unbedacht

LEARNING TO SURF THE PARCEL WAY Tips for shipping packages outside the continental US 14

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B

reaking into the offshore shipping market is like facing a 20-foot swell without a flotation device.

The venture may leave your business gasping and nursing its bruises on the rocky beach. However, with the right tools and skills, it is possible to surf that wave, just like it is possible to break into the offshore shipping market successfully.

THE SURF: THE HARD FACTS There are over 6.3 million people (2010 Census) currently residing outside the continental United States in Alaska, Hawaii, and US territories, such as Puerto Rico, Guam, and the Virgin Islands. These potential customers of yours have the same needs and wants of every American consumer, yet they are often charged significantly larger amounts to ship goods to their remote addresses.

The customers who live in these areas represent a smaller percentage of overall sales for most companies, but these sales also represent the largest percentage of shipping cost per parcel in the United States. The cost of shipping parcels to these customers is so great that some companies either charge extra fees or opt out of servicing these difficult to reach locations.

YOUR LONGBOARD: CREATING OPPORTUNITIES FROM CHALLENGES Shipping to areas like Anchorage, Waikiki, or San Juan is not exactly a piece of cake. These types of locations tend to have challenges around keeping low transit times and rates. Some carriers consistently impose accessorial charges on companies for delivering to these locations, and the extra charges are often passed on to their customers. Despite the extra cost, ground transit times continue to be longer than desired. It’s a frustrating situation for all involved.

One of the keys to understanding how to best service current or potential customers in these areas is to acknowledge all challenges as opportunities. This mindset can become a creative tool in pursuing offshore shipping. As Brian Adams mentioned in his book, How to Succeed, “Difficulties are opportunities to better things. They are stepping stones to greater experience.” Breaking into the offshore shipping market could actually be what Adams called a “stepping [stone]” to growing and diversifying your company.

Being able to create opportunities from challenges is critical to ensure success in offshore shipping. By doing so, you are creating the longboard you need to surf that 20-foot wave. Nonetheless, without the necessary knowledge and skill in surfing, the waves may still end up smashing your business onto the shore.

WAX YOUR BOARD: COMBATING THE ASTERISK SYNDROME The six million people who live offshore often experience the Asterisk Syndrome, where the fine print essentially says, “Where you live is going to cost you more” or “Sorry, but we don’t ship to your address.” This shipping exception is usually

denoted by an asterisk at the bottom of the checkout page or is written under the delivery location address field. The challenge with the asterisk is two-fold.

1.

Offshore locations have fewer physical stores and so customers frequently purchase products from online. For instance, Walmart has seemed to crop up all over the US within the last 20 years. You can find these stores in any state.

However, you’ll notice that on offshore locations, there are not as many Walmart stores when compared to onshore locations with similar populations and areas. As an example, we decided to compare Hawaii (offshore) and New Hampshire (onshore) because the states have almost equivalent populations and areas. We realize that New Hampshire in all actuality contains fewer people and less land than Hawaii, but this will only serve to further our point. (www.walmartstores.com/pressroom/ StatebyState/State.aspx?st=AK).

FOR EXAMPLE:

Hawaii

Population: 1,366,862 (2010 Census) square Miles: 10,931 Number of Walmart locations: 10 People per Walmart: 136,686 Walmarts per square Mile: .000915

New Hampshire

Population: 1,321,445 (2010 Census) square Miles: 9,350 Number of Walmart locations: 32 People per Walmart: 41,295 Walmarts per square Mile: .00342

As you can see from this comparison, New Hampshire, the onshore state, has 320% more physical Walmart locations than Hawaii, even though Hawaii has about 1,500 more square miles than New Hampshire. At the same time, each Hawaii Walmart store possibly serves about 330% more people than New Hampshire stores. With that in mind, it’s not hard to see why a customer in Hawaii would prefer to shop online rather than throw elbows at the local Walmart.

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The lack of physical stores in Hawaii, Alaska, and US territories provides a great opportunity for all Internet businesses with e-commerce capabilities, such as Amazon, Zappos, and QVC. These are just a few businesses that have chosen to implement an offshore shipping model. By doing so, they fulfill consumer wants that cannot be satisfied through the available physical stores. Remote customers are able to purchase products that are only available online and conveniently shop from the comfort of their homes. It’s easy to understand why these types of e-commerce companies have quickly gained loyal clientele offshore.

2.

So many e-commerce companies are still in the midst of Asterisk Syndrome. They either won’t ship or only ship selected items to Alaska, Hawaii, Puerto Rico, and other US territories (for an added charge). Their challenge is obvious: the extra expense that shipping offshore requires does not fit into their current model. By combating the Asterisk Syndrome and choosing to sell goods to the six million customers offshore, these companies might be able to increase their volume significantly. They could apply wax to their longboard for a smoother ride into offshore parcel shipping.

CRoss-tRain: BalanCing Cost vs. speed Balancing cost versus speed is a lot like cross-training. In cross-training, you focus on more than one type of fitness exercise (running, calisthenics, surfing, basketball, etc) in order to fully excel in your chosen sport. Like cross-training, working actively to increase the transit times and lower the cost of parcels is a great way to help your company succeed at breaking into the offshore market.

At this time, there are some businesses in the United States that decided to pull money needed to cover shipping costs from their customers’ wallets. In the shipping world this is called a fuel surcharge. In other words, shipping is being paid for by the customers in some form or other.

Consumers living in distant locations deal with slow product deliveries at high cost to them all of the time. Their receipts carry a long list of surcharges before ending in a grand total. These include expenses for fuel, residential deliveries, and remote locations. To give an idea of how exorbitant these surcharges can be for these offshore locations, to deliver to Alaska, a resident must pay a remote surcharge upwards of $15 per package. This makes it challenging to gain additional offshore e-commerce business. It doesn’t help that major integrated carriers own their own line haul and air. Often these vehicles and aircrafts aren’t even close to being full of packages. Nevertheless, somebody has to cover these costs, and that somebody usually ends up being the customer.

In comparison to integrated carriers, regional carriers provide an “Already Going There Network.” They make use of extra space in vehicles that are already going to the same destination, allowing the carrier to drive down cost and eliminate any

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surcharges. Sometimes they can make partnerships with final mile delivery services, such as USPS, lowering the cost even more. Because these partnerships occur within the regional area, ground transit times are often quicker than those of integrated carriers, which will take an average of seven to nine business days to deliver the parcel to the customer. On the other hand, regional carriers can reduce the transit time to three to five days.

CatCh a Wave: Choosing the Right shipping Model When it comes to ground service, regional carriers are more capable of delivering packages less expensively and faster than integrated carriers. Through their Already Going There networks, they are better able to match the desired e-commerce transit times than integrated carriers. At a two to three day pace, integrated carriers can be a little quicker, but their prices are significantly higher.

In choosing the right shipping model, you are essentially trying to discover which wave to catch. You want to know which wave will take your business the farthest with the best results.

If you choose a shipping model that allows you to deliver to offshore locations with decreased transit times and costs, then you are even closer to achieving your goal of breaking into the offshore parcel shipping market.

and You’Re suRfing!

Whether you’re shipping offshore now or just thinking about it, you can use these tools and skills to break into the offshore shipping market successfully. In other words, you’re ready to hang ten! You’ve learned how to use your longboard to create awesome opportunities; you have chosen to combat the asterisk and give your board a nice slather of wax; you have cross-trained like no other and balanced your cost versus transit time. Now you’re ready to catch a wave and surf the swells to pursuing offshore parcel shipping. Mahalo!

Kevin Unbedacht is President of International Bridge (DBA www.ParcelPool. com.) He has helped the company succeed in providing excellent shipping service to Alaska, Hawaii, Puerto Rico, US territories, APO/FPOs. Kevin can be contacted at Kevin.Unbedacht@MyIB.com. You can also visit International Bridge’s website at www.MyIB.com.

Gaining a Co

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omplete View of Your Transportation Spend

HigH Volume, Small Package SHiPPerS

It’s not enough to focus on only one aspect of your transportation budget; here’s how to get a full picture.

By Paul Jennings

Parcel shippers with high package volumes tend to focus inwardly, primarily on optimizing the pick, pack, and ship process. Resources are focused on systems to manage the inventory, match customer orders for fulfillment, automation in the warehouse to facilitate the throughput of the process and manifesting systems to interact with the parcel carriers. In many cases, delivery requirements are time definite, and shipping times are short. Expectations have been communicated to the customer, and delivery commitments have been made. When shipping to a consumer, the requested delivery service has been paid for in advance and cannot be changed. Shippers sending packages through the supply chain are frequently in a just-in-time-mode, or in situations where demand forecasts have been understated, where the requested delivery date must be honored.

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For these situations, reducing freight spend is focused on improving the selection process for parcel carriers and their offered services to meet the delivery requirements. Shippers who have contracts with multiple parcel carriers, or even using only a single carrier, need to be able to select the carrier with the lowest cost and the best delivery service. This involves utilizing parcel rating systems designed to evaluate and select within those contracts.

Direct ship programs, where orders are shipped straight from the vendor, is another approach used by shippers to reduce their transportation costs. Rather than shipping the product inbound from the vendor, and then paying again to ship the product outbound to the end customer, product is shipped directly from the vendor to the customer. Managing the complexities of a direct ship program requires the appropriate technology, namely the ability to maintain EDI trading partnerships with vendors in the supply chain.

Another way to reduce cost on the outbound shipment is to employ the services of bulk consolidators. While this choice is not feasible in all shipping scenarios, there are many types of products shipped as parcel, which have a great deal of leeway in the delivery time. Even with the level of technology integration available today, many products are still advertised with a delivery window two weeks wide. One example is a direct marketer advertising four to six week delivery times. This two week window provides opportunities to group those shipments and send them with a more economical carrier and service.

Freight OptimizatiOn Many small package shippers grow accustomed to working with a single type of transportation, which is parcel. While parcel packages may travel by truck, air, or rail, there is a single interface from the shipper to the carrier. All packages leave the shipper’s facilities in one or more trailers. For consumer-based shipping, this is almost always the least costly way to deliver packages. When the objective is to service the supply side of a retail operation, additional cost savings can be realized by utilizing other types of transportation.

Freight optimization is simply a means of consolidating individual packages to get the desired service at the best rate, regardless of who the carrier may be. Packages, or freight, with the same pick-up and delivery dates are grouped together to increase the total weight and therefore get a better rate. While parcel might be the most cost-effective way to get products to a consumer, there are opportunities to reduce freight costs for shippers supplying stores or distribution centers. Sending a collection of individually labeled packages on one or more pallets, using standard ground service delivery times, will most often be more economical when optimizing to use a less-than-truckload (LTL) carrier. The rate will most certainly be cheaper, and even when considering the additional handling costs and floor space for managing pallets, in most cases it will still be worthwhile.

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Most shippers use parcel carriers for obvious reasons, such as the weight of the product being so low there is no better way to ship. If there is some flexibility in delivery dates, and the product has some weight, the opportunity to consolidate outbound packages increases. Major retailers with announced street dates are also candidates for experiencing a higher rate of freight optimization. While the rate for consolidation may be low, large retail shippers can easily experience between five and 10% of packages being optimized to LTL without changing their current process.

Obviously, there must be enough packages going to the same destination with the same delivery date requirements to be able to consolidate. For outbound parcel shipping to consumers, the likelihood of being able to consolidate is almost non-existent. On the other hand, when shipping to stores and distribution centers, the situation is different. Rather than shipping as soon as the product is available, orders can be grouped and staged to ship on a different interval, say once per week. In other words, the rate of consolidation increases based on planning, product mix, and availability.

LtL: a ViabLe OptiOn Depending on the parcel carrier contracts for a shipper, LTL can be a very viable option at a surprisingly low weight threshold. The primary parcel carriers both offer hundredweight, or multi-weight, pricing for parcel shipments. These rates are for contracted customers and are tier-based depending on volume.

As is the case with LTL shipments, there are required minimum charges that must be met.

Using 2012 standard list rates for a Tier 1 shipper as compared to a typical LTL rate shows that at around 270 pounds of billable shipment weight, LTL becomes a better choice. Typical minimum floor charges for LTL shippers is around $65 for distances of up to 500 miles and $80 for more than 500 miles.

The information in Table 1 shows comparisons based on a total billable weight of 275 pounds. For the purpose of this comparison, there were 11 packages in the shipment. The weight distribution was three packages at 15 pounds, five packages at 20 pounds, one package at 30 pounds, and two packages at 50 pounds. The package distribution was used to calculate the cost for shipping the packages individually, and for determining package-level minimums for hundredweight service. Of course, this comparison is based on standard list pricing, and high-volume shippers usually try to negotiate aggressive discounts on their carrier rates. Even with good discounts on parcel rates, at the right weight levels, LTL is a better economic alternative.

There are advantages for shipping packages with a parcel carrier. One significant advantage is that they have service to just about every possible destination. Secondly, there are fewer carriers to work with. For LTL, there are national carriers servicing commercial addresses throughout the 48 states in the

Table 1

Zone 2

Zone 3

Zone 4

Zone 5

Zone 6

Zone 7

Zone 8

Ground - Single Package

109.58

125.60

135.91

158.49

195.80

233.18

266.27

Ground - Hundredweight

65.31

81.54

88.83

103.95

130.35

150.43

175.31

LTL Min Floor

65.00

65.00

65.00

65.00

80.00

80.00

80.00

continental US. In order to get the best rates for a given service, regional, and sometimes local, carriers should be considered. Increasing the carrier mix increases complexity because there are more relationships to manage. Many parcel shippers have good technical integration with the parcel carriers for manifesting, tracking, and paying carrier invoices. Moving into an LTL world introduces the requirement to support multiple trading partner relationships — one for each carrier.

The bottom line for freight optimization is that improvement will not change shippers from parcel to LTL as their preferred carrier. With that said, there are many examples where incorporating LTL as another way of shipping is a choice that can reduce the overall transportation spend. Realizing a savings of 50% on five to 10% of inbound and outbound shipments while adding minimal costs and having a low operational impact can make a meaningful result on the financials for a shipper.

Consolidation for outbound Zone-skipping is the process of consolidating individual packages going to different destinations, and shipping them to a parcel carrier facility where they are then shipped to the final destination. An example of this is consolidating enough parcel packages with a destination of a parcel carrier facility where the packages can be dropped into the delivery stream and shipped to the customer at the lowest rate. This technique requires that the delivery window allows enough time to accommodate an additional route from the shipper to the parcel shipping facility. For instance, if normal parcel ground delivery time from the shipper to the end customer is five days, the delivery time to include zone-skipping must also fit that five day window.

Individual packages are picked and packed as usual, including generating the parcel carriers shipping label. Packages are grouped based on density of customer orders for a given parcel zone. Optimization algorithms are used to determine the best carrier facility as a destination. Instead of putting the packages in the parcel carrier’s trailers, they are placed in the trailer for the selected carrier servicing the initial outbound leg.

The payback is realized in an overall lower freight cost, while still meeting the delivery requirements. The cost for shipping an individual package would include the final delivery leg from the parcel carrier, plus an allocated portion of the freight charges. The ability to incorporate the parcel carrier’s hub into a shipper’s logistics network is almost like having facilities located in key areas of the country based on the distribution of your customer base.

While this method of shipping is not for every shipper, it works best for high-volume parcel shippers with a concentrated distribution of customer endpoints. With minimal investments in infrastructure, in terms of floor space and materials handling, the technique can be used as needed by the business. Seasonal shippers with high peak volumes can also take advantage of the cost savings afforded by consolidating shipments and using freight optimization techniques.

Parcel carriers even use this service for their own business.

For instance, FedEx offers a delivery service called SmartPost that utilizes FedEx facilities up to the final leg, where the packages are delivered to a US Postal Service bulk facility.

Shippers receive a very low package price, while still getting many of the same features offered to all FedEx customers. One good application for this service is a retailer using it for returns and repairs. This works very well for small replacement parts because pricing can be done on a per ounce basis, rather than starting at one pound.

ConClusion To optimize freight spend, you have to look at all aspects of the retail chain, including the supply side. Taking advantage of other types of transportation, such as less-than-truckload, full truck, or even intermodal, is an effective way to reduce cost without sacrificing service. There are effective tools and services available in the marketplace to make the selection and optimization process a realizable goal. Some of the required technology, such as EDI, is quite likely already part of a highvolume shipper’s toolbox. There are service providers who can assist in managing the carrier relationships for the other types of transportation. These services reduce the burden on the shipper to be able to maintain relationships with enough carriers to ensure the best pricing and service. In order to squeeze the last few dollars out of transportation spend, shippers need to expand their horizons — and increase their choices.

Paul Jennings, Vice President, Application Development, Transplace has more than 25 years of experience in the parcel industry in both business-toconsumer and business-to-business. At Transplace, he leads the team that defines, designs, builds and maintains mission-critical high-availability proprietary enterprise business applications for customers.

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Saving M

and ResouRces by emphasizing pac This case study shows how an intensive multi-year investigation led National Instruments to discover new ways to not only reduce their packaging costs, but also their ecological footprint.

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Business Environment National Instruments (NI) produces hardware and software for test, control, and embedded design applications. NI products range from basic low-cost data acquisition devices to multiplatform, custom hardware/software systems that can cost thousands of dollars. Designing and testing increasingly complex products to meet tight time-to-market demands requires a highly efficient, tightly integrated platform. The NI graphical system design platform for test, control, and embedded design spans the entire product design cycle, dramatically increasing efficiency and improving the bottom line.

NI complements its industry-leading software and hardware with an extensive collection of services and support solutions from the planning and development phases through deployment and ongoing maintenance.

Money kaging efficiency

Headquartered in Austin, Texas, NI has more than 40 branch offices all over the world, including the Americas, Europe, Asia Pacific, Europe, Africa and the Middle East. We have sales offices in the US and sales offices and distributors in key international markets. Sales outside of the US accounted for approximately 62% of our revenue in 2010. We expect that a significant portion of our total revenues will continue to be derived from international sales.

NI customers are mainly engineers and researchers, but we have a broad customer base including more than 30,000 customers, and no customer accounted for more than four percent of our sales in 2010. The types of companies we sell to range from business-to-business organizations to universities and research companies to consumer-facing companies such as Microsoft. Our customers expect high-quality products that work out of the box, as well as significant customer support for everything from minor issues to help setting up large, multiplatform systems.

Because NI has such a diverse portfolio, competition varies greatly from market to market. However, the markets in which we operate are characterized by intense competition from

numerous competitors, some of which are divisions of large corporations having far greater resources than we have. The NI supply chain is of fairly average size.

Problem Statement In 2007, we centralized 95% of our global distribution network in our manufacturing facility in Hungary; thus, approximately 70% of our shipments became international parcels.

One of the major concerns with international parcels is the cost, and although we had some very good negotiated rates in place, we realized we had to be more cognitive than ever before about our packaging efficiency.

Shipping cost has become one of the largest expenses NI incurs, and dimensional weight accounts for a large portion of shipping costs for both inbound raw materials and outbound finished goods. At this time, we were spending more than $1 million/ year on dimensional weight charges. As you know, shipping costs are calculated by weight, size, speed and distance. Over the last five years, to encourage space optimization and subsidize for large light shipments, parcel carriers have implemented and tweaked dimensional weight factors and formulas more than ever. These changes have resulted in massive revenue increases for carriers which, if unmanaged by shippers, result in major cost increases.

This corrective behavior strategy results in a win/win situation for parcel carriers by helping them to increase their revenue and/or free up space by encouraging shippers to reduce the size of their shipments. For example, a recent article from Logistics Management magazine showed an example where the 2011 tweaking of dimensional weight factors resulted in an 18.7% rate increase instead of the advertised 5.6% rate increase.

Parcel carriers rarely bring attention to changes in accessorial fees and usually focus on the shipping charges alone.

Actual Weight VS Dimensional Weight

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Shipped Materials Reduction

NI shipping profile matches well with what parcel carriers look for in parcel characteristics. Our packages weigh around seven to 10 lbs. each and are The software kit box includes high in value with a low claims ratio, One software kit. two boxes, but is half empty. typically shipping directly to high-tech areas with a high delivery density and typically ship via international air.

Additionally, NI releases hundreds of new products annually. As a result, the NI product mix consists of highmix, low-run parts. From a packaging design perspective, this presents a challenge.

When you sell thousands of different parts, you cannot create a custom box and solution for each part, especially when you may sell only Consolidationg documents into a few of these parts each year. As These boxes contain software a DVD would free up space and a result, parts are not always cusenvelopes and reading material reduce dimesional weight. tom-fitted to their packages, but are always well-protected. This combination can quickly lead to packaging density inefficiencies.

In addition, with the many redesigns of individual part numbers, the bill of materials (BOMs) often change, getting smaller in size through technological innovation.

With a constant rush to get the new and redesigned product to market, packaging efficiency was frequently Our global logistics manager, Dean Arnold, along with an afterthought for engineers.

The logistics group met with the packaging engineering the NI packaging engineering team, performed an extensive analysis of the packaging NI was using, particularly focus- group and tried to tackle the problem of making packaging ing on package size and shipping costs. He saw an oppor- important to our design engineers. NI products are not sold tunity to improve efficiencies in these areas by reducing in storefronts; our customers purchase our parts because of the dimensional weight of many NI packages. Many pack- our technology, not because of packaging aesthetics. The ages we shipped were simply far too large for their contents. engineers’ packaging goals were to maintain a quick timeto-market and high packaging protection quality over packBelow is an example.

This cost NI unnecessary money and wasted precious space aging efficiency. in storage facilities. Additionally, because of some filler material used in empty package space, reducing dimensional weight Applied Solution and could have a positive environmental impact. Arnold spear- Results Achieved headed a multiyear effort (from late 2007-2010) to resolve We took a common-sense approach to tackling this issue. these problems, saving the company money and reducing our In 2008, an all-volunteer internal organization called the environmental impact.

Green Team formed, with the goal of helping reduce the ecological footprint of NI and its employees. The logisChallenges tics and packaging engineering group saw the green moveInternational parcel rates are among the highest delivery ment as a great avenue to push not only the importance of costs in the industry today, only eclipsed by same-day delivery packaging efficiency, but also the importance of shipped charges. Factors that influence international delivery pricing product document reduction. The Green Team eagerly took include package density, weight, destination country, destina- on these causes and helped raise awareness for increased tion addresses, and customs clearance costs. In general, the packaging efficiencies.

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Several stakeholders became involved at this point. In addition to the packaging and logistics team, stakeholders included Green Team members, the Vice-President of Software Development, the hardware R&D directors, the Vice-President of Manufacturing, the supply chain director, technical writers, and the software and literature procurement team. They raised awareness of the issue using videos, the company intranet site, and through the annual citizenship report.

We focused on documentation reduction and packaging efficiency, and began by conducting both internal and external research. We believed the best place to start to address the known issues was to physically audit our top 200 highest sellers and our top 100 dimensional weight “offenders” which, in some cases, overlapped. To identify packaging inefficiencies, we used use IATA’s international dimensional weight factor of 166 (inches) to identify our low-density packages.

We formed an audit team composed of members from NI logistics, packaging engineering, kitting, and industrial engineering groups. The audit findings confirmed our suspicions.

Some of the changes could be made relatively quickly, while others required packaging redesign and testing as well as approval and help from a number of other groups such as the technical writers group. With this knowledge we were able to start making changes, but with more than 6,000 existing parts, and hundreds of new parts being released a year, we knew there was a long road ahead.

In late 2008, the global recession hit and NI began to look for more areas in which to cut costs. Dimensional weight and material savings from the packaging efficiency efforts naturally dovetailed with these efforts. Because of the education efforts from earlier in the year, dimensional weight was no longer a foreign term to engineers and they now understood the importance of packaging efficiencies.

Many of our engineers championed packaging changes more than ever, proactively pushing packaging efficiencies and document reduction. From late 2008 through 2010, they undertook many projects to increase packaging efficiency, including the following:

 Switching to suspension packaging for several eligible products. Suspension packaging uses air instead of foam to cushion products, which reduces the amount of material used in the package. This new packaging contains at least 30% recycled content and is recyclable in corrugated hydrapulping operations. Also, it is reusable for return shipments, which minimizes waste at both ends of the distribution cycle. This change reduced the amount of foam used by five percent (87 m3) per year and resulted in a 47% reduction of box size for these products.

 Redesigning the packaging for a fragile NI hardware product, reducing the physical size of that product’s packaging by 59%.

 Developing a new method for shipping NI software by replacing the industry-standard software carton with an envelope mailer. In addition, we worked to reduce the amount of printed materials shipped with software in 2009 and condensed multiple CDs into one DVD. Through these efforts, we reduced the physical size of software packaging by 71%.

 Advancing the efforts to more quickly move to a Webbased format for manuals

 Creating custom packaging for a particularly high dimensional weight product instead of one-size-fits-all packaging, which had the following effects:  Increased average shelf capacity by 88%  saved $27,533 on materials per year  Freed up 264 storage shelves, making room for

196,504 boxes

 Redesigning packaging for a popular product, which had the following effects:    

23% decrease in corrugation used 59% decrease in polyurethane foam used 43% reduction in cubic volume $423,000 in expected annual savings

Having addressed the major dimensional weight offenders and high runners, in 2010 we decided that needed a way to further determine areas where we could increase efficiency. We formed a Kaizen team within the kitting teams at the NI global manufacturing site in Hungary. The purpose of the team was to educate kitters on dimensional weight and ask them for their help in improving packaging efficiencies. We provided a clear communication channel (an online database) where they could log their ideas, which our packaging engineers then assessed prior to making any changes.

The team was a success and accounted for more than $260k in dimensional weight and material cost savings in 2010 alone.

In addition, it was understood this team was part of a continuous improvement effort because packaging efficiency should be an ongoing concern.

In addition to the kitting education project, we trained and audited shippers on their packaging efficiencies because they are the final group to package orders before pickup. We reviewed the data we gathered from the audits and within a few weeks began to see very positive results, such as going from a 10% shipping failure rate on shipping efficiency audits to zero failures within a few months.

Another good idea came from a member of our logistics group in Hungary who quickly realized the importance of using dimensional weight neutral packaging such as carrier-provided packs on our smaller shipments. Using carrier-provided packaging not only reduced material costs, but it provided a key avenue to

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avoid dimensional weight charges.

This graph shows our packaging efficiency gains where dimensional weight is measured as a percentage of our billed weight for our largest shipping lane: As dimensional weight accessorial charges continue to rapidly increase, we have made a concerted effort to not only reduce our dimensional weight costs through efficient packaging, but to also understand the how dimensional weight factors affect our costs. By understanding how it directly impacts our cost and how the carriers are quickly changing factors, we are able to negotiate these factors wherever possible. This chart chronicles the metric dimensional weight factors on some of our major carriers over the last 10 years.

Although we have made major progress and seen great success in our efforts to reduce dimensional weight, the biggest lesson has been realizing that this must be a continuous improvement effort. When it comes to a static environment such as product packaging, we must continue to look for ways to get smarter and better. For instance, we are currently taking a hard look at suppliers’ incoming raw material packaging because this also affects our supply chain.

Ultimately, we achieved great success with our packaging and design enhancements. We saved money and precious resources, and raised awareness of an issue that not many people in the company knew about. Our focus on increasing packaging efficiencies remains and with the number of new products NI develops coupled with rapidly changing dimensional weight factors, we expect there to be many new opportunities to save money and resources in this area.

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Dimensional Weight Percentage

Changes by Year

Freight and Material Savings Resulting from Dimensional Weight Reduction Projects

Before and After Software Packaging Redesign

Polyurethane Foam VS Suspension Packaging

• Replaced carton with SBS mailer • Reduction of literature shipped • Condensed multiple CDs to one DVD

• 71% decrease in volume of shipping kit • 100% recyclable packaging

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Optimiz Cross-Channel Using CloUd-based TeChnologies you are not in the shipping software business, why are you spending so much time, energy, and money on managing, updating, and deploying shipping software?

Cloud-based shipping systems deliver all the power of server-based systems at a fraction of the cost and can be deployed in days instead of months. The software provider, who IS in the software business, continually updates the software so you have instant access to the latest innovations — leaving you to focus on your core business. Let’s look at an example: It’s 2am and somewhere in the world, your customer has just ordered a product from your website. What is the most efficient method of delivering their order to them?

The order might include products warehoused in different locations: multiple distribution centers, store locations, or even with a vendor or third party drop shipper. There might be multiple carriers or services that could reach the customer in the fastest or best manner. Past orders or customer preferences might influence the selection of the right carrier or service. Or even the contents of the shipment (high value, perishable, hazardous) might be factors.

Cloud-based technologies are being deployed in many of the leading retailers in the United States to address these issues: to optimize shipping with the end result of dramatically lowered costs, increased efficiency, accuracy, and service in delivering shipments to their customers.

What are some of the factors that lead to the choice of a cloud-based shipping solution?

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1) Ease and cost of deployment 2) Visibility across the supply chain 3) Multiple distribution points 4) Optimizing the selection of service 5) Modeling and learning rules based on past shipping behaviors Ease and Cost of Deployment. Typical cloud-based solutions are web browser-based, accessible from devices including PCs, tablets, and smartphones. Standard deployment of a solution typically takes less than 30 minutes with very low deployment costs. The solutions create optimized labels, reads weight from attached scales, prints to thermal label printers, or integrates with warehouse or order management systems.

By comparison, a typical enterprise shipping solution starts at $50,000 in license fees, $200,000 in customization, and a two to three month deployment timeframe — less the ongoing cost of maintaining the software and servers on premise.

Visibility across the supply Chain. Whether you’re shipping from warehouse to a consumer, warehouse to a store, store to store, store to consumer, or from a supplier to any of those points, a cloud-based solution can provide immediate visibility into all shipments. From the time of order completion through picking/packing, carrier pickup, and eventual delivery, the entire process can be mapped out and accessed from any device, anytime, anywhere.

Multiple Distribution Points. As is true in real estate, so it is in shipping: location, location, location. The strategic advantage of being able to distribute products from multiple locations is a key realization of those who are the best at cross-channel shipping.

zing shipping Retailers such as REI, Nordstrom, Zumiez, and lululemon athletica are continuously seeking distribution point optimization.

By strategically locating distribution centers in multiple parts of the country or the world, cheaper carriers and shipping services can reduce time-in-transit, leading to increased customer delight and lowered costs.

Optimizing selection of Carrier and service. Many retailers have learned that it’s sometimes unnecessary to send a shipment 2nd day air when the sender and recipient are less than 200 miles apart.

Switching from premium air to ground services can save up to 70% of the shipping costs and still get the shipment to the destination in less or equivalent time. By building and leveraging business rules that can map the distance of a delivery, the smart retailer can benefit themselves and their customers. And last mile delivery options where a postal service can deliver the last mile provide an even more cost-effective delivery solution. Cloud-based solutions can seamlessly communicate with multiple parcel and freight shipment

By Keith A. McCall

options without having to establish expensive client-server communications between the customer site and the carrier sites.

Modeling Business Rules Based on Past shipping Behaviors.

Cloud-based shipping solutions can retain and analyze data about past shipments, then leverage this data on the fly to determine optimization opportunities. The most current data about delivery areas where certain carriers will charge delivery area surcharges can factor into the selection of carrier and service — and as these charges can change without warning, by monitoring surcharge history, the cost and control of shipments can be optimized.

By carefully considering these opportunities presented by cloud-based technologies, today’s smartest retailers are innovating and competing more effectively and strategically while reducing costs and improving customer satisfaction.

Keith A. MccAll is CTO & Founder, Enroute Systems Corporation.

july-august 2012 | www.PARCELindustry.com

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PARCEL COUNSEl with Brent

Wm. Primus, J.D.

Airbills, Pricing Agreements, or Contracts: What’s the Difference?

In this installment of PARCEL Counsel, we will take a look at the basic legal relationship between a shipper and a carrier.

Generally speaking, the relationship is defined by one of three categories of documents — an airbill or trucker’s bill of lading, a pricing agreement, or an individually negotiated contract.

Although bearing different labels, all three of these documents are legal contracts.

Black’s Law Dictionary defines a contract as: “A deliberate engagement between competent parties, upon a legal consideration, to do, or abstain from doing, some act.” Looking first to Bills of Lading, the contract is entered into by the shipper tendering the cargo to the carrier, which the carrier agrees to transport to destination pursuant to the carrier’s terms and conditions. This concept is expressed in the current FedEx US Airbill as follows: “By using this Airbill you agree to the service conditions on the back of this Airbill and in the current FedEx Service Guide, including terms that limit our liability.” In this agreement all of the terms — pricing and rates, limits of liability for damage claims, categorizing of various service offerings, etc., etc. — are 100% established by the carrier.

Although a carrier’s standard terms are not inherently evil, being created by the carrier, they are naturally written in favor of the carrier. Accordingly, shippers with larger volumes of traffic will try to negotiate terms that they believe to be more favorable to themselves than those established by the carrier. For most shippers, the primary objective is to obtain lower rates than the carrier’s standard published rates.

When the only issue is pricing, the parties consummate their negotiations in a document that is often titled or referred to as a Pricing Agreement. The essence of such an agreement — which often may only be a page or two in length — is to document the rate negotiations. However, the Pricing Agreements almost always contain a clause to the effect that other than the matters set forth in the Pricing Agreement, all of the carrier’s other standard terms will apply.

Shippers with larger volumes of traffic will often try to negotiate variations and terms other than just pricing. Such negotiations can become quite complicated. Examples of topics

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which might be on the table for such negotiation include, but are certainly not limited to, the following: • Higher limits of liability for cargo claims • Extended payment terms • Reduced or no late payment penalties • Insurance and indemnification • Frequency and extent of general rate increases • Advanced notification of changes to standard terms & conditions For shippers, the drafting goal in reducing these negotiations into a written contract is to have all of the terms contained within the agreement itself, without incorporating by reference any of the carrier’s standard terms or by referring to other publications. Examples of such other publications would be the National Motor Freight Classification (NMFC) or mileage guides. When it is necessary to refer to other publications or sources, either out of necessity or convenience, it is important to then freeze the contents of such publication as written on the date of the transportation contract between the carrier and the shipper — and specifically preclude any future amendments or changes to the other publication.

To wrap up, I would like to say that if any readers of this column have any suggestions or requests for future columns, please don’t be bashful. I would really like to hear from you!

All for now! p

BrENt Wm. PrimUS, J.D., is the CEO of Primus Law Office, P.A. and the Senior Editor of transportlawtexts, inc. Previous columns, including those of William J. Augello, may be found in the “Content Library” on the PARCEL website (www.PARCELindustry.com).

Your questions are welcome at brent@transportlawtexts.com.

Wrap up with Michael

J. Ryan

A World Financial Crisis…

Are You Ready ?

M

any governments around the world are struggling through a debt crisis.

In a recent Wall Street Journal, a headline titled, “Threat Spreads Across Europe” ran. Have you put any thought around the notion of a global financial meltdown and how that could impact your business? How would you manage your small parcel shipping in this type of crisis?

Service Coverage During a financial crisis, the first area that the small parcel carriers would look at is their current labor cost and how to optimize it. They would begin to re-align their delivery networks to meet supply and demand. This would mean that their extended delivery areas would get less coverage and slower service. At the same time, they would raise their DAS fees… hmmm, more cost, less service. How would you service your customers in this area (the USPS might be a good choice)?

Unstable Rate Increases In the early days of the introduction of the fuel surcharge, there were months that this fee would go up one to two percent each month. During a financial crisis, we could see the inflation rate go up uncontrollably, which could create a new parcel fee (”Inflation Rate Fee”) or the base parcel rates may change on a monthly basis. What would you do to minimize this impact to your organization?

Here are some ideas: 1.

2.

3.

Fuel Surcharge and Increased Accessorial Fees During a financial crisis, the small parcel carriers would go to their “global crisis clause” or whatever they call it to have an excuse to raise rates and fees. Most additional fees relative to a small parcel shipment represent 30-40% of the total cost. What would you do to minimize the impact to your customers and organization?

During volatile times, this could spur a fuel crisis too… which could impact the utilization of a small parcel carrier’s fleet.

Order Process We have moved into a culture in which consumers have more frequent, smaller orders. You may need to change the buying behavior of your customers to larger orders and fewer of them. You may need to offer up incentives to achieve this.

4.

5.

6.

7.

Capacity Your small parcel carriers may reduce the size of their air and ground networks, which could reduce the transit time to your customers. We all know that expected transit time is a critical element to a satisfied customer. Would it make sense to get closer to your customers through a 3-4-5-6 node DC network? I realize that this is an expensive option to look at but there are many 3PLs that can develop this virtual multinode network in short order. The USPS has additional capacity and could be a viable option too.

Investigate all potential service options like parcel consolidators, regional carriers, local courier companies and the USPS. Evaluate your service mode options. You will want to move more product via surface transportation. Zone skipping may be a great option too.

Preferred Customers— It is critical to understand your most profitable and strategic customers. You may need to make some difficult decisions on which customers will get serviced first.

DC Network Analysis— This process and decision needs to be done before a crisis hits. We have one of the most sophisticated supply chain systems in the world but they could change dramatically during a world financial crisis.

Financial Planning— Many of you are planning your budgets for 2013. This is a good time to add “Surplus Fund” for a supply chain crisis.

Order Size and Frequency— You may need to adjust your order policy with your customers to ensure consistent and reliable service. This may include longer lead times and minimum size requirements.

Parcel Contracts— Revisit your parcel contracts and put rate increase caps (three to five percent) in them. This will provide some insurance in the early stages of hyper inflation. Please keep in mind that all fees in an agreement are negotiable (during normal times). p

Michael J. Ryan is the Director, Business Development at DSC Logistics and has been in the parcel industry for over 25 years. He can be reached at 847.393.5862 or mike.ryan@dsc-logistics.com. july-august 2012 | www.PARCELindustry.com

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2012

TOP PERfoRmERS

In our 2012 Top Performers issue, you’ll find a wide variety of companies servicing the small shipment industry. Looking for companies that will help you take your business outside the borders of the United States? No problem; we’ve got that covered. Want to ship your products with someone other than the Big Two? We’ve got regional carriers listed in here. Need freight auditing services? Yep, we’ve got companies that provide this service profiled, too. And that just scratches the surface — as you will see, we’ve profiled companies that cover just about every aspect of the supply chain.

So flip through these pages and take a look at the companies listed within. Whether you’re looking for a new solution provider right now, or just hoping to get an idea of what is out there should you need something in the future, PARCEL’s Top Performers issue is your number one resource.

Plus, these companies are profiled on our website for a full 12 months after this issue runs, so you’ll have access to it at any time, until next July… when we profile next year’s top performers!

Bell and Howell

Bell and Howell

Bell and Howell, LLC is one of the parcel industry’s leading innovators of automated solutions for parcel processing. The company’s complete portfolio includes products that reduce production and shipping costs, increase operational efficiency and ensure integrity and quality.

The Bell and Howell flagship parcel management system, ParcelMgr, lowers the cost of parcel fulfillment and delivery by automating the tasks of identifying, weighing, labeling, and sorting parcels or flats. At speeds of up to 5,000 parcels per hour, this automated system solution typically provides a quick return on investment by reducing the amount of labor required.

The ParcelMgr solution can apply virtually any carrier label to a parcel or flat. USPS Bound Printed Matter, Parcel, and Parcel Plus labels are typical ParcelMgr applications. It also accommodates FedEx, UPS, DHL and other private-carrier labeling. An optional upgrade can even accommodate TSA international verification requirements.

TOP PERFORMERS 2012

This system requires no more than two operators and in some cases can be managed by only one. Processes within the ParcelMgr solution include material handling, product identification (scanning and dimensioning), labeling and sortation. The induction of products into the system consists of gapping and aligning for the downstream processes. The product is then identified by use of scanners (laser or camera based) decoding either a barcode or printed characters. At this point in the process, product dimensions can be calculated and products that were not properly singulated can be detected. The product is then weighed by an in motion scale and labeled by a high speed linerless print and apply system. A scanner is positioned following the labeling system to validate the applied label.

ParcelMgr can be supplied as a standalone system with ergonomically designed manual induction options or integrated into an existing conveyor system. With either hardware design, Bell and Howell can provide the communication interface with the host system to manage data downloads and uploads as desired.

At the foundation of Bell and Howell’s commitment to the automation of highly manual workflows is its expertise, underpinned by many patents surrounding the application of shipping labels, analysis of dimensional data for manifesting, and barcode, weight and OCR reading technology.

Supporting our solutions is one of the largest dedicated service organizations in the industry. Bell and Howell is headquartered in Durham, N.C., and maintains facilities in Wheeling, Ill., Bethlehem, Pa. and Rochester, N.Y. For further information, please visit www.bellhowell.net, or email marketing@bhemail.com.

Bell and Howell marketing@bhemail.com www.bellhowell.net

Looking for a way to reach 34 million consumers?

Let Canada Post help.

Are you selling or thinking of selling to Canadians online? Ship to them with Canada Post. We deliver to every address in Canada and ensure your customers’ delivery experience is unsurpassed. Our direct marketing services can help you target and reach your best Canadian prospects. And once you convince them to buy, count on us to deliver your products to any and every address in Canada - and ensure your customer’s delivery experience is the best available.

Reasons why you should target Canada: We are close, we shop online and Canadians know and trust Canada Post.

Canada 80% of Canadians live within 60 miles of the US border 30% of Canadians live in 3 major urban centers (Vancouver – 2.2 m, Toronto – 5.5 m, Montreal – 3.6 m) 75% of Canadians live in 19 areas of 100,000 or more

Canada Post

Reaching a market of 34 million is easier than you think. Importing and exporting your goods doesn't need to be overwhelming. With a solid understanding of the process and requirements along with a sound plan you can increase your efficiency, reduce any hassles and improve your bottom line. Canada Post and our market entry specialists make it easy and manageable for you.

Canadians 82% of Canadian online shoppers would prefer to buy from Canadian sites BUT nearly half of their purchases are from sites in the US or abroad.

Reasons why:* better selection and price more sites higher quality goods and services Canadians who purchase through mail order, telephone or catalogues are also MOST LIKELY to shop online.**

Canada Post at a glance Canada Post Corporation is one of the largest federal Crown corporations and one of the largest employers in Canada, employing either directly or through our subsidiaries approximately 71,000 employees (that include subsidiaries Purolator Courier Ltd. and SCI Group Inc. as well as joint venture Innovapost Inc). Our employees deliver approximately 11 billion pieces of mail, parcels and messages each year to some 15 million addresses in urban, rural and remote locations across Canada. Our delivery network continues to grow by approximately 200,000 addresses a year. The Canada Post segment operates the largest retail network in Canada with 6,532 post offices.

Canada Post operates the country’s largest transportation and retail networks. It provides Canadians with outstanding delivery, logistics and communications services, and plays a key role in the Canadian economy.

Canada Post

To speak to our Canadian market entry specialist, please contact: Scott Brunton 905.688.2615 ext 2001 www.selltocanadians.com Scottc.brunton@canadapost.ca

* Deloitte & Touche and Angus Reid ** CANOE/Pllara Research

TOP PERfORMERS 2012

Canada Post has one of the largest retail networks in Canada with over 6,500 Retail Outlets. This accessibility makes it easy & convenient for consumers to pick up parcels that have been carded when they are not home, send outbound shipments and deposit return shipments.

In urban areas, our post offices are 1.5 to 2 km apart, and even closer in downtown cores. Eighty-one percent of rural Canadians are within 7.5 km of a post office.

Cass Information Systems

Cass Information Systems

Cass Information Systems, Inc., the leader in freight audit, payment and business intelligence services, combines its 50-plus years of experience in freight bill payment with the most comprehensive parcel audit and payment processing and business analytics in the industry.

We provide a full-service parcel shipment offering that includes auditing, general ledger coding down to the charge level, payment and customized business analytics.

Business Analytics Features: • • • • •

Visibility to all accessorial charges, service selection, zone and weight distribution, allowing identification of wasted money on unnecessary service levels or services as well as all the information you would need to negotiate the best contract Packages updated with supplementary charges, giving you the true cost of the package Specialized reporting, such as address corrections, suspect fraudulent package and policy violation to identify persistent problems and take corrective action Manifest reconciliation closing the loop on projected versus actual cost, giving you the feedback you need to update your shipping system to choose the best route Visibility into damaged or lost packages, and visibility into charges and activity by cost center, facility or account number

TOP PERfORMERS 2012

Processing & Auditing Features: • • • • • • • • •

Automated general ledger coding with online exception handling Online new account number notification and approval Customized feeds to integrate with your accounting and transportations systems Rate audit including tiered and incentive discounts and accessorials Service failure audit and reporting of exceptions No proof of shipment or delivery auditing Duplicate protection at the invoice, package and package charge levels Account/Meter number validation Recovery of audit overcharges

Contact us today to learn the full potential that Cass Parcel Services offers, and how we can start saving you money on your parcel shipments.

Cass Information Systems, Inc. 13001 Hollenberg Drive Bridgeton, MO 63044 314.506.5500 www.cassparcel.com cass@cassinfo.com

CT Logistics

Commitment to Quality Solutions Our 89 years of experience has allowed us to create a broad range of freight cost validation, allocation and reporting solutions — all tailored to meet your company’s unique requirements. CT Logistics, one of the preeminent providers of freight payment services and transportation management solutions, provides you with a foundation of confidence in all supply chain areas of expertise requested.

CT will work with you by creating customized business solutions so that you can focus on your firm’s core competencies — ensuring a quality, efficient, effective and robust supply chain management system for your global operational needs.

Trust

CT Logistics

Confidence

Firms of all sizes, including Fortune 100 corporations across the country and the globe, have relied on CT Logistics to assist them in making solid, informed decisions regarding their freight audit, payment, and business intelligence needs. Our team of professionals has been instrumental in assisting our clients in leveraging expertise and technology to maximize return on the client’s investment, and by providing the unique flexibility required to meet the challenges presented in a fast-paced, changing, global environment.

Leadership CT Logistics is a leader in the freight payment and transportation management services industry. With FreitRater — the industry’s first choice for freight management and TMS software — and our customized solutions for your global freight payment systems, our AuditPay and TranSaver solutions will exceed your expectations.

We create customized solutions that will keep your company focused and in control of the ever changing needs of global business, allowing your firm to maintain a competitive advantage, remaining a step ahead of your competition to ensure your lead in the marketplace.

All of these attributes are woven into our corporate philosophy, which is the foundation and tradition that our clients have relied on for 89 years.

Nevertheless, just as important is the future that the CT Logistics will help our customers meet every need as they advance. Our services and software are evolving to provide you with the latest leading-edge applications and systems that will enable you to better manage and reduce supply chain costs while adding more visibility and control to your organization, positively impacting your bottom line; that is our commitment to you.

PreAudit services all modes in over 19 countries, meeting each customer’s needs for processing and reporting (over 400 data fields for reporting selections), with each invoice paid correctly. PRONTO, Process Right On Time Once.

Visit www.ctlogistics.com for more information about our products and services, or call 216.267.2000, ext. 2190.

CT Logistics

216.267.2000 ext 2190 sales@ctlogistics.com www.ctlogistics.com

TOP PERFORMERS 2012

Confidence, Trust and Leadership … Traditions Since 1923

Engineering Innovation

TOP PERFORMERS 2012

Engineering Innovation

Specialists in postage savings for mailers of all sizes, Engineering Innovation, EII, resolves the challenges of mail management workflow for letters, flats and parcels. EII, best known as the creator of the EZ-Flats Manifesting System, has enhanced its product offerings to include new parcel solutions. You can select either simple OCR assist, with the EZ-OCR Workstation or full automation processing with the EZ-Parcel System. Both are turnkey solutions for the IMpB eDoc deadline.

EII combines more than 30 years of mailroom experience with over 20 years of design innovation. The product line includes automated workflow solutions that easily integrate into production environments. Presorting companies, corporate mailers, and shippers will find EII’s commitment to quality products will result in significant postage savings.

The innovative systems generate revenue opportunities, while offering varied options for small and large facilities.

•

EZ-OCR Workstation resolves the eDoc and IMpB requirement for mail processors. The Workstation automates the keying process by leveraging OCR technology to capture address information, print and IMpB label, and generate postal compliant eDocumentation. EZ-OCR allows operations to realize enhanced throughput, when compared to traditional manual keying stations, and generate required documentation.

•

EZ-Letters is a highly scalable “out-of-the-box” unit at a mere 3x5 feet. Its single-sided stackers allow it to be set up against a wall to fit into the tightest mail room. Double-sided and multi-tier sections are also available to allow for higher volumes and more complex sorting requirements.

•

EZ-Parcels delivers a scalable system for processing parcels: single-piece, presort, and mixed parcel. This scalable solution is designed for small and large shippers to leverage savings afforded by USPS parcel rates and for mail service companies consolidating parcels from multiple clients. Key is the ability to weigh, dimension, and label on the fly. Options include an incoming conveyor and outbound sortation. This Manifest Mailing System eliminates metering while enabling cost-center charge-back functionality, optimal for outsourcing and facilities management.

•

The CHAMP’s processes mail utilizing smart class conversion combined with differential weighing and industry-leading manifest software. The Champ enables the handling of multiple types of mixed-weight mail simultaneously, while positioning mailroom staff to obtain optimal postage discounts. The CHAMP also simplifies Priority Mail preparation for discounted Commercial rates.

•

EZ-Confirm is a web-based solution that simplifies and enhances the Certified Mail process. It allows staff to create mail faster at their desk and eliminates completion of handwritten cards and receipts. Its patented tracking technology includes easy search-ability and significant postal savings for accountable mail.

•

EZ-Flats combines automation and personnel to work more efficiently and effectively than other sorting technologies with the included bundle-based module. Designed as a Manifest Mailing System (MMS), EZ-Flats eliminates the need for a meter as it processes mixedweight flats. Once weighed and read by the OCR, a label is produced featuring permit indicia, barcode, piece ID, and proprietary sort codes to expedite automation discounts. EZ-Flats leverages dynamic sort logic to identify 10th piece bundle upgrade processing in real time.

Engineering Innovation 800.350.6450 eii-online.com

enVista

John Stitz

enVista’s Transportation Spend Management solutions reduce transportation costs across the enterprise, including the industry’s leading freight invoice audit/payment and carrier contract analysis and negotiation services.

TRANSPORTATION SOLUTIONS • Transportation Consulting • Freight Invoice Audit & Payment Services • Carrier Contract Analysis & Negotiation Services • myShipINFO® Business Intelligence o Web-based Visibility to Transportation Spend Across All Modes o Executive Dashboards and Ad Hoc Reporting • Managed TMSaaS • And More EXPERIENCE Our experienced transportation consultants bring decades of experience and are highly skilled at streamlining processes and reducing transportation costs enterprise-wide.

CLIENTS Vera Bradley, See’s Candies, BodyBuilding.com, Gumps, Hibbett Sports, Dillard’s, and many more.

Prior to co-founding enVista, Stitz served as Senior Director of Strategic Alliances at Manhattan Associates, Vice President of Marketing and Strategic Alliances at Intrepa and Vice President of Sales and Marketing at The Summit Group.

He has a bachelor’s degree from St. Joseph’s College.

Stitz is a regular speaker at industry tradeshows and events.

RESULTS Each year, enVista saves hundreds of clients 15-30% annually on their transportation spend. For some companies, that translates into millions of dollars in savings.

CONTACT Contact us today to begin enjoying immediate transportation savings. Some services require no capital investment.

enVista

11711 N. Meridian Street Suite 415 Carmel, IN 46032 877.684.7700 inforequest@envistacorp.com www.envistacorp.com

July-August 2012 39

TOP PERFORMERS 2012

enVista is a leading transportation and supply chain consulting firm, delivering innovative solutions that improve customer service and profitability, and reduce waste, from source to consumption.

John Stitz is co-founder and principal owner of enVista where he is currently the Senior Managing Partner of enVista’s thriving transportation services practice.

With more than 20 years of supply chain, distribution and transportation experience, Stitz has delivered value for leading companies including Cutter & Buck, Woot, Hillerich & Bradsby, Genesco and Vera Bradley.

enVista

Senior Managing Partner, Transportation

Green Mountain Consulting

TOP PERFORMERS 2012

Green Mountain Consulting

Parcel Spend Management Experts

Jim Jacobs Executive Vice President, Chief Marketing Officer Jim is a founding partner with Green Mountain Consulting (GMC) and has over 17 years of experience in sales, marketing, and business development as well as 18 years of experience in the transportation and logistics industry. He is a native Memphian and holds a BBA from the University of Memphis. Jim joined GMC in 1998 as Executive Vice President where he has helped establish GMC as a leader in the parcel industry. Jim has led the development of Green Mountain’s Parcel Spend Management concept, which provides superior audit & freight payment services as the foundation for delivering customized parcel spend management solutions to the largest parcel shippers in the world. Under his leadership, GMC has been able to partner with the following companies to help them save an average of 17% of their parcel spend: Abercrombie & Fitch, AT&T, Barnes & Noble, Costco, General Motors, Glaxo Smith Kline, Johnson & Johnson, Kohl's, Novartis, Toyota, Toys R Us, and Williams Sonoma.

EVP Jim Jacobs explains Green Mountain’s unique approach to Parcel Spend Management in this video interview with Supply Chain Brain. Click here to view the interview: (http://www.supplychainbrain.com/ content/headline-news/single-article/ article/parcel-spend-managementsolutions/)

40 July-August 2012

Green Mountain Consulting (GMC) was founded in 1998 by former FedEx developers with over 70 years of collective experience in the area of carrier EDI automation and billing operations. GMC has evolved from a sole parcel freight audit and payment services provider to a company that specializes in delivering comprehensive spend management solutions for the largest parcel shippers in the world. Our customers are saving millions of dollars annually by leveraging the technology and experience at GMC to improve their parcel networks.

Our Value Proposition: GMC has created a comprehensive parcel spend management solution that leverages our proprietary billing and rerating technology, parcel industry experts and market intelligence to strategically partner with the largest parcel shippers in the world to manage their parcel spend at another level.

We partner with our customers’ existing resources, functioning as an extension of their team to manage their carrier invoice processing and payments, analyze and optimize their network, identify waste and inefficiencies, implement and track cost savings, and help them implement world class parcel agreements. Our customers’ net return averages a 20% plus reduction of their parcel spend, with a 300% plus ROI. GMC partners with our customers’ existing resources to strategically manage their parcel spend at an optimum level by leveraging these services: Invoice Automation: EDI parcel invoice receipt, account coding and payment automation Invoice Validation: ensure 100% contractual accuracy of invoices with credit request reconciliation prior to payment (no short paying parcel invoices) Spend Visibility: complete and flexible access to your parcel data at the lowest level of detail to analyze the performance of your parcel network (multiple department or project requirements) Spend Analytics: support strategic initiatives with analytical technology and resources (warehouse reduction/expansion, service level evaluation, product returns, .com breakout, parcel proposal impact) Network Optimization: identify cost and service improvement opportunities within your network (custom evaluation for each client) RFP Management: ensure world class carrier agreements tailored to match your strategy (Client owns the process; GMC provides industry trends/unique strategies/data impact reports)

Green Mountain Consulting

7240 Goodlett Farms Pkwy, Ste 110 Cordova, TN 38016 901.507.9307 877.397.2834 www.greenmountainconsulting.com

ABOUT US Beginning in 1986, Interlink was one of the first companies in the nation to develop and offer Warehouse Management Solutions (WMS). Early on, Interlink’s vision was to provide paperless, real-time information in the warehouse so that managers and supervisors could make smart decisions and keep the supply chain on track with their customer’s demands. Interlink’s vision remains focused on this philosophy while product development continues evolving with advancing technologies and practices. The key to Interlink’s success is the partnership Interlink provides to customers.

Interlink believes that it’s not enough to just provide customer service; instead Interlink provides a partnership service to achieve customer goals and deliver peace of mind.

WHSe-LINK WHSe-LINK (Warehouse Link) is Interlink’s WMS software package. “WHSe-LINK is a business system designed to support all distribution activities. From the moment the product arrives, until the product leaves, you have complete auditing and tracking information.” Management has full control over the user’s menu-driven directives and authorities. Productivity increases, shipping accuracy increases, response time, order-fill rate and customer satisfaction also increase.

Interlink Technologies

Interlink Technologies

No one likes to hear “I don’t know” in response to a question and management needs to know! Warehouse Link eliminates the uncertainty about where the product is located and where it is in the distribution process. Management decisions can be made with real-time, accurate information — whether they’re on the warehouse floor or in their office.

Warehouse Link includes features and functionality to manage your way. With over 25 years of warehouse management methods built into receiving, putaway, tracking, picking and shipping, Warehouse Link is designed to work with you, not dictate to you. Use Warehouse Link to manage kitting, lot/batch/serial numbers, environment requirements, hazardous materials, seasonal products, QC, cycle counts and more! (Many customers have even eliminated physical cycle counts!)

Interlink Solution Interlink Technologies is consistently ranked in the Top 100 Technology Providers. While Interlink’s core focus is software, Interlink provides a turn-key solution: WHSe-LINK Software, Hardware, Project Management, System Integration, Training and Support. If your warehouse deserves a WMS with powerful performance and a professional partner to help you achieve your goals — Think Interlink!

Interlink Technologies PO Box 970 Perrysburg, OH 43552 800.655.5465 info@www.thinkinterlink.com www.thinkinterlink.com

TOP PERFORMERS 2012

Warehouse Link operates in any warehouse environment, including but not limited to: 3PL, Pharmaceutical, Food, Healthcare, Retail, Automotive, Electronics, Manufacturing and Distribution. Warehouse Link is multi-building, multi-company, multi-location system that allows you to manage each independently or dependently. Warehouse Link is scalable — from five users to thousands. The system will grow as your company grows.

NLG Shipping

NLG Shipping

The NLG Logistics Group is an exclusive consortium of technology resellers and system integrators with over 150 years of combined experience in supply chain solutions. NLG solutions are engineered to be user friendly and are configurable to suit the individual business processes of each customer. From enterprise-wide solutions for Global companies to small business solutions, the NLG Logistics Group has the experience to implement a solution that will work in your business environment.

NLG multi-carrier software manages all carrier requirements, including online communication, compliance labeling, and carrier-approved manifesting. Economical features include unrivaled LTL automation, sophisticated rate shopping, and flexible data integration. The NLG Logistics Group has a complete library of interfaces to many of the leading ERP and business management software packages on the market today.

NLG serves our customers with an unmatched level of honesty, integrity, reliability and responsiveness; resulting in best-in-class solutions that positively impacts our customer’s return on investment. Our customers recognize NLG as the partner they turn to for solving complex fulfillment and transportation problems.

TOP PERFORMERS 2012

Three different platforms are offered, including ProShip, ConnectShip, and Clippership. Each transportation platform is uniquely designed to assist a wide variety of clientele. Integration options include flexible, centralized enterprise solutions and cloud-based web services. Whatever your need may be, NLG has a system for you.

• Global Transportation Management • Cloud-based web services • Pack Verification • Compliance Labeling (UCC128) & ASNs

• Web Storefront Cartonization & Rating • Pick to Carton • Global Address Management • Export Documentation • Visibility / Executive Dashboards

• Unattended Print and Apply / Black Box

www.nlgshipping.com

Chicago, Illinois 630.982.7400 www.tri-logix.com

Arlington, Texas 817.226.4646 www.amssinc.com

Englewood, Colorado 303.761.0681 www.comp-mail.com

Swansea, Massachusetts 508.379.3630 www.integratedsys.net

OnTrac

Mark Magill

At OnTrac, we are committed to providing the highest quality of service at the most competitive rates. With fewer accessorial fees than the national delivery companies, we pass the savings on to you. OnTrac can save you money and increase your productivity by improving the transit time of your shipments. In fact, shipments that normally take two days to deliver with national carriers now arrive next-day with OnTrac Ground service.

With over 1,000 conveniently located drop boxes and pickups as late as 9:00 pm in some areas, OnTrac understands the importance of flexibility and operating in time-sensitive environments. We routinely go the extra mile to help get the job done for our customers.

OnTrac has a reputation for delivering excellent service and our “can do” attitude is the hallmark of our success. Our money-back service guarantee assures that we are committed to exceeding your expectations. For more information, call 1.800.334.5000 or visit www.ontrac.com.

OnTrac

3401 E. Harbour Dr Phoenix, AZ 85034 800.334.5000 www.ontrac.com

Mark has also worked previously for SonicAir Courier, now a part of UPS Supply Chain Logistics. Mark now focuses on finding new solutions for supply chain logistics and helps companies with Western US distribution reduce costs and boost their bottom line.

In Mark’s experience, customers today have an expectation of expedited delivery without paying the high costs associated with express shipping services. regional package delivery companies, like OnTrac, can provide next-day delivery at ground rates to destinations within a 600700 mile radius.

Since over 60% of shipments stay within regional Carrier Zones 2 - 4 delivery area, this greatly reduces shipping costs while greatly increasing customer satisfaction. At a time when companies are rapidly restocking their inventory, OnTrac enables their customers to increase their daily productivity by providing much later pickup times than the national carriers.

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TOP PErFOrMErS 2012

OnTrac is the regional leader in overnight package delivery. Founded in 1991 as a division of Express Messenger Services Inc., a same-day courier service, OnTrac has the expertise to provide superior service and value in the overnight delivery market. We deliver to the seven largest western states offering time-critical service to California, Arizona, Nevada, Oregon, Washington, Utah and Colorado. With a delivery coverage area of over 60 million people, our service area is comprised of 20% of the US economy.

Mark Magill is the Director of Business Development for OnTrac.

He helps companies save money, improve delivery transit time and increase productivity. Mark has been in the transportation industry for over 20 years and has worked for OnTrac/ California Overnight for the past 19 years.

OnTrac

Director of Business Development

Pitney Bowes, Inc

Pitney Bowes, Inc

Pitney Bowes’ SendSuite Live Global Logistics Management gives you more visibility, control and choice. SendSuite Live can drive costs out of your parcel and freight spends, by giving you the business intelligence to plan and execute shipments better, faster and more effectively.

SendSuite Live gives you access to carriers’ rates and services, allowing you to optimize your shipments based on your business rules and delivery requirements. It captures information from all carriers in one location, featuring a centralized interface to managing your entire shipping operation, and provides full, upfront visibility to all shipping expenses, including surcharges – and provides the tools to avoid or minimize them. SendSuite Live integrates to CRM, ERP, WMS, and order management systems to give you the ability to plan, route, and manage your supply chain — simplifying order fulfillment.

Pitney Bowes also provides payment services, which simplifies and streamlines carrier invoicing by combining parcel, freight, and transportation management services onto one statement -- eliminating the need to manage multiple invoices. Shippers have the option to pay in full — or over time — adding greater flexibility and control to their cash flow.

TOP PERfORMERS 2012

Pitney Bowes knows logistics.

And with SendSuite Live, organizations will drive down transportation spend, create better visibility to their entire operation and have more control to make better business decisions. SendSuite Live is part of Pitney Bowes family of Distribution Solutions, which include inbound mail and parcel tracking systems, Arrival and SendSuite Tracking as well as our SendSuite Xpress parcel manifesting system.

Pitney Bowes, Inc 1 Elmcroft Road Stamford, CT. 06926 sendsuiteliveinfo@pb.com www.pbsendsuitelive.com

U-PIC

Bliss Wendelburg

U-PIC has been providing discounted package insurance for over 23 years with savings up to 85% off the carrier rates. Our claims are resolved within 7-10 business days, saving time and money. Our goal is to eliminate the carrier’s tedious claims process, making your life easier.

U-PIC provides world class customer service enhancing your experience, making it effortless and seamless. The carriers specialize in delivery; U-PIC specializes in shipping insurance at a discount.

Whether you ship one package or 1,000 packages per day, U-PIC will design a program that fits your needs. U-PIC easily integrates into your shipping software system, allowing you to insure your packages at your fingertips.

The Benefits of using U-PIC: • • • • • •

U-PIC provides Full Package Insurance Coverage from Door to Door Save up to 85% on Shipping Insurance Filing a Claim is Quick and Easy and Resolved within 7-10 Business Days Electronic Reporting and Tracking — Claims Status Available 24/7 Easily Integrates into your Shipping Software systems Excellent Customer Service with Licensed Specialists

Bliss started her career at U-PIC in 1989 and has held various positions in sales, management, marketing and business development. Bliss has spearheaded this company to new heights and is responsible for many accomplishments including the partnership with the USPS as the preferred shipping insurance company. The goal at U-PIC is to provide superb customer service and state of the art technology for an enhanced, easy experience.

Bliss earned a Bachelor of Science degree from San Diego State University. She lives with her husband Kirk and 3 children in Hidden Hills, California.

U-PIC – Shipping Insurance 29800 Agoura Road; Suite #200 Agoura Hill, CA 91301 800.955.4623 www.U-PIC.com

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TOP PERFORMERS 2012

Bliss has been leading U-PIC for over 23 years. During this time, U-PIC has emerged as one of the top companies in the package insurance industry. Under her leadership, U-PIC has grown tremendously and broadened its offerings, innovation and online capabilities.

U-PIC

President, CEO