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Retail Compliance to Reduce Chargebacks

retail chargebacksRetailer chargeback fines for non-compliant shipments are a profit-draining reality for many consumer goods manufacturers.

But they don’t have to be.

Companies with the will and the resources to prevent and refute chargebacks can avoid hundreds of thousands, even millions, in lost profit.  Success requires creating a retail compliance capability – either internally or through a partnership with a 3PL experienced in retail distribution.

Following are tips for avoiding these costly penalties.  For our complete 7-step process to reduce chargebacks, read our Weber Insight paper on retail compliance

Most frequent chargebacks

    1. Quantify the financial impact of chargebacks.

    Arrive at one, definitive and defensible number for your total chargeback costs. This won’t solve the problem, but it will position you better to win support for investments in the people and systems you may need. The information may be easier to get than you think. Accounting typically provides a report to logistics or the distribution center on chargebacks received. This will identify costs directly related to invoice reductions.

    2. Invest in an advanced warehouse management system (WMS).

        Staying one step ahead of retail compliance requirements without an advanced WMS is like racing the Indy 500 in your dad’s Buick. It’s not a race you’re going to win. Any paper-based process will require significant labor to stay compliant. And no amount of checks and re-checks will eliminate human error entirely. You need a WMS to automate distribution and data transfer tasks or partner with a 3PL whose systems are designed to support retail compliance.

        3. Get EDI right

        After early/late deliveries, by far the biggest source of retail chargebacks is late, unreadable, or incorrect advance shipping notices (ASNs) – information transmitted to a retailer in advance of delivery that details the products and volumes in the shipment. Address the ASN problem and you’ve licked a good percentage of your chargeback issues.

        4. Make compliance someone’s full or part-time job.

        Who owns vendor compliance? Logistics? Sales? Accounts Receivable? With no clear owner, there is no clear plan. With no clear plan, compliance deteriorates into a cycle of repeated violations and finger-pointing. Don’t have the resources to handle this internally? The right 3PL can take on shipping compliance requirements, allowing you to, in a sense, outsource vendor compliance.

        reduce chargebacks vendor compliance

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Benefits of Pool Distribution for Refrigerated LTL

        Companies with temperature-sensitive freight that don’t have the volume to ship direct, full truckloads must rely on a limited number of refrigerated LTL carriers.  Because demand exceeds freight capacity, particularly in the chilled and frozen category, freight costs are high. 

        An alternative exists to address many of the service and cost shortfalls of temperature-controlled LTL networks.  A pool distribution strategy combines freight moving to the same place at the same temperature range.  You can arrange this collaboration yourself, but most often it’s managed by third party logistics providers (3PLs) who have relationships with multiple shippers with like products and can play matchmaker. 

        Read our paper on how shippers of refrigerated LTL freight are collaborating to save. 

        pool distribution refrigerated ltl

        The pool concept works at both origin (pool consolidation) and destination (pool distribution).  At origin, 3PLs or carriers establish a regional consolidation center where companies ship finished goods from the factory for distribution to other regions of the country.  The 3PL works with multiple shippers of temperature-controlled freight to fill freight capacity. 

        Companies moving full truckloads into a region can use local pool distribution to drive down refrigerated LTL freight costs. Pool distribution is ideal for short shelf life products, such as confections, that can’t afford to be stored for long periods. 

        With a pool strategy, retailers submit orders and requested arrival times and food shippers arrange delivery to meet these requirements.  It’s the perfect strategy for a zero inventory model. 

        Benefits of Pool Distribution:

        • Cut freight costs 8% to 10% 
        • Speed delivery times
        • Meet retailer RAD dates 
        • Avoid the administrative burden of identifying, vetting and managing multiple LTL carriers
        • Reduce carbon emissions 
        • Reduce damage

        pool distribution temperature control

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        California Trucking Industry Could Be Hit by Hidden Gas Tax Effective January 1st 2015

        Weber Logistics hosted a “Tank the Tax” press conference at our San Diego distribution center. Tank the Tax is a campaign that advocates against regulations that would raise the cost of fuel in the state. 

        Earlier this year the California Air and Resource Board (CARB) proposed a tax on gas that could slow down the growth of the California trucking industry. This hidden gas tax is expected to take effect January 1st 2015. Prices are expected to rise between 15 cents and 76 cents per gallon.

        Increased gas prices will affect consumers as well as businesses, mainly the California trucking industry. Gas prices in California are higher than any other state. A gas price increase will encourage trucks to gas up outside state lines and may drive logistics businesses to neighboring states.

        Weber Logistics uses half a million gallons of gas a year.  A 75 cent increase per gallon will increase operations costs by $375,000 annually. Weber Logistics CEO, Harry Drajpuch, says this amount of money is equivalent to 10-12 jobs.

        tank the tax 

        Weber Logistics CEO Harry Drajpuch (left) stands with State Assemblyman Brian Jones (center) and Mike Williams from IWLA.

        In the midst of rising costs, Weber Logistics stands by our high standards to deliver and perform efficiently and effectively. With our large network of asset and brokerage fleets we continue to push through these tough times to provide the best services to our partners.

        We want to keep providing the best service at a reasonable price, so please join us in supporting Tank the Tax by visiting http://www.tankthetax.com.

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Video: Manage Multi-channel Fulfillment from One Facility and System

        With more and more consumers shopping online, companies have had to adapt fulfillment to handle picking and shipping of individual items.  Operationally, multi-channel fulfillment is a big shift. So big, in fact, that many companies have chosen to separately manage fulfillment of bulk retail orders and fulfillment of individual eCommerce orders.


        When they do this, it can involve separate buildings and separate systems.  These incremental costs are steep and largely unnecessary.  It’s one of the reasons the online portions of many businesses remain unprofitable.  

        Weber Logistics’ multi-channel fulfillment solution effectively combines retail and direct-to-consumer inventories to reduce both cost and complexity.  Check out this video to see how Weber works with mid-tier manufacturers to manage the multi-channel logistics challenge.  

        multi channel fulfillment

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Reduce Costs, Time-to-Market with Phoenix Distribution Center

        Arizona is one of the fastest growing regions of the U.S. and many companies are examining whether an Arizona warehousing location can help them better serve this important market.

        Temperature-controlled distribution space is now available at Weber’s Phoenix distribution center and Weber is offering reduced dry storage rates for prime, air-conditioned space.  

        Key benefits to Phoenix, Arizona warehousing include:

        • Reduced time to market.  Major retailers, including Walmart, Costco, Kroger and PetSmart, have established distribution centers in the area. 
        • Reduced costs.  Low-cost, highly efficient operating environment.
        • Expand distribution to the growing Southwest market.  34 million consumers are within a half-day truck haul of Phoenix.

        Weber Logistics’ Phoenix distribution center is actually located just west of Phoenix in Tolleson, AZ.  Some facility facts:

        • Food-grade warehouse – 55°F to 70°F – that serves a number of confectionary and food companies.
        • Final-mile delivery services to retailers, including temperature-controlled deliveries.
        • Value added services include postponement activities such as club pack assembly, point-of-purchase display assembly, and kitting.

        To discuss Weber’s offer of dry storage rates for prime, air-conditioned space and how a Phoenix distribution center location could help your business, call Weber today at 855-GOWEBER (469-3237).  Or, contact us on the web. 

        phoenix distribution center

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Why SoCal Ports will Remain Strong Post Panama Canal Expansion

        It’s hard to say exactly when the newest section of the expanded Panama Canal will open. Construction delays and labor disputes have laid waste to the original timeline. 

        Once it opens, many people (particularly representatives of ports east of the Canal) have suggested that a significant percent of import freight would shift to Gulf Coast or East Coast ports, closer to populated markets in the Eastern U.S.  These ports are investing to dredge harbors in order to receive the newest Post-Panamax cargo ships, which will have the capacity to carry up to 18,000 TEUs. 

        We believe that the demand for Southern California ports will remain strong long after the Panama Canal expansion is completed.  Download our Insight paper: Panama Canal Expansion: Impact on West Coast Ports.

        The reason is that it takes far more than a deep-water port to successfully process millions of containers and transport them to and from the port. 

        Over the past 50 years, the Ports of LA and Long Beach have developed a complex supporting infrastructure to accommodate huge import and export volumes. This infrastructure includes roads, warehouses, trucking terminals, rail terminals that run directly to the vessels at the ports, and the logistics companies and experienced workers to service high and fluctuating volumes.

        Eastern ports like Savannah, Tampa, Norfolk, Baltimore and New York are just developing an ability to receive larger cargo vessels, and they do not yet have the complex supporting infrastructure to move goods efficiently from the port to the retail shelf quickly and efficiently.

        These infrastructure changes take years to complete. They involve dredging harbors, building larger bridges to accommodate the taller heights of the “super vessels,” building roads to accommodate increased heavy vehicle traffic flows, adding rail lines, and building warehouse facilities.

        Such projects are also very expensive and the costs, no doubt, will translate into additional fees and taxes to the ship lines and, ultimately, higher costs for U.S. importers and exporters.

        Southern California is the gateway to North America for Asian shippers today. Why? Because importing through Southern California is less expensive and two weeks faster than using Gulf Coast and East Coast port cities.

        The expansion of the Panama Canal will not change this. The Ports of LA and Long Beach will continue to be North America’s freight gateway long after the Canal expansion is completed. 

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Is Commercial Warehouse Pricing Simple?

        Well, yes and no.

        At one level, commercial warehouse pricing is very simple in that it considers just two things:

        • the amount of SPACE needed
        • the TIME it takes to perform certain tasks

        So, if you know your space costs and labor costs, coming up with a warehouse cost per square foot should be straightforward. 

        Hold on Flash Gordon….not so fast.

        Tasks can be performed in different ways:

        • with or without automation
        • with or without computer systems
        • with or without engineered process flows

        All of these impact time. 

        And products can be stored in different ways:

        • unstacked on the floor
        • stacked several levels high on the floor
        • in racks as high and deep as the building and business profile will allow

        The storage method will dramatically impact space required and, ultimately, the storage rate.  

        Detailed information is required to determine how much space and labor will be required.  Gathering this data can be tedious, but the more information that can be extracted and shared, the more accurate the pricing will be. 

        Weber Logistics has developed a simple guide to commercial warehousing pricing.  Download it for free.

        commerical warehouse pricing guide

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Choosing the Right 3PL for Cold Chain Logistics and Food Distribution

        You know the perils of cold chain logistics and food distribution. Let your guard down, and a pallet of chocolate turns into a gooey mess, or you get stuck with racks full of canned goods nearing their sell-by date.

        The right 3PL can help you avoid those pitfalls. Download our free guide: Choosing a 3PL for Food Product Distribution.  

        How do you know which 3PL to trust with your food shipments? Here are steps every food shipper should take to determine if a 3PL really has what it takes:

        Temperature Integrity

        • Ask to see logs that show temperature readings over time.
        • Ask how reefer trailers are monitored. At the very least, they should carry digital thermostats that are easily visible to the driver.
        • What’s the backup plan? If the cooling or heating system goes down, how will the company maintain the right temperature in each zone until it’s repaired?

        Inventory Management and Stock Rotation

        • Ask how many of the 3PL’s customers require picking by FIFO, FEFO and other principles.
        • Call some of those customers and ask how well the 3PL meets their criteria for picking.
        • Ask to see sample orders that demonstrate how the WMS tracks particular code dates or other indicators.

        Cost Reduction

        • Investigate the WMS. A full-featured system does a better job of managing productivity.
        • Ask what investments the company has made to lower energy costs.
        • Ask how the company measures labor productivity. If there are no metrics in place, that’s a bad sign.

        Regulatory Requirements

        • Ask to see records of mock recalls.
        • Ask to see records of inspections by a professional auditing firm.
        • Get references from food companies for whom the 3PL has performed mock recalls. Find out what company officials thought of the results.

        Experience

        • Tour the warehouse. Does everything look well-maintained? Or do you see danger signs, such as poor seals around refrigerator doors, or doors left open?
        • Is the facility spotless? Are there written procedures to ensure proper sanitation?
        • Ask to see sample reports that demonstrate the power and flexibility of the WMS and other IT systems.

        Food distribution may entail many risks, but an experienced, well-qualified 3PL will help you keep your operation profitable, compliant and safe. To find the right partner, make sure you ask the right questions.

        food distribution 3pl

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        Choosing the right location for your West Coast warehouse

        chose west coast warehouseMost importers to Southern California want to establish a West Coast warehouse for national, regional or local distribution. The question is where to locate your inventory.

        If you establish a transload/warehouse facility near the port, your drayage costs will be cheaper and transportation costs to LA customers will be less, but space and labor costs will be higher and you’ll deal with LA-area road congestion.

        If you choose to locate in the Inland Empire region – a major hub for logistics activity 60 miles east of Los Angeles – your space and labor costs will be cheaper and facilities will be newer, but drayage and outbound transportation costs will increase because of the added distance from the port.

        Download our white paper – Logistics Primer for Importers to Southern California Seaports – to learn more about optimal warehouse locations and other logistics challenges faced by importers to Southern California.

        The right location choice for a West Coast warehouse will depend on the specifics of your business. The following “If/Then” chart can help you decide what’s best for you. There are many variables to be considered and the chart covers just a few.

        west coast warehouse

        There are about 1 billion square feet of California warehouse space from Bakersfield to the Mexico border and many are operated by third party logistics providers (3PLs).  The right 3PL partner can do a detailed analysis to determine the optimal West Coast warehouse location for your business.

          logistics southern california ports

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+

        What is the C-TPAT program and why should you care?

        C-TPAT is a voluntary government-business initiative designed to guard against illegal smuggling of dangerous cargo by terrorists.

        describe the imageIn the post 9-11 era, stepped-up inspections delay processing of imports from 1 to 2 weeks, slowing the importer’s supply chain and cash cycle. Importers that want to avoid these Customs delays and support efforts to secure the country’s borders are seeking certification under the C-TPAT program – the Customs-Trade Partnership Against Terrorism.

        Weber has published a paper to help you understand the benefits to shippers of the C-TPAT program. Download the paper: C-TPAT Membership: Is it Right for You?

        Following is a quick summary of these benefits. 

        • Secure the country’s borders.  Many C-TPAT members cite this as their primary motivation for becoming certified.
        • Speed your supply chain. C-TPAT shipments are 4-6 times less likely to undergo an examination than non-C-TPAT shipments.
        • Reduce costs. As an importer, you pay for Customs cargo examinations. C-TPAT program certification means fewer inspections, reducing these costs. Another cost, and one that is harder to quantify, is the cost of delayed shipments to retail customers. A lengthy delay on an out-of-stock product could jeopardize your relationship, even your business, with a retailer.
        • Gain favor with retailers. Increasingly, retailers are encouraging vendors to become C-TPAT compliant. While C-TPAT compliance is not the reason retailers seek out your products, it can tip the scales in your favor at the tail end of a vendor selection process.

        If you are outsourcing any portion of your supply chain to third party logistics providers (3PLs), their security procedures come under just as much scrutiny as your own during C-TPAT evaluations. So, if you are considering the C-TPAT program, it helps to work with 3PLs, like Weber Logistics, that are well-versed in C-TPAT protocols. 

        Download the Weber Logistics Insight:

          Is C-TPAT Right for You?

         

        Weber Logistics is the leader in West Coast and California logistics, warehousing and trucking.

        Connect with Weber Logistics on Google+
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