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Save with Pool Distribution for Refrigerated Trucking

You need to get across town fast.

With no car, your choices are public transport or a cab.

Of course you want to take a cab.  But the wallet’s a little thin, so maybe a bus is the way to go.

But hold on.  What if you could share an air-conditioned cab ride with a few others who are also headed across town, and pay the same as the cost of a bus ride?

Welcome to pool distribution: direct car service for a mass transit price.

refrigerated truck pool distributionPool distribution is not just for moving dry freight.  Shippers who use refrigerated trucking services can leverage a pool strategy to drive down costs and ship times.  But the strategy has not caught on in a big way and they continue to rely heavily on national LTL carriers for cold chain requirements. 

For these shippers, all pool point distribution does is consolidate freight with other users of reefer trucking to deliver small volumes across the U.S. using more economical truckload shipments.  These shipments go direct to key markets, with no stops.

From there, pool distributors take over for final-mile delivery.  But the longest leg of your journey is handled at a much lower cost, and delivery is much faster using a truckload carrier that specializes in refrigerated trucking. 

Benefits of Pool Distribution for Temperature-Controlled Freight

  • Cut freight costs 8% to 10%.
  • Speed delivery times up to 4 days.
  • Meet retailer RAD dates.
  • Ease your administrative burden.
  • Reduce carbon emissions.

Of course, you’ll need the right partner to make it happen – a 3PL that can link you with other shippers of temp-controlled freight and that has the systems to make it all work. 

To determine if pool distribution is right for you, read our Insight paper: “Jump In the Pool: Shippers of Temperature-Controlled Freight Collaborate to Save.”

pool distribution temperature control

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

Connect with Weber Logistics on Google+

Addressing Misconceptions About Intermodal Freight

Over-the-road trucking has had its challenges in recent years, thanks to driver shortages, HOS regulations, rising fuel costs and capacity shortages.  During that time, railroads have been improving tracks and facilities, as well as service offerings, to meet shippers’ needs. That has led to a steady increase in the use of intermodal services.

The chart below from IANA’s Intermodal Market Trends & Statistics Report shows total intermodal loadings from 2000 – 2013.  While rail intermodal's percent of volume can still be measured in the low single digits compared with trucking, it is growing at a nice pace. 

intermodal freight

Companies are letting go of negative perceptions that led them to avoid rail in the past.  Let’s look at some of these misperceptions.

Rail is much slower than OTR

An intermodal move is usually slower than a move by truck. But often the lower cost of intermodal shipping can be worth a day or so of extra transit time.

Rail is unreliable

Although rail delays were a genuine problem in the past, U.S. railroads today have gained a reputation for on-time performance. As a result, some of the best-known OTR carriers in the U.S. now put freight on the rails. The Container Store, a national retailer, has actually seen on-time performance increase since it started delivering to stores in certain markets via intermodal.

Freight on rail is more likely to be damaged or stolen

Containers moving on solid blocks of flatcars rarely sustain damage, especially if the freight is blocked and braced correctly.

You can’t track freight while it’s on the rails

Railroads generally collect location data at specific checkpoints along a route. Unless GPS units are installed on containers, they don’t provide the real-time visibility that many motor carriers can. But shippers often find status information from the railroads sufficient for their needs.

Want to learn more about why companies are shifting more of their freight to intermodal?  Read our Insight paper:  Reduce Freight Transportation Costs with Intermodal Service.

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

Connect with Weber Logistics on Google+

Choosing a Chemical Warehouse Provider

chemical warehouse weber logisticsYou’re not going to choose just any 3PL to store and ship your chemical products.  The liability and safety risks associated with hazmat storage and shipping are just too great.

But how can you evaluate 3PLs to ensure you’re working with an expert company that can actually advise you on proper procedures for storage and handling?

Here are three tips for your vetting process.  Read our Insight paper for all 7 tips.  

1) Look for experience handing the class of chemicals you market.
3PLs that handle one class of chemicals are not necessarily qualified to handle others. For instance, non-regulated chemicals do not require the same stringent storage and handling procedures as flammables, oxidizers, explosives, corrosives, and other hazmat substances. Flammables, for instance, require firewalls and in-rack sprinklers. Make sure the chemical warehouse provider understands the requirements for your class of chemical and has the necessary operating procedures, permits, and physical environment to store and handle such products.

2) Limit transportation miles.
With chemicals, fewer miles are better. For one, hazardous chemical transportation is dangerous, and more miles means more risk. Secondly, transporting chemicals is expensive. Commercial drivers with a hazmat endorsement on their licenses earn 15%-20% more an hour than other drivers. Equipment and insurance costs add to this expense. The location of the provider’s warehouse is very relevant to the goal of reduced miles. Finding a provider that is centrally located to efficiently reach your customer base will reduce your costs and risk. Weber Logistics serves the chemical warehousing needs of many large companies who need a distribution point in California.

3) Choose a partner for present AND future needs.
Too many Requests for Proposals ask only about a 3PL’s ability to address current needs. Instead, you should anticipate your needs well into the future and look for a partner that can satisfy these requirements. This avoids the cost and risk involved in switching providers. For instance, today you may not be moving goods via rail, but you may want to exploit this lower-cost shipping option in the future. In that case, choosing a warehouse with a rail spur is smart planning. Likewise, your need today might be for simple pallet in/pallet out storage and distribution. But what if future requirements involve, for instance, repackaging 50-gallon drums into ten 5-gallon pails? Can the provider handle the job? Does the provider even want to do this kind of work?

For more tips on vetting chemical warehouse providers, read our Insight paper: Chemical Logistics: 7 Tips for Choosing a Partner for Storage and Distribution.

chemical logistics

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

Connect with Weber Logistics on Google+

VIDEO: Integrate B2B and B2C Distribution to Reduce Cost, Complexity

As the volume of online sales rises, many companies continue to struggle with managing the distinct fulfillment differences between B2B and B2C channels.  The trick is adapting processes to handle picking and packing of individual items for eCommerce fulfillment.

Close to 20% of companies completely segregate their B2b and B2C inventories.  Check their balance sheet and you’ll find extra inventory, extra equipment, extra buildings and extra people. 

Top fulfillment companies like Weber Logistics are able to effectively combine your retail and eCommerce fulfillment inventory to reduce cost and complexity. 

Check out this short video to see how. 

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

Connect with Weber Logistics on Google+

How Determining Warehouse Rates Is Like Preparing Your Tax Return

Too often, companies assume they have no power to impact warehouse distribution rates from 3PLs and commercial warehouse providers.

Not true. You have the power to control and reduce your warehousing costs.

An analogy might be preparation of your yearly IRS tax return. If you keep poor records and have no knowledge of allowable deductions for health expenses, business travel, and the like, you may pay more than you should. In contrast, if you keep meticulous records and have a solid understanding of IRS allowances, you’re more likely to get that fat refund.

In warehouse pricing, as in tax accounting, knowledge can translate into significant savings.

How much savings?  For a billion dollar company that spends $9 million a year on warehousing, a 15% reduction in these costs adds $1.3 million to company profit. For a smaller, $50 million dollar company, a 15% reduction in warehousing costs translates to about a $68,000 profit increase.

So how can you quickly get smart about warehouse pricing and how 3PLs determine their warehouse rates?  Weber Logistics has developed a guide: Understanding Commercial Warehouse Pricing.  

Check it out. It sounds awfully dry, but it’s actually not a bad read and it includes plenty of examples.

commerical warehouse pricing guide

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

Connect with Weber Logistics on Google+

Check Out This Video on Reducing Retailer Chargebacks

Retailer chargeback fines for non-compliant shipments are a costly reality for many consumer goods manufacturers.

But with the proper systems and processes in place, companies can avoid hundreds of thousands in lost profit.  Check out this short video on Weber Logistics’ approach to vendor compliance.

Retailer chargebacks do not have to be an accepted part of doing business with large retailers.  You can reduce or eliminate chargebacks with the right vendor compliance program.  To learn more, download Weber’s Insight paper: Reducing Chargebacks in Your Vendor Compliance Program.

reduce chargebacks vendor compliance

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

Connect with Weber Logistics on Google+

Freight Consolidation Strategy Provides Sweet Savings

freight consolidation strategyMost retail replenishment orders require the use of higher cost, less-than-truckload (LTL) freight for final-mile delivery. As a result, small and mid-sized companies struggle to meet daily retail replenishment requirements, while still keeping a rein on freight costs.

Freight consolidation strategies can solve this dilemma, but it requires a logistics partner with a large concentration of like customers with whom to co-load your freight.

Weber Logistics serves many customers in the confectionery industry. At its climate-controlled warehouses, Weber receives truckload (TL) shipments from multiple candy manufacturers, sorts products based on retailer orders and ships multi-vendor, consolidated TL shipments to meet retailers’ requested arrival dates.

The company operates a large temperature-controlled LTL freight network in the Western U.S. for final delivery, so cold chain requirements are maintained throughout the distribution cycle. 

The 17 participants in the Weber load consolidation program ship 175,000 to 200,000 pounds of candy per month, with Weber taking responsibility for strict temperature range monitoring. 

Learn about Weber’s confectionery industry logistics experience and the benefits of load consolidation programs.    

food distribution 3pl

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

Connect with Weber Logistics on Google+

Data is the Key to Accurate Warehouse Pricing

warehouse pricingThird party logistics providers use different warehouse pricing models to determine their costs for warehouse storage and services. But the approaches are pretty similar across providers. We all look at a variety of data, including product volume, case size, pallet size and weight.

For a primer on warehouse pricing, download our Commercial Warehouse Pricing Guide.  

To get the pricing right, we need accurate data on the account characteristics to plug into a pricing model. Understandably, shippers often can’t provide all the details requested. Here are some actual shipper responses to pricing worksheet questions:

  • “I’m not sure about the number of pallets, but it’s 25,000 pounds.”
  • “I don’t have access to this information. Would need to talk to the systems department to get it, and they’re busy.”
  • “I think it will be 500-1,000 orders a day, I think.”
  • “I don’t have any of this data, they just asked me to find a warehouse in your city.”
  • “For number of orders, just use the average orders for your others customers who are like me.”

When a 3PL doesn’t have the data for its warehouse pricing model, the company has to make assumptions. For example, let’s say a shipper does not know if products can be stored 2 pallets high or 3 pallets high. If the 3PL needs to charge $15 per pallet footprint, then the rate for 2-high storage would be $7.50 per pallet. But if the product can be stored 3-high, the rate would drop to $5.00 per pallet.  

You can see how missing or incorrect data will result in inaccurate rates. When it comes to commercial warehouse pricing, accurate data on the current operation is everything.  

commerical warehouse pricing guide

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

Connect with Weber Logistics on Google+

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+
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