To provide a warehouse pricing quote, most third party logistics providers (3PLs) use profile worksheets. Each 3PL has its own worksheet, but the approaches are similar.
To provide a warehouse pricing quote, most third party logistics providers (3PLs) use profile worksheets. Each 3PL has its own worksheet, but the approaches are similar.
As a 3PL that provides warehousing services, we get that question a lot.
If the characteristics of the project are not changing, then the real question being asked is, “Can you lower your profit?”
Well, we could, but then we’d have little or no money to reinvest in the business.
Eventually, quality would suffer and we’d go out of business.
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.
Third 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:
Most 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 get competing carrier bids, rate comparisons are easier than those for warehousing. Trucking companies have published tariffs for services. As rates are requested, these carriers will ask about the commodity, the originating address, the destination address, and whether the product is palletized or floor loaded. With this information, carriers can reference their tariffs and quickly provide a quote.
Is your food warehouse compliant with the Food Safety Modernization Act (FSMA)?
The FSMA was signed into law in January 2011 in order to increase the FDA’s role in monitoring and policing food companies. The gist of the law is to protect the public from real and potential health scares, and it certainly impacts food logistics and food warehouses.
It’s a new year, and with it comes a new cycle for chargeback deductions. Hopefully, if previous errors do not reoccur and the wrongs have been righted, then vendors stand a better chance of warding off chargebacks for 2014.
If your primary focus in reducing chargebacks has been keeping human errors at bay, you may want to refocus efforts on the errors that can arise from an overlooked system or automated function.
We rely enormously on technology to help streamline warehouse processes and create efficiency gains, but often we take these automated processes for granted. Sure, you may encounter an occasional system bug or glitch that you can’t prevent. But what happens if there is an oversight in coding an application? What happens if a retailer updates or makes revisions to their label, paperwork, or EDI requirements and that information fails to pass on to the parties responsible for making the warehouse system changes? This kind of oversight can lead to hundreds or thousands of dollars in chargeback deductions.
To ensure that your technology continues to deliver and not present you with that surprise chargeback, conduct a periodic review of your automated and pre-programmed solutions for vendor compliance. UCC-128 label specifications and paperwork requirements may change over time. If you have these items designed to auto-map data to generate compliant labels or paperwork, it’s essential to have that mapping done correctly. A retailer can change something as small as a character length requirement of a Store/Unit number present on a label. A change this small has large consequences, in terms of chargebacks, due to the high impact of printing numerous labels.
Here are 8 technology-linked requirements for vendor compliance that would benefit from a periodic review:
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