Shippers use technology to mitigate chargebacks

Jeff Bezos doesn’t need more money

A whole host of big box retailers, from Walmart to Walgreens, CVS to Amazon are assessing penalties for late deliveries. It sounds to me like Jeff Bezos doesn’t need more money so let’s help him out. Shippers need to use technology to mitigate these chargebacks. Since MAP 21, coercing drivers even through threats to withhold future business is not an answer at all. The ELD capacity tightening is only making things worse. There are a lot of whys in that but let’s start with an answer first.

Plan your shipping

Plan your shipping around expected transit times. We’ll go into this further but LTL carriers publish transit times and technology can help you monitor the accuracies of those times. Truckload transit times have to be geared toward driver hours, weather and congestion. There are now inexpensive ways to track truckload transit and do historical analysis in specific lanes.

This is all presuming you can schedule production to a ship date generated by technology. Let’s say we have an LTL shipment, where stated transit time is 4 days (business days) and data shows 85% on time deliveries. The rate is $560.00. The best on time percentage is 98% but the rate is $20.00 more. Amazon charges 3% of the cost of goods (invoice value). On a $8,000 order saving $20.00 could cost you $240.00.

The math

Assuming you ship monthly to all 122 Amazon Fulfillment centers in the US:
 

Total Shipments

15% Late Order Value 3% Chargeback Total of all charge backs
1464 220 $18,000  $540.00  $118,584.00
Total Shipments 2% Late Order Value 3% Chargeback Total of all charge backs
1464 29 $18,000  $540.00  $15,811.20
Total Shipments Additional Freight Charges @ $20.00 each Savings with on time carrier
1464  $29,280.00  $73,492.80
However, Amazon only assesses the outside delivery window charge if your trailing four week average is below 90% so in effect you could save the entire $118,584.00 by using a more reliable carrier.

 

So how do you get reliability percentages easily

So how do you get reliability percentages easily and automatically? ShippersEdge TMS will give them to you and they can be viewed manually or incorporated into business rules f and used with automated tendering.

All the major retailing chains have added late delivery chargebacks to their arsenal. Just having an easy way to create delivery reports that show the delivery date vs. the delivery window requested can aid in dispute resolution. Getting carrier information into your ASNs is another thing a TMS can assist you with. By knowing transit times and reliability metrics, a TMS can tell you when to ship, with whom to ship and give you the data to make informed objective decisions.

A TMS can also record weather related delays, track full truckloads and create alerts for situations where an appointment can’t be met. Some missed appointment charges can run $350.00. Integrating with cell phone tracking is made for a TMS to point out problems before they become bottom line events.

Contact ShippersEdge at 952-777-4421 or visit us on the web at www.shippersedgetms.com

 

 

 

Intermodal not Answering the Call

As our national capacity crunch deepens with the ripening of a growing season in the south many people thought that intermodal capacity would be the answer to a capacity shortage. The real answer is not what people were expecting at all. The ELD mandate has struck intermodal in regards to drayage both for international container shipping and domestic traffic.

On the international side, long dwell times at ports and highly congested urban freeways abuses drivers and lax enforcement of hours of service before ELDs masked a problem that is now exposed. With the Panama Canal’s lack of immediate success, it may be possible that the intermodal drayage capacity crunch finally makes less congested ports a viable option.

What is happening on both the domestic and international side is that the consumption of driver hours is pushing what was theoretically a one day round trip on drayage in the 200-250-mile range into two day trips given the max duty time of 14 hours. This consumes equipment if not just the driver’s wages. You have to think about the fact that intermodal equipment is more finite and any consumption in terms of trailer days will affect the entire intermodal eco chain.

There are no easy quick fixes

Presuming the amount of intermodal conveyances, be it container or trailer can be increased, you still have to increase the number of seated tractors. There are no easy quick fixes.

Strangely enough, embargoing shipments with long drayage miles may actually help save intermodal. That will probably be done by strategic pricing, at least in domestic truckload side. The intermodal companies could effectively embargo certain points through pricing for being too far from an intermodal facility to be able to be serviced within a driver’s effective and now monitored duty cycle.

Adding intermodal capacity is an expensive proposition

The intermodal trailers also need intermodal rail cars and locomotives. These are large capital expenditures just waiting for the next recession. At some point, you also need to enlarge and enhance ramp facilities. Frankly, getting drivers should be the easy part simply because the drivers are typically home each night.

America is greening from the bottom up right now and expect things to get much worse when it comes to pricing and capacity before it gets better. The growing season always makes things tight in the seasonal states but doubtful you’ve seen anything like the crunch that’s lurking. Unfortunately, intermodal is not a near term answer.

ShippersEdge TMS can help manage all types of capacity www.shippersedgetms.com or call 952-777-4421