Direct-to-consumer retailers spend an average of 2% – 4% of gross sales on vendor inbound freight ranking it among the top eight operational expenses. While often overlooked, supply chain management impacts:
- gross margin
- purchasing staff productivity
- inventory control
- receiving efficiency and
- fulfillment operations
Applying industry best practices can help supply chain managers improve company bottom lines and take charge of inbound vendor freight. If your company is responsible for freight, require vendors to ship collect or third party with your carriers. A well designed vendor routing guide is an important tool to manage inbound freight.
Vendors will always want to use their carrier and add freight to their invoice. We call this “prepay & add.” It’s good for the vendor improving their efficiency and their bottom line. Some companies even generate profits from outbound freight. However, it’s costly for most companies receiving freight.
Don’t let your vendors bundle freight into the cost of goods. Free freight is not always free, it’s just hidden in product costs. Ask your buyers to unbundle freight if possible and do the math. Is it really less?
Are your current LTL carriers are giving you the best deal possible? An experienced transportation consultant can help you test the waters with a competitive bid process. Make sure you do your homework; leverage volume with a few good service carriers; and, negotiate cost not discounts. You may benefit from a Buying Consortium that leverages multi-company volume to obtain economies of scale.
Kline Global (KG) provides consulting services for: domestic LTL & truckload freight; and international Air, Ocean, Warehousing & Customs. We use industry best practices to monitor and route vendor inbound freight. We make sure vendors use the lowest cost carrier and provide reliable pickup and delivery. Kline Global can help you take charge of your vendor inbound freight and optimize your supply chain saving 10-30%. To get started contact Jeff Kline.
Herschend Family Entertainment (HFE) owns, operates and manages 26 themed entertainment properties across ten states. Having multiple purchasing and receiving departments HFE wanted to leverage the transportation buying power of their goods coming into their properties, improve visibility as to where those goods were and create a vendor compliance program they could enforce. After looking at their options HFE realized their best choice was to find a company who could manage that process for them.
Today – HFE continues to rely on Jeff Kline to help manage their inbound freight. For over 10 years, Kline has protected HFE from LTL carrier general rate increases that averaged about 5% every year. Retail Planner Barbara Stanley at HFE Corporate has seen firsthand how Jeff Kline has orchestrated freight savings. According to Barbara, “while the savings have helped her budget, the main reason that HFE has such a long history with Jeff is his expertise and customer service. He is always willing to go the extra mile.”
You’re Invited to save – If you want low freight rates and a staff of experts working for you like in a Logistics department of a billion-dollar company, Kline Global can help. They can conduct a cost-free, no obligation audit of your LTL, truckload and international shipments and help your company reduce freight costs.
