We are a national distributor of material handling equipment and services. In recent years, our Internet marketing efforts have led to a significant increase in the number of less-than-truckload (LTL) orders that we must send across the country. We have found that some suppliers prefer LTL trucking arrangements that work well, while many others do not. This often leads to situations where we must work with LTL trucking firms that are not reliable in ensuring on-time and damage-free delivery of products to our diverse customer profile. What are other distributors doing to meet the challenges posed by an LTL trucking industry that offers few guarantees without charging excessive premiums?
– Ken Dickerson, Vice President Marketing & Business Development
Warehouse Equipment Inc. (Elk Grove, IL)
Ron Rechenbach: We try to avoid as many LTL shipments as possible. Our objective is to have the customer be responsible for the freight charges. One method is to have the customer select the freight company that they want to use. If there are problems with a freight company that the customer has selected, it’s easier for us to assist to solve the problem.
Duncan Murphy: Many suppliers have attractive freight rate agreements in place that can save you money. Few, if any, suppliers have mandatory freight agreements. MHEDA also has an affinity program with Yellow Freight, a company that covers the entire country. The rates negotiated are attractive, using our entire buying power for leverage. We have found service to be good. Compare the rates and service, and use what works best for you. We also rarely ship freight collect to customers. Given beneficial rates, you should be able to mark up your charges and pass the costs on to your customers at a profit, but at a discount from what they would have paid on a collect basis. In the rare case you are questioned or a freight bill copy is required, do not be bashful about making the case that you have transaction costs to cover. This includes UPS shipments. Our target, which we routinely hit, is freight recovery of 110 percent.