From lo-fat yogurt to no-fat, Greek to Icelandic, all-natural to organic, consumer demands are creating more choice at the grocery case than ever. Meeting that demand has increased the need for smaller, more frequent shipments and increased traffic at receivers’ docks. To manage it, receivers have imposed strict terms on suppliers that make compliance difficult and often result in fees or chargebacks.
Penalties can be assessed for a multitude of reasons: changing or missing a delivery appointment, improper palletizing, incorrect product labeling, even the quality of pallets. And these fines can really add up. According to McKinsey & Company*, “Penalties could add up to more than $5 billion a year across the US, if the consumer packaged goods sector doesn’t improve its current delivery performance.”
Transporting LTL frozen and refrigerated shipments with multiple pickups and deliveries makes adhering to these rules more challenging.
Even worse, fees and chargebacks aren’t discovered until months later in the accounting department. Sometimes these fines don’t appear as chargebacks, but payment is cut back, often without explanation. To figure out what went wrong, accounting, logistics and sales have to work backwards through the process.
Avoiding these costs altogether may not be possible but there are ways to help reduce them and save your bottom line. Understanding the expectations upfront and communicating them to everyone involved from start to finish can help.
Know receiver requirements
Many times receiver requirements are hidden in fine print. Careful scrutiny upfront can help reduce fees. Work with a 3PL who understands receivers’ demands and has a consistent track record of compliance. This knowledge can save you a lot of headaches.
Build in flexibility
Knowing the details upfront allows your 3PL to set more doable, manageable schedules. This is particularly critical for LTL food or food ingredients shipments. Some receivers will charge a fee for early delivery. If you have a small window, ask receivers for leeway. Setting these expectations will help reduce logistics costs.
Check all shipments
Check and double-check shipments before they go out the door. Making sure all documentation is in order will reduce logistics chargebacks.
Forewarn your carriers
Communicate the challenges and potential repercussions with carriers ahead of time. Having a plan that builds in time to respond, communicating regularly and confirming status each step of the way can prevent penalties.
Verify compliance upon delivery
Contact the receiver directly if possible to ensure all terms were met. Keep track of any changes in delivery appointments. Don’t wait until payment is made to discover a surprise fine.
COMPLYING WITH RETAILERS’ STRICT RULES IS ANOTHER OBSTACLE TO REDUCING LTL SHIPPING COSTS. TRADEMARK KNOW-HOW CAN HELP.
CONTACT US. 800-646-2550
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Trademark provides an unbroken chain of cold. With a clear understanding of all requirements upfront, real time monitoring and ongoing communication, we ensure your shipments are on time, intact, on budget with no surprises.
