Issue link: https://www.e-digitaleditions.com/i/66147
not to mention the flier from the tradi- tional brick and mortar across town. "We're hearing more and more in the field from our customers that online shoppers are willing to base their buy- ing decisions on big-ticket items like ranges over a $2 difference in price, " says Newgistics Freight Services Vice President of Sales Tim Walsh, who has been working with both E&S manufac- turers and distributors for more than 20 years. "Winning ecommerce orders comes down to pennies. Guys tend to keep theirmargins to the bareminimum because they don't want to end up los- ing the sale. " So forWalsh,who's being pulledmore and more on the ecommerce side of his customers' business—thanks to tech- nologies like XML that tie freight rates directly to their customers' shopping carts—it's about helping his clients off- set the realitywith practical solutions to cut costs. And cutting costs, he says, starts with having an accurate product library, a term commonly used to refer to the thousands of SKU's housed on an ecommerce site.Red flags typically spot- ted there include incorrect freight class- es,product descriptions and the weight of certain products, says Walsh. That's where the trail typically ends for his col- league Kevin Brink when he's asked to trouble shoot billing discrepancies. Many of which,he says, are the result of the usual suspects, errors linked to freight. As the Director of Account Develop- ment, it's his job to ensure that cus- tomers are aware of the breadth of Newgistics' offerings after they've entered the fold. "This very often includes getting involved with ecom- merce integrations with dealers as well as assisting them in making sure that their customers and vendors/suppliers are shipping to themat least at cost, "says Brink. "Quite often I come across situa- tions where a dealer is expecting to pay 'X' amount for a number of shipments based on their quote or their vendor's quote through ourVendor RoutingWeb- site, and 'Y' amount is being billed to them.This is where we begin to dig into the real problem,which is almost always poor or wrong descriptions of the freight being shipped, a change in the National Motor Freight Classification (NMFC) Directory for a particular item, or unexpected accessorial charges. Tackling all three can lead to big sav- " ings for dealers of all sizes, saysWalsh, who recently helped a distributor uncover 6 percent in savings after updating its product descriptions and librarywith current freight classification information. By the end of the months- long project, which included pouring over a month's worth of shipping data, bill of lading forms and freight bills, exceptions were less than 1 percent (down from 73 percent) and savings on just this issue alone resulted in recoup- ing more than $60,000 over five months, he says. Perhaps proof that exceptions can be controlled with due diligence—which should be welcomed news for distributors that have become accustomed to eating the difference. Depending on the percentage gap between freight classes, the unexpected expense can hurt a little or a lot. Ultimately, it's up to the carrier's billing clerk—who will always bill at the high- est possible class rate when there are issues with the bill of lading, saysWalsh. "This causes misquotes by salespeople on orders and on projects that could potentially cost a dealer a bid, not to mention exceptions on freight charges. They end up being much higher than expected, resulting in underbilling the customer or freight being a much high- er percentage. " Glassware, for example, can ship any- where from Class 70 to Class 400 depending on the density. If you're not properly calculating it or are using a vague description, the Class 70 glass- ware you're shipping can end up ship- ping at Class 85 or worse—which means that glassware that cost you $100 to ship at Class 70 would cost $20.50 more to ship at Class 85, says Brink. Jump to Class 125, and there's a 73 per- cent increase to $173.60. That's why having the proper NMFC descrip- tion/code is so invaluable, say both Brink and Walsh, who also suggest updating your product library once a year, since the NMFC directory is amended a couple of times a year. There's also been a push fromcarriers to shift more products under density class tiers or base them on their pounds per cubic foot (PFC). Glassware is a great example of this, says Walsh. "Everyone knew it was either Class 70 or 92.5 based on howmuch liability you wanted the carrier to handle. Now it's based on the density. So if you have a 500-pound shipment,where the density is 6 pounds per cubic foot, the freight class is 125. " Electrical appliances,chairs and tables also have been reclassified as density items. "Tables used to be either one of two classes, which were based on whether they were knock-down tables (where the legs were detached), or if it was one solid piece, " says Brink. "Now they are a full-blown density item,which forces the shipper to knowexactlywhat type of table they are shipping based on the table's density, the material it is made out of, its dimensions, etc. Knowing all of this information upfront can prevent all sorts of billing errors. But the problem for some dealers is " either getting the updates or getting their suppliers to changewith the times. "Somany dealers ship directly fromsup- pliers and they have much more diffi- culty getting their suppliers to update their records with the correct descrip- tions and classes, "saysWalsh,who at the behest of a dealer looking to cut costs, found that one well known glass manu- facturer was still using outdated class information on its preprinted bill of lad- ing forms six months after glassware was moved under density-driven class tiers in the NMFC directory (a find that saved that customer thousands in ship- ping costs). Shift the blame to the distributor and the issue becomes the "we've always done it that way" syndrome or the incli- nation to calculate freight using histori- cal data.According toWalsh, it's a com- mon practice throughout the industry that often contributes to margin ero- sion. "What was accurate three years ago continued on page 12 May/June 201 2 1 1