Half your damage in transit in just a few weeks

It`s quite common to think of "damage in transit" is an inevitable part of the business and that little can be done about it. My experience is quite the opposite: 10 % of the vendors are responsible for 90 % of the damage and a couple of simple solutions can half your costs in just a few weeks.

So, why damage is a big problem for some manufacturers and is not for others?

First of all, much depends on whether manufacturer`s primary focus is brick and mortar stores or online retailers. Most of the "problematic" vendors that I dealt with designed their packaging for truckload palletized transportation and not for shipping every single item separately.

Manufacturers tend to care primarily about their own costs and since damage is rare when shipped truckloads - thinner and cheaper packaging is used. So, unless you are very vocal about packaging - some manufacturers may be unaware that something is wrong.

Secondly, certain products are much more prone to damage due to their nature. For example, chairs and barstools are frequently shipped assembled, while beds are usually shipped flat. Bulky boxes get damaged.

Thirdly, some products are just to fragile to be shipped with regular shipping methods and require special handling.

Solving the problem.
Here is a simple algorithm to quantify the problem and reduce your losses.
  1. Start with historical data. If you have a damage handling process - analyze your damage per vendor. For vendors shipping on your account - run damage reports per shipper/ vendor.
  2. Identify the biggest "contributors" and the most problematic products.
  3. Run the numbers to see how much would cost you (a) upgrading shipping method UPS->LTL or LTL->White Glove and (b) reboxing each product.
  4. Approach the manufacturers with numbers in hand and discuss the options.
In my experience, extra box with reasonable padding costs $10 per product and reduces damage to a minimum. An alternative is approximately $50 extra if shipped LTL. Obviously, reboxing is a superior option to a shipping method upgrade and should be used whenever possible.

If re-boxing is not an option - discuss extra concessions to offset cost of an upgrade.

In conclusion, reducing your damages is pretty simple and has immediate positive impact on your bottom line.

Good luck and be profitable in these stormy days.

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2 Comments:

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