Dear CEO: Shipping Matters.…a Lot

A Case for the Front Office Getting a Crash Course in Shipping

Most company leaders and top managers are incredibly busy people, so they strive to delegate the details whenever they can.

That’s logical enough, but here’s a key concern about delegating responsibility before truly comprehending the details: A lack of thoroughly understanding the issues can cost you dearly down the road.

Shipping, of course, is what I’m getting at here.

As the president of Zip Xpress Inc., it’s naturally my main concern, and there’s nothing I’d like better than to have company CEOs and presidents over for a visit to our facility. There’s so much to learn about hiring a high-quality carrier for a product line, and I love talking the business.

Unfortunately, many of the key leaders in a company are uninformed about their own shipping partners and the many ways they can be overpaying for freight, time after time, mile upon mile down the road. Paying top dollar for a so-called “full truckload” – when it’s not! – is central to this issue.

Not even on your radar?

As a leader and key decision-maker in your company, maybe shipping’s not really on your business radar because it’s not one of your biggest budget concerns. For your overall bottom line, though, it deserves attention.

Let’s say you’re the CEO of an up-and-coming office furniture manufacturer, of which there are many here in West Michigan, where Zip Xpress is based. Let’s imagine that your shipping department is only a small concern in the complex web of responsibilities that you shoulder every day.

Even when they may seem pricey at times, the rates you pay to move your product are a relatively small part of operational costs. Right?

And if the rates seem high for out bounding your product, well, you’re probably going to pass those costs along to the customer at some point and even raise your product prices when shipping starts to hurt your bottom line. Right?

True enough, all of this.

But it’s only part of the story.

I’m inviting you to educate yourself better on how your product gets to your customers.

Try this … try coming to work in jeans one day. Grab some work gloves to do some hands-on analysis of your packaging and shipping departments. Many of you will learn quickly about these pivotal and negative experiences that could be costing your company dearly:

  • a shipping department priority of getting the product out the door, with inadequate concern for the high cost of inefficient loading practices
  • wasteful protective packaging that add costs and slows down shipping
  • carriers that are lined up at your docks, waiting their turn and wasting precious drive time
  • cheapest-rate carriers mishandling precious cargo from the minute they pick it up until it’s shuffled through transfer points … where it’s potentially mishandled or incorrectly routed
  • costly “truckload” rates being charged for product that could easily be optimized into less expensive “partials”
  • carriers at your dock who are basically strangers because your shipping manager constantly switches to whoever is touting the cheapest bid
  • time-sensitive materials that repeatedly cost extra to ship … yet still arrive late and damaged

Now I’m hoping it’s a little clearer how counterproductive bad shipping can be for a business.

Companies enjoying Zip’s fully optimized services

More than a dozen firms that ship regularly with Zip Xpress have been taking advantage of our extremely thorough optimization process for loading and out bounding product. Just a few of those companies enjoy on-time, damage-free, cost-saving carrier services include:

Shippers can’t win just by cheapest bidder

In all fairness, many of the shipping headaches I’ve described are out of the control of the CEO or top management, and they have been plaguing the supply chain for years. But there are a few carriers out there who are tackling the issues and passing along cost savings to their customers.

You didn’t invent this inefficient system that’s still lagging badly, in terms of innovation. Shipping department managers are constantly hamstrung by a lack of efficient, timely, optimizing carriers in the marketplace.

A full-service, logistics-oriented 3PL, for instance, should include aggressive and conscientious optimization procedures. Instead, too many 3PLs give lip service to optimizing but send trailers on their way that are anything but “full.”

The good news is … things are changing. Slowly, but they are.

When a furniture maker or a robotics firm or an auto supplier needs to move product, smarter shipping options are emerging. True load optimization is getting more industry attention than ever, but even with the right software programs and the latest equipment, the proper training of loading crews remains a central piece of the modernization puzzle.

It’s about time we got serious about all this.

Let’s reject the slap-dash attitude of simply shoving stuff into a trailer, charging the shippers a truckload rate, and then just passing along the costs to you-know-who.

As always, the consumer pays in the end, and today’s well-informed CEO will recognize that outdated, overpriced shipping behaviors simply erode customer satisfaction and negatively impact overall sales.