parcel ltl/ftl air freight ocean freight … · afms employees all previously worked for fedex,...

PARCEL

LTL/FTL

AIR FREIGHT

OCEAN FREIGHT

RAIL/INTERMODAL

afms.comAFMS - Confidential

Over 2,500 Clients Globally

2


Overview

3

1992

12

2,500

45

14

$2.5bn

65

Founded by Mike Erickson CEO - One of the countries Leading Logistic Consulting Firms

Consults Shippers on how to secure the best shipping contracts globally. (Parcel, LTL, FTL,

Rail, USPS, & Air & Ocean Freight)

We serve our clients from offices in twelve US regional locations, Canada (Toronto) & Europe.

Head quarters located in Portland Oregon

The number of professionals we employ across our international office network, consists of

over 500 years combined experience

Number of countries where we currently have clients - International Expertise including

Canada, Europe & Asia

Current number of clients who have used AFMS services globally. Expertise Includes:

Contract Negotiation, Pre Bid Auditing, Bid Strategy, Design & Processing, Advanced

Analytics, Benchmarking, Implementation & Execution of New Contracts

AFMS Employees all previously worked for FedEx, UPS, DHL, TNT, UTi, CEVA, FTL/LTL

Carriers, other freight forwarders, VOCC’s & NVOCC’s & Intermodal/Rail carriers

Over $2.5 Billion saved in shipping costs for over 2,500 clients. Specializing in global

transportation spends in excess of $50 million.


AFMS Global Shipping ExpertsOver 650 Years of Carrier Experience

4


Mine & AnalyzeShipment Billing & Invoice Data

Carrier Electronic Billing / Invoice Data Solutions:

UPS Billing Center: http://www.ups.com/content/us/en/bussol/browse/billing.html

FedEx Billing Online: http://www.fedex.com/us/fcl/pckgenvlp/online-billing/billing.html

5

ANALYZE parcel invoice data to better understand service usage, expenditures,

accessorial charges and other variables. Objective: To develop a list of

Opportunities & Priorities to be negotiated to generate the greatest cost savings

impact.

IDENTIFY “accessorial” charges - like Delivery Area Surcharges, Fuel Surcharges,

Weekly Service Fees, Large Package Surcharges, Additional Handling.

Service charges and the like - now account for as much as 30% of a shipper’s overall costs.

QUANTIFY which surcharges have the greatest cost impact on your business and

target those for waivers or reductions.

In addition to pursuing lower accessorial charges, of course,

try for better overall discounts and contract terms.

http://www.fedex.com/us/fcl/pckgenvlp/online-billing/billing.html

afms.com6


Competition for the business / Sales Reps Commission Impact

Total revenue on the account

Sensitive - Damageable Freighti.e. Electronics/TV’s

Automated vs. Paper bills of lading

Multiple pickup locations & Delivery Density

Carrier equipment / Labor required

Zip codes delivered to:

Volume by service level

Size of your boxes (Dimensions)

Top 10 Parcel Pricing VariablesThat Determine Your Discounts

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Weights of packages / Zone Distribution1

2

3

4

5

6

7

8

9

10

A) Ground - Commercial/ResidentialB) AirC) International

Good Zip Codes9,800 Zips

Unprofitable Zip Codes32,000 Zips

A) 100% incumbentB) Split businessC) New opportunitiesD) Impact on Commissions +/-


UPS, FedEx & DHLSales Commission Plans

8

The carriers sales teams can potentially earn up to

30% of their salary in commission

based on the yearly corporate sales / revenue goals

Current Average (All combined Clients)

Net Cost per Package

ServicesCurrent Average

Revenue per Piece

2017 Corporate Sales

Goals for Commission

Ground $8.50 $8.93

Air AM $38.00 $39.90

Air PM $25.00 $26.25

2 Day Air $12.00 $12.60

International $24.50 $25.73

Corporate Sales Goal Commission

5% HIGHER


North America Shipping Activity Profile

9

Service SummaryService Shipments % of Total Cost % of Total Weight Avg. Weight Avg. Cost Avg. Zone

Ground 277,348 82.2% $2,745,606.84 61.3% 1,556,128 5.6 $9.90 6.08

Next AM 6,964 2.1% $289,982.56 6.5% 35,960 5.2 $41.64 6.13

Next PM 6,120 1.8% $189,630.40 4.2% 21,016 3.4 $30.99 6.13

Second Day 28,340 8.4% $659,283.84 14.7% 311,764 11.0 $23.26 5.96

3rd Day 2,056 0.6% $33,559.68 0.7% 10,036 4.9 $16.32 7.48

Air Total 43,480 12.9% $1,172,456.48 26.2% 378,776 8.7 $26.97

International 16,588 4.9% $557,759.28 12.5% 74,120 4.5 $33.62

Grand Total 337,416 $4,475,822.60 2,009,024 6.0 $13.26

Service Summary by Weight

Weights Zone 2-8 AK/HI Canadian Other Next AM Next AK/HI Next PM 2nd Day 2nd AK/HI 3 Day Shipments %

Letter 0 0 0 804 2,312 0 1,696 612 0 0 5,424 1.7%

1 lb 57,836 0 4,760 3,748 1,020 0 672 3,864 0 1,376 73,276 22.9%

2 lbs 75,700 0 1,108 728 452 0 712 352 0 148 79,200 24.8%

3 lbs 60,968 0 444 572 740 0 1,752 1,164 0 32 65,672 20.6%

4 lbs 11,560 0 644 92 116 0 32 888 0 20 13,352 4.2%

5 lbs 12,488 0 584 200 200 0 396 876 0 16 14,760 4.6%

6 lbs 6,944 0 276 72 92 0 116 224 0 44 7,768 2.4%

7 lbs 4,300 0 244 36 56 0 48 240 0 28 4,952 1.6%

8 lbs 3,728 0 248 84 140 0 68 628 0 84 4,980 1.6%

9 lbs 2,632 0 56 20 112 0 28 132 0 8 2,988 0.9%

10 lbs 3,908 0 128 16 48 0 0 92 0 16 4,208 1.3%

11-15 lbs 12,804 0 396 44 376 0 196 764 0 56 14,636 4.6%

16-20 lbs 4,608 0 160 136 108 0 128 528 0 12 5,680 1.8%

21-25 lbs 12,936 0 652 16 168 0 24 44 0 44 13,884 4.3%

26-30 lbs 2,772 0 136 20 152 0 12 112 0 20 3,224 1.0%

31-40 lbs 1,736 0 60 8 160 0 24 16 0 20 2,024 0.6%

41-50 lbs 816 0 24 4 40 0 28 20 0 8 940 0.3%

51-60 lbs 1,016 0 4 16 12 0 8 0 0 4 1,060 0.3%

61-70 lbs 204 0 4 4 16 0 4 0 0 4 236 0.1%

71-80 lbs 24 0 0 0 0 0 0 0 0 0 24 0.0%

81-90 lbs 84 0 0 0 0 0 0 12 0 0 96 0.0%

91-100 lbs 36 0 0 0 4 0 0 0 0 0 40 0.0%

101-200 lbs 20 0 12 8 16 0 4 140 0 0 200 0.1%

200-500 lbs 200 0 12 8 0 0 4 304 0 12 540 0.2%

501+ lbs 28 0 0 0 0 0 0 164 0 0 192 0.1%

Total 277,348 0 9,952 6,636 6,340 0 5,952 11,176 0 1,952 319,356

Percentage 87% 0% 3% 2% 2% 0% 2% 3% 0% 1% 100%

Cost $2,745,606.84 $0.00 $225,957.40 $331,801.88 $289,982.56 $0.00 $189,630.40 $659,283.84 $0.00 $33,559.68 $4,475,822.60

International TotalGround Air

UPS Summary - Annualized

Service Summary by Weight


UPS GroundCommercial Package Analysis

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Weights Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 AK/HI Total

1 lb 2,744 1,364 7,700 9,148 7,588 15,400 13,892 0 57,836 20.85%

2 lbs 3,116 2,412 9,740 9,980 10,824 17,504 22,124 0 75,700 48.15%

3 lbs 2,512 1,924 7,228 7,296 9,172 14,716 18,120 0 60,968 70.13%

4 lbs 492 364 1,380 2,168 1,884 2,644 2,628 0 11,560 74.30%

5 lbs 500 552 1,964 2,348 1,716 2,520 2,888 0 12,488 78.80%

6 lbs 340 348 1,056 1,052 740 1,468 1,940 0 6,944 81.30%

7 lbs 176 124 532 784 500 1,072 1,112 0 4,300 82.85%

8 lbs 180 60 508 660 580 724 1,016 0 3,728 84.20%

9 lbs 104 116 432 540 388 476 576 0 2,632 85.15%

10 lbs 248 80 968 724 324 712 852 0 3,908 86.56%

11-15 lbs 716 432 1,984 2,224 1,536 3,024 2,888 0 12,804 91.17%

16-20 lbs 204 116 920 880 544 876 1,068 0 4,608 92.83%

21-25 lbs 540 256 1,748 2,308 1,520 3,196 3,368 0 12,936 97.50%

26-30 lbs 216 64 416 592 320 504 660 0 2,772 98.50%

31-40 lbs 124 152 316 220 224 368 332 0 1,736 99.12%

41-50 lbs 44 68 160 176 104 108 156 0 816 99.42%

51-60 lbs 36 100 272 228 92 108 180 0 1,016 99.79%

61-70 lbs 8 24 8 76 56 28 4 0 204 99.86%

71-80 lbs 0 4 0 8 4 4 4 0 24 99.87%

81-90 lbs 16 4 28 0 0 24 12 0 84 99.90%

91-100 lbs 0 8 8 8 8 0 4 0 36 99.91%

101-200 lbs 0 4 0 0 4 8 4 0 20 99.92%

200-500 lbs 4 12 16 44 24 32 68 0 200 99.99%

501+ lbs 4 0 16 8 0 0 0 0 28 100.00%

Total 12,324 8,588 37,400 41,472 38,152 65,516 73,896 0 277,348

Percentage 4% 3% 13% 15% 14% 24% 27% 0%

Cost $ 98,670.72 $ 73,460.40 $ 334,390.48 $ 390,023.20 $ 372,466.76 $ 664,031.32 $ 812,563.96 $ 0.00 $ 2,745,606.84

Total Weight 85,148 56,816 242,236 267,620 194,388 331,048 378,872 0 1,556,128

Avg Weight 6.91 6.62 6.48 6.45 5.10 5.05 5.13 0.00 5.61

Avg Cost $ 8.01 $ 8.55 $ 8.94 $ 9.40 $ 9.76 $ 10.14 $ 11.00 $ 0.00 $ 9.90

Cumulative %

Ground


Accessorial ReportAdd-On Charges

11

Accessorial add-on’s typically represent 25%-30% of your total spend


Domestic Price BenchmarkingUPS/FedEx Target Pricing Analysis

12


Sample FedEx Invoice

13


OverviewDeferredAgreements

• Minimum Weight Shippers Beware

Early TerminationAddendum• You Have the Right to Remain Silent

Actual versus Billed Weights• Avoiding the Dim

• Shipping Charge Corrections

Minimums• Ground &Air

Minimum Billable Weight• What Is This?

Other ‘Getchas’• IT Constraints

• Late Payment Fee

• Ramping Up

• Fuel Impact

• General Rate Increase

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Rebates / Deferred AgreementsSummary Level Deferred Tier

The Customer will receive an additional incentive (not including Fuel Surcharges paid) subject to all applicable minimums in this or other

agreements per the following schedule based on a 52 week rolling average of eligible packages tendered to UPS. The band determination is

based on the average net transportation charges per week (excluding accessorials and surcharges, unless otherwise specified). The

incentives will be administered on a quarterly basis. Within thirty (30) days after the end of the period, UPS will issue a single check to the

Customer representing the total amount of the additional incentive(s) earned, if any.

The following products will be included in determining the appropriate bands of the customer. Service(s) listed in Group(s) All Small

Package Freight, All International Import, All UPS Ground with Freight Pricing of the Committed Services section at the end of the

Addendum B.

Zone Bands ($) Amount Off

0.01 - 14,765.9914,8766.00 -

18,172.9918,173.00 and up

ALL 0.00 40,000.00 45,000.00

Summary Level Deferred Tier

The Customer will receive an additional incentive off net transportation charges (not including Fuel Surcharges paid) subject to all

applicable minimums in this or other agreements per the following schedule based on a 52 week rolling average of eligible packages

tendered to UPS. The band determination is based on the average net transportation charges per week (excluding accessorials and

surcharges, unless otherwise specified). The incentives will be administered on a quarterly basis. Within thirty (30) days after the end of the

period, UPS will issue a single check to the Customer representing the total amount of the additional incentive(s) earned, if any.


Package Freight, All International Import, All UPS Ground with Freight Pricing of the Committed Services section at the end of the

Addendum B.


0.01 - 25,499.99 25,500.00 and up

ALL 0.00% 1.50%

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Rebates / Deferred AgreementsImpact of Minimum

Packages that hit the minimum will contribute to the deferred

rebate revenue tier calculations.

The minimum language stipulates the rebate amount will not

be paid on these packages.

Subject to all applicable minimums

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Deferred AgreementsExample of Impact

Rebate

4.8% Rebate on Net Spend

Net spend with all transportation spend included - $667,106.05

Net spend with min removed - $536,205.85

Expected rebate - $32,021.09

Actual rebate - $25,737.88

$

Expected

Rebate

$17


Deferred AgreementsChange of Verbiage

Summary Level Deferred Tier

The Customer will receive an additional incentive per the following schedule based on a 52 week rolling average of eligible packages

tendered to UPS. The band determination is based on the average base transportation charges per week (excluding accessorials and

surcharges, unless otherwise specified). The incentives will be administered on an annual basis. Within thirty (30) days after the end of the

period, UPS will issue a single check to the Customer representing the total amount of the additional incentive(s) earned, if any.


Package Freight of the Committed Services section at the end of the Addendum B.


0.01 - 59,999.99 60,000.00 and up

ALL 0.00 150,000.00

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Early Termination Addendum

1. Early Termination Fee. If Customer terminates this Agreement prior to its expiration, UPS reserves the right to assess an Early

Termination Fee based on a percentage of the total payments made to UPS during the 52 weeks immediately preceding termination.

The percentage will be determined based on the following schedule.

Weeks 1 through 104 2.00%

Weeks 105 or more 0.00%

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1. Early Termination Fee. If Customer terminates this Agreement prior to its expiration, UPS reserves the right to assess an Early

Termination Fee in the amount of two and one half percent (2.5%) of the total charges billed to Customer by UPS under this agreement

during the fifty two (52) weeks previous to Customers notice of termination. Customer agrees that the incentives provided herein will

not be made negotiable during the term of this Agreement.

Customer agrees that the incentives provided herein will

not be made negotiable during the term of this agreement.

20



Early Termination Fee. If Customer terminates this Agreement prior to its expiration, UPS reserves the right to assess an Early

Termination Fee in the amount as stated in the schedule below, of the total payments made to UPS during the 52 weeks immediately

preceding termination.

Agreement Year Percentage

2015 3.0%

2016 2.5%

2017 2.0%

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Early Termination AddendumImpact

2.5% Penalty on Total Charges Billed to Customer

Total Charges Billed for 52 Weeks- $1,560,794.77

Penalty - $39,019.87

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Actual versus Billed Weights

LxWxH/166 (Domestic) - NEW 2017 = 139

LxWxH/139 (International)

Air: All Shipments

Ground: All Shipments

UPS Service Guide 2016

23


= 960

Dimensional Weight Example

24

True Scale Weight= 4 lbs.

12”

8”10”

2016

10 x 8 x 12166

= 5.8(or 6 lbs.)

2017

= 96010 x 8 x 12139

= 6.9(or 7 lbs.)

2017 vs. True Scale Weight43% Increase over original weight

2016 vs. 201715% Increase over 2016


Actual versus Billed WeightsShipDate BilledWeight OriginalWeight ServiceLevel ChargeName

1/29/2015 0:00 90 30 Ground Res GROUND RESIDENTIAL THIRD PARTY




2/3/2015 0:00 21 5.8 Ground Res GROUND RESIDENTIAL THIRD PARTY




22.3 lbs. 30 lbs.

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Actual versus Billed WeightsShipping Charge Corrections

ShipDate BilledWeight OriginalWeight ServiceLevel ChargeName

9/18/20150:00 4 3 GroundCom SHIPPING CHARGE CORRECTION GROUND


9/18/20150:00 24 22 GroundRes SHIPPING CHARGE CORRECTION GROUND



9/17/20150:00 26 22 GroundRes SHIPPING CHARGE CORRECTION GROUND

26


Actual versus Billed WeightsHow to Avoid the Dim Charges

27

How to Avoidthe Dim Charges


Minimums

2016 FedEx Ground/Home Delivery Minimum• $6.94

• Minimum net package charge you will pay without reduction

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Minimum Package Charge: For each package, Customer agrees to pay the greater of the net package charge based on Customer’s

discounts, if any, for given service or the minimum net package charge as defined below.

The minimum net package charge will be the base rate defined for the service for the zone(s) and weight(s) shown or the rate per package

shown below.

Service(s) Package Type(s) Minimum Net Package Charge

Continental US Ground 3P Zone 2, 1 Pound

Continental US Ground 1B Zone 2, 1 Pound


Minimums

2016 UPS Ground Minimum

• $6.94

• Minimum net package charge you will pay without reduction

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Minimum Net Charge

For each shipment, Customer agrees to pay the greater of the (a) net shipment charge based on the above incentives or (b) the minimum

net shipment charge.

Service Minimum

Per

Zone Base Rate

UPS 3 Day Select Package Service Package ALL UPS 3 Day Select Zone 302 1 lb

UPS Ground Commercial Package ALL UPS Ground Zone 002 1 lb

UPS Ground Residential Package ALL UPS Ground Zone 002 1 lb


Older Agreement (circa 2008)

• Flat Charge

Current Agreement• Reduction off Zone 2 minimum

billable weight

30

Zones => 2 3 4 5 6 7 8 9 13-16

1+ lbs. % 53.00 53.00 53.00 53.00 53.00 53.00 53.00 53.00 53.00

Minimum Charge $ 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00

FedEx Standard Overnight

Zones => 2 3 4 5 6 7 8 9 9-10 11-12 13-16

1+ lbs. % 34.00 34.00 34.00 34.00 34.00 34.00 34.00 34.00 34.00 34.00 34.00

Minimum Charge $ 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

FedEx 2Day

Zones => 2 3 4 5 6 7 8 9 13-16

1+ lbs. % 62.00 62.00 62.00 62.00 62.00 62.00 62.00 62.00 62.00

Minimum Reduction Amount 12.85 12.85 12.85 12.85 12.85 12.85 12.85 12.85 12.85

FedEx Standard Overnight

Zones => 2 3 4 5 6 7 8 9 13-16

Envelope % 40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00

Minimum Reduction Amount 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50

FedEx 2Day AM Envelope

Unless otherwise stated, the Minimum Charge is the list rate for the minimum billable weight in zone 2.

Unless otherwise stated, the Minimum Charge is the list rate for the minimum billable weight in zone 2.


Minimums - UPS Air

31

Minimum Net Charge



Service Minimum

Per

Zone Base Rate

UPS 3 Day Select Package Service Package ALL UPS 3 Day Select Zone 302 1 lb

Minimum Net Charge



Service Minimum

Per

Zone Base Rate Adjustment

UPS Next Day Air®- Letter - Prepaid Frt Letter ALL UPS Next Day Air® Zone 102 -10.25

UPS Next Day Air®- Package - Prepaid Frt Package ALL UPS Next Day Air® Zone 102 1 lb -13.30

UPS Next Day Air Saver®- Letter - Prepaid Frt Letter ALL UPS Next Day Air Saver® Zone 132 -10.25

UPS Next Day Air Saver®- Package - Prepaid

FrtPackage ALL UPS Next Day Air Saver® Zone 132 1 lb -11.50

UPS 2nd Day Air A.M.®- Commercial Letter -

PrepaidLetter ALL UPS 2nd Day Air A.M.® Zone 242 -7.30

UPS 2nd Day Air A.M.®- Commercial Package -

PrepaidPackage ALL UPS 2nd Day Air A.M.® Zone 242 1 lb -7.30

UPS 2nd Day Air®- Letter - Prepaid Frt Letter ALL UPS 2nd Day Air® Zone 202 -6.18

UPS 2nd Day Air®- Package - Prepaid Frt Package ALL UPS 2nd Day Air® Zone 202 1 lb -6.15

UPS 3 Day Select®- Package - Prepaid Frt Package ALL UPS 3 Day Select® Zone 302 1 lb -1.00


Minimums - Reduction

32

Service(s) Package Type(s) Minimum Net Package Charge $ Decrease from Base Rate

FedEx Home Delivery 3P Zone 2, 1 Pound $0.40

FedEx Home Delivery OB Zone 2, 1 Pound $0.40

UPS®Ground - Commercial Package - Prepaid Package ALL UPS Ground Zone 002 1 lb -12.00%

UPS®Ground - Residential Package - Prepaid Frt Package ALL UPS Ground Zone 002 1 lb -12.00%

UPS®Ground - Commercial Package - Prepaid Package ALL UPS Ground Zone 002 1 lb -0.40

UPS®Ground - Residential Package - Prepaid Frt Package ALL UPS Ground Zone 002 1 lb -0.40


Minimum Billable Weight

Applies to all Domestic and International Air shipments

packaged in a FedEx Express Box or Tube

Own Packaging = DIM

FedEx Packaging = MBW

33


Minimum Billable Weight

A Minimum Billable Weight of 2 lbs. applies to the FedEx Small Box,

FedEx Medium Box, FedEx Large Box, and FedEx Extra Large Box for

U.S., U.S. Export, and U.S Import-rated shipments

A Minimum Billable Weight of 7 lbs. applies to the FedEx Tube for U.S.

shipments

A Minimum Billable Weight of 9 lbs. applies to the FedEx Tube for U.S.

Export and U.S. Import-rated shipments

34


Minimum Billable WeightImpact Box

Actual weight 1lb

Billed weight 2lbs

Standard Overnight Zone 6

1lb List Rate = $52.42

2lbs List Rate = $59.19

Over 11% increase per package

35


Actual weight 1lb

Billed weight 7lbs

Standard Overnight Zone 6

1lb List Rate = $52.42

7lbs List Rate = $88.74

Over 40% increase per package

Minimum Billable WeightImpact Tube

36


Other ‘Getchas’

37

Late Payment Fee

IT Constraints

Ramping Up

Fuel Impact, Monthly Rate Changes Vs. 2017 Weekly

General Rate Increase 5%, Bill 3rd Party Fees 1.5%


Fuel Impact

Service/Level Current Spend Negotiated Spend Savings %

Ground Residential $ 882,161.60 $ 810,074.85 $ 72,086.76 8.2%

Residential Delivery Fee $ 255,143.07 $ 208,636.61 $ 46,506.46 18.2%

Ground Commercial $ 168,397.65 $ 152,382.43 $ 16,015.22 9.5%

Additional Handling $ 127,018.13 $ 110,082.37 $ 16,935.75 13.3%

2nd Day Air $ 82,780.29 $ 73,543.92 $ 9,236.37 11.2%

Fuel Surcharge $ 79,130.74 $ 70,825.04 $ 8,305.70 10.5%

Delivery Area Surcharge $ 53,119.30 $ 40,620.13 $ 12,499.18 23.5%

Returns Ground $ 46,475.26 $ 43,580.23 $ 2,895.03 6.2%

Next Day Air $ 38,249.97 $ 36,567.83 $ 1,682.14 4.4%

Next Day Air Saver $ 30,920.83 $ 29,553.81 $ 1,367.02 4.4%

3 Day $ 26,779.29 $ 22,617.21 $ 4,162.08 15.5%

Other Charges $ 25,771.20 $ 25,703.01 $ 68.19 0.3%

TOTALS $ 1,815,947.31 $ 1,624,187.43 $ 191,759.88 10.6%

38

afms.comAFMS - Confidential39


General Rate Increase

40


Key Takeaways

Deferred Agreements• Consider the Impact of the Minimum

Early Termination Addendum• Verify, then Verify again, Verbiage

Actual versus Billed Weights• Attack the Data, Not the Dim

Minimums• Discount Offered versus Discount Received

Minimum Billable Weight• 65% rate increase difficult to absorb and/or pass through

41

afms.com42


LTL/FTL Regional / NationalCarrier Analysis

43

Review current pricing agreement analysis

Conduct LTL/FTL shipment profile

Rate base analysis

Actual class / FAK analysis

Cost/pricing analysis by carrier

Align Carrier service strengths to shipping & receiving locations

1

2

3

4

5

6


Additional add-on cost, Minimums,Inside vs. Outside delivery

Competition, Existing business vs. New business

Head haul vs. Back haulLong distance vs. Short haul

P & D Cost, Drivers wages, Fuel, Insurance, MaintenanceAvg. $120/hr (FedEx Non Union $23.82, YRC Union $22.08)

Pickup zip codes, Length of haul & Delivery zip codes.(Distance from terminal)

Stackable OR Not Stackable

Number of palletsPicked up & Delivered

Weight of pallets

Product Density, Dimensions

Top 10 LTL Pricing VariablesThat Determine Your Trucking Pricing

44

Class of products shipped(Value of products, Damageable Freight)Laptops Vs. Nuts & Bolts

1

2

3

4

5

6

7

8

9

10

AFMS Industrial Engineered Costing Models


Collect All Carrier Agreements

45


Summarize LTL Carriers Shipping DataIn Easy to Follow Format

46

Total Monthly Savings 20.1%; $12,382


LTL Cost Analysis

47

Shipment Statistics YTD 2014Total Shipments 3,713

Total Weight 3,173,077

Total Handling Units 20,691

Total Charges 1,585,224$

Outbound Shipments 1,902

Outboud Weight 1,059,883

Outbound Handling Units 3,457

Outbound Charges 605,436$

Inbound Shipments 1,777

Inboud Weight 2,079,182

Inbound Handling Units 17,122

Inbound Charges 961,550$

3rd Party Shipments 34

3rd Party Weight 34,012

3rd Party Handling Units 112

3rd Party Charges 18,238$

VOR Analysis YTD 2014Total Charges 1,585,224$

Variable Operating Ratio 35.35

Variable Cost 551,656$

Projected RFP Charges 582,344$

Savings 563,799$

% Savings 33.7%


LTL Monthly Savings Report

48

Pro Number Ship Date Weight Net FRT Chg FSC Accessorials Total Cost Old Discount Old Net B4 FSC FSC % Old FSC Old Total Cost Savings

3341769756 9/30/2014 305 104.46$ 26.64$ -$ 131.10$ (566.80)$ 188.93$ 25.5% 48.18$ 237.12$ 106.02$

3341776793 9/30/2014 355 104.46$ 26.64$ -$ 131.10$ (463.60)$ 154.53$ 25.5% 39.41$ 193.94$ 62.84$

3341776922 9/30/2014 358 92.86$ 23.68$ -$ 116.54$ (340.67)$ 113.56$ 25.5% 28.96$ 142.52$ 25.98$

3341776804 9/30/2014 510 104.46$ 26.64$ -$ 131.10$ (526.13)$ 175.38$ 25.5% 44.73$ 220.10$ 89.00$

3117475465 9/30/2014 522 92.86$ 23.68$ -$ 116.54$ (366.21)$ 122.07$ 25.5% 31.13$ 153.20$ 36.66$

3117468874 9/30/2014 535 147.16$ 37.53$ -$ 184.69$ (849.01)$ 283.00$ 25.5% 72.17$ 355.18$ 170.49$

3117467382 9/30/2014 566 104.46$ 26.64$ 99.35$ 230.45$ (493.19)$ 164.40$ 25.5% 41.92$ 305.67$ 75.22$

3347805624 9/30/2014 654 107.26$ 27.35$ -$ 134.61$ (618.80)$ 206.27$ 25.5% 52.60$ 258.86$ 124.25$

3341769745 9/30/2014 1,125 336.49$ 85.81$ -$ 422.30$ (1,941.29)$ 647.10$ 25.5% 165.02$ 812.12$ 389.82$

3347805602 9/30/2014 1,260 246.15$ 62.77$ -$ 308.92$ (1,420.10)$ 473.37$ 25.5% 120.71$ 594.08$ 285.16$

3341777106 9/30/2014 1,453 212.92$ 54.29$ -$ 267.21$ (1,228.37)$ 409.46$ 25.5% 104.40$ 513.86$ 246.65$

3341777040 9/30/2014 1,522 264.07$ 67.34$ -$ 331.41$ (1,523.48)$ 507.83$ 25.5% 129.50$ 637.32$ 305.91$

3347800212 9/30/2014 1,556 228.01$ 58.14$ -$ 286.15$ (1,315.45)$ 438.48$ 25.5% 111.81$ 550.29$ 264.14$

3347805613 9/30/2014 1,720 327.29$ 83.46$ -$ 410.75$ (1,888.24)$ 629.41$ 25.5% 160.50$ 789.91$ 379.16$

3347800186 9/30/2014 1,976 367.39$ 93.68$ -$ 461.07$ (2,119.56)$ 706.52$ 25.5% 180.15$ 886.67$ 425.60$

3386626983 9/30/2014 2,070 706.28$ 180.10$ -$ 886.38$ (4,074.69)$ 1,358.23$ 25.5% 346.35$ 1,704.58$ 818.20$

3347805591 9/30/2014 2,335 357.79$ 91.24$ -$ 449.03$ (2,064.20)$ 688.07$ 25.5% 175.46$ 863.53$ 414.50$

3347800116 9/30/2014 3,247 651.99$ 166.26$ -$ 818.25$ (3,761.49)$ 1,253.83$ 25.5% 319.73$ 1,573.56$ 755.31$

3341776911 9/30/2014 3,335 703.83$ 179.48$ -$ 883.31$ (4,060.53)$ 1,353.51$ 25.5% 345.15$ 1,698.66$ 815.35$

3347805661 9/30/2014 4,517 889.21$ 226.75$ -$ 1,115.96$ (5,130.06)$ 1,710.02$ 25.5% 436.06$ 2,146.08$ 1,030.12$

3347804541 9/30/2014 4,885 495.33$ 126.31$ -$ 621.64$ (2,857.70)$ 952.57$ 25.5% 242.91$ 1,195.47$ 573.83$

3347800201 9/30/2014 5,450 919.73$ 234.53$ -$ 1,154.26$ (5,306.13)$ 1,768.71$ 25.5% 451.02$ 2,219.73$ 1,065.47$

3347806523 9/30/2014 6,800 1,098.12$ 280.02$ -$ 1,378.14$ (6,335.31)$ 2,111.77$ 25.5% 538.50$ 2,650.27$ 1,272.13$

3347800245 9/30/2014 7,365 1,299.84$ 331.46$ -$ 1,631.30$ (7,499.07)$ 2,499.69$ 25.5% 637.42$ 3,137.11$ 1,505.81$

Totals 122,793.00$ 218,972.14$ 96,179.14$

Total Monthly Savings 43.9%; $96,179

NEW Cost Carrier “A” OLD Cost Carrier “A”


How to Reduce Small Parcel & LTLTransportation Costs

Do not rely solely on carriers for advicea) Carrier staff is partially paid on account profits

1. New sales rep commission plans effective January 1st, 2017

b) Analysis is very complicated and time consuming for shippers. Carriers have all the information & advantages

c) Significant rate increases taking effect 2017

d) T’s & C’s In contracts will significantly increase prices

AFMS is willing to perform complimentary benchmarking analysis for ALL your Parcel & LTL contracts

*Stop by the AFMS booth to discuss a complimentary analysis

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AFMS, LLC10260 SW Greenburg Road, Suite 1020

Portland, OR 97223800.246.3521

www.afms.com

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http://www.afms.com/

parcel ltl/ftl air freight ocean freight … · afms employees all previously worked for fedex,...

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