Ep 4. Logistics Data

I’m going to Beanstalk Conference in Brooklyn on September 8th. It’s going to be a great opportunity to meet and learn from brands and vendors in the DTC space. If you’re going or will be in NY, shoot me a message.

In Today’s Email:

Logistics data is an absolute mess.

In a typical supply chain, data is changing hands between hundreds of organizations, and each of those organizations hand picks what data they think is relevant, and what they think is noise.

That leaves you, the brand owner, with limited data visibility.

(Hint: It’s pretty easy to get overcharged if you can’t how charges were calculated)

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The rise of e-commerce created more small / medium brands that ship residential.

So now, FedEx, UPS, and USPS don’t have the manpower to service everyone well.

This created a gap in the market that’s been filled by hundreds of specialty carriers, brokers, and shipping aggregators that exist today.

Instead of trying to service so many accounts, major carriers mark up their rates, and hand them to “retailers” to provide service.

With so many players and service levels, data quality varies widely.

#1 - “All-In” Rate Table

You need a table that encompasses all possible product weights you may have now and in the future, for every zone that you ship to. If you ship small items, ask for oz based pricing. If you ship internationally, request zones for all countries you may ship to.

To be truly “all-in”, your rate card must include fuel, residential, additional handling, etc. If there are peak season surcharges, ask for a separate “all-in” peak season table. 

Without an all-in rate card, you will have no way of verifying if your invoices match what you were promised.

I’ve recovered over $100k in shipping overcharges which I would have never found without having a rate card.

#2 - Net Charge Breakdown

Many shipping invoices only show the total charge per tracking number in the invoice. This is a problem, because if you were overcharged on fuel, residential, additional handling, or any other constituent of the total, you will have no way of catching that mistake. 

#3 - Days to Delivery + Claims Policy

For every tracking number that was successfully delivered, you should know how many days and business days it took to go from warehouse pickup to delivery.

This should be paired with a transparent claims policy and system so you know which packages did not meet the agreement, and ultimately be reimbursed.

#4 - Rated Weight & Actual Weight

Oftentimes on invoices, shippers will only show your rated weight.

The reason you want to see both rated and actual weights is so you can get a sense for how much higher your rated weight is. Rated weights are higher if your dimensions are less cubic. If it’s much higher, you can ask for a higher DIM divisor, which dings your box less and could save you a ton of money.

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You need to ask questions demand data transparency.

If you don’t know your true costs, you won’t improve your COGS.

See you all next Thursday 👋

Keyan

PS: If you found this insightful, let me know. I will always reply to comments/questions.