BENCHMARKING MAKES A DIFFERENCE

Benchmarking is a hot topic, but does it make a difference? The Age of Receivables Survey participants say it does. Since the survey began in 1993, the participants have significantly improved their age of receivables. The ability to measure their performance against the industry is the reason cited for the improvement. If you would like information on the Age of Receivables Survey please call Dave Sirgey at (905) 994-0560.

CUSTOMS UPDATE

The “Customs Watch” section of the Canadian Industrial Traffic League’s newsletter has recently published the following:

Delays Under ACROSS

There is the potential for delay of shipments under the ACROSS program. Usually, once customs has released a shipment, the delivery authority copy of the cargo control document is returned to the carrier/ warehouse operator as notification of release.

As ACROSS eliminates the paper documentation through an electronic link between the importer and customs, there will be no delivery authority documentation to show the carrier or warehouse operator.

Release notification will be conducted via the Release Notification System (RNS), but carriers and operators must be linked to customs to take advantage of this. Thus, if the importer or the customs broker is releasing goods under ACROSS, it is essential that either the carrier be on RNS or be provided a copy of the RNS message. Otherwise, the goods will not be shipped.

Clear All Day & Night

Under the Across program, Customs will be starting its implementation of 24-hour processing of releases transmitted electronically.

Thus, for ports of entry such as Bracebridge, Arnprior, Kenora, Cranbrook and other secondary ports, data will be processed at a 24-hour port, rather than locally.

Not all ports will have access to 24-hour clearances immediately.

DON’T BE FOOLED BY THE CPI

The Consumer Price Index is based on a typical basket of goods and services purchased by the average Canadian consumer. This basket of goods does not relate to the basket of goods and services purchased by a trucking company. The percentage increase in expenses, comparing 1995 to 1994, is much higher for trucking companies than it was for the average consumer.

The non-labour trucking index was developed by FCA/NFTB and Statistics Canada and it is based on the goods and services purchased by trucking companies excluding labour and fuel.

The actual cost increase differential would be even higher if the non-labour trucking index were able to incorporate recent large increases in the cost of insurance, tires and tubes.

HOW DO SHIPPER GROUPS SEE THE FUTURE OF THE LTL TRUCKING INDUSTRY?

Following are some comments expressed by various shipper and carrier panelists at a recent NASSTRAC (The National Small Shipments Traffic Conference ) held in Riverside California in February.

• There is over-capacity in the marketplace. It is a buyers market.
• Customers are pushing change and require value added services.
• Carriers must look at shippers’ needs to find ways to add value to their transportation service at every point in the supply chain.
• Shippers perceive that LTL carriers make little effort at soliciting inbound freight.
• Carriers doing activity based costing are better positioned to create “win-wins” with customers--improve efficiency, measure results and share savings with customer.

PRICE FORMATS - CUSTOMERS WILL BE PUSHING FOR SIMPLIFIED RATING

Expect customers to:

• Insist on rates on diskette
• Insist on net prices and rate quotes listing all origins and destinations
• Push for elimination of separate accessorial charges requesting carriers include them into the base rates (separate charges do not fit into shippers auto rating systems)
• Instead of requesting net prices, some shippers are developing their own base rates and requesting carriers to submit quotes off that level.
• Request for quotations will be made at pre-determined intervals (2 or 3 years).

PROJECTED MARKET TRENDS:

• Average LTL shipment size - DOWN
• Average LTL shipment frequency - UP
• Average LTL transit time -DOWN
• Penalties for non-performance - UP
• Average LTL rate per cwt. - STEADY
• Appointment deliveries - UP (Expected to be as much as 80% of all deliveries in a few years.)
• Value added services - UP (Carriers are expected to come-up with new ideas to enhance the quality of their service offerings.)

CUSTOMERS EXPECTATIONS ARE: MORE SERVICE FOR LESS MONEY

From the above comments, it is clear carriers must work assiduously at re-setting their customers’ expectations for price and service. More than ever, supporting information for negotiations with customers is a must.

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