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Even under recessionary conditions, Varsity Logistics, Inc. has completed its 2nd Quarter with the signing of three new major-name customers, as well as a solid number of other highly important new customers. The three widely known companies signing on for licenses of Varsity’s IBM i (AS/400)-based shipping software and TMS solution are:

Billabong - The famous surf wear specialist.

Mobis - The parts distribution arm for Hyundai and Kia.

Bunn-o-Matic - The beverage equipment maker.

These and the other new licensing agreements mentioned above demonstrate that companies have confidence in Varsity’s IBM i (AS/400) solution and in the staying power of Varsity to support and develop its unique IBM i (AS/400) solution in years to come.

Varsity Logistics, a fully owned subsidiary of Constellation Software, Inc., is the only company solely dedicated to supporting and developing a shipping software and TMS solution for the IBM i (AS/400) and is undisputed leader in this market segment.

Note: Billabong, Bunn-o-Matic, Hyundai, Kia, and Mobis are trade names owned by their respective companies, and are not trade names, by ownership or license, of Varsity Logistics, Inc. or Constellation Software, Inc.

One of the benefits of Varsity’s shipping software modules are embedded features that help to control transportation carriers costs across the entire shipping process – before a package ships to after an invoice is received. We’ve highlighted the cost-savings benefits of some of our products below.

Ship Select: This module comes into play before the shipment occurs (many customers integrate ShipSelect into their order entry and even quoting processes). ShipSelect automates the carrier selection process for shipments of all modes including LTL, truckload, and rail.

ShipSelect is designed to automatically analyze criteria such as transit time, carrier preference, cost, mode, performance, and carrier service types to select the carrier based on the user’s particular criteria. This guarantees the optimal carrier is chosen for every shipment while conforming to routing guide requirements. By performing the carrier selection process upstream, this ensures that customer shipping requirements are exactly met at order placement time.

Ship Audit: This module comes into play after the shipment occurs and carrier invoices have been received by Account Payable (customers typically integrate Ship Audit with their ERP accounting processes).

Varsity Ship Audit Case Study
The customer is a parts distributor that ships more than 6,000 packages per day from 50 locations with monthly carrier charges typically exceeding $50,000. With this level of shipping volume and complexity, the company needed to get a better understanding of their charges. In the past, the company’s accounts payable department was responsible for reviewing weekly invoices covering 40 separate accounts. Without a dedicated staff, the manual review of individual shipments was impossible. Instead, bills were audited against estimated shipping expense and historical averages. Supplemental third-party auditing services reviewed accounts for other purposes.

To address these challenges and gain greater insight into their shipping expense, the logistics services team requested flat files from their carriers and licensed the ShipAudit module from Varsity.That solution could automatically identify rate and discount discrepancies, provide customizable exception reports and integrate with the company’s shipping and accounts payable systems.

The company established exception criteria based on package size, shipment method and service charge guidelines. Variances outside the company’s defined ranges could now be identified on an exception report. Using the company’s criteria, 4-5 % of shipment orders appeared on the exception report.

Carrier errors accounted for 1 ½ % of the exceptions, usually for residential fees or out of zone over charges. ShipAudit also automatically checked for duplicate charges and wrong account numbers and sent these discrepancies to a pending file for review.

ShipAudit enabled the company to gain control of freight expense across their organization, yielding
the following results:

• Shrunk weekly carrier invoice auditing time from18 hours to less than one, and expanded shipping accounts to more than 50.
• Eliminated third-party auditing expense.
• Identified internal shipping errors, and provided targeted employee training to reduce costly shipping errors.
• Identified billing errors and reduced carrier invoice expense by 1 ½ percent.
• Improved the monitoring of regional shipping activity. Regional freight revenues/expenses could be compared to catch disproportionate freight discounting.
• Gained access to shipping details that were previously only known to the carrier, for example, % of ground shipments or high activity shipping zones. The company could then negotiate carrier contracts that better matched its requirements.

The company’s shipping manager seemed to sum up the experience well: “We like working with Varsity because they maintain a close relationship with the carrier companies. With our dispersed locations, we have to have the most current shipping information. Adding ShipAudit was a simple process with immediate payback.”

ShipView Plus
ShipView Plus provides customers with extensive access to carrier shipment data as well as powerful tools to analyze and visualize information. Understanding how, where, and how much different DCs are shipping with various carriers is a snap. Drilling down into accessorial charges offers unprecedented insight into carrier costs.

If there was ever a time for shipping cost control, now is the time. With the economy in low gear, businesses are focused on eliminating waste and unnecessary cost from across their organization, including the shipping department.

A article featured in the Operations and Fulfillment section of Multichannel Merchant reports  on the rising cost and increasing carrier complexity that affects all shippers.  Rate increases in 2007 and 2008 were the highest increases in more than a decade.

In addition, carriers’ dimensionalization policies “boosted annual costs for shippers by an estimated $1 billion.” Accessorial charges have also been increasing, such that “they now account for up to 40% of your overall freight costs.”

The increase in shipping costs from all angles means that you need to pay attention to a number of factors. One place to start is with your carrier agreement. Rob Martinez of Navigo Consulting Group, believes that “three out of four carrier agreements could be improved by 10% or more.” He goes on to say that “just a limited number of financial strategies could help you reduce shipping costs by 10% or more.” Here are some tips from Martinez on how to eliminate financial waste in your shipping department.

Become a Tougher Negotiator

• Don’t just negotiate list rates, all fees and terms are negotiable. Ask for reductions in accessorial charges, fuel surcharges, general rate increases and other fees.
• Increase competition by auditing invoices for overcharges and late shipments.
• Conduct annual bids
• Split your business between carriers
• Have frequent meeting with nonincumbents

Manage Your Fuel Surcharges

• Get a discounted base rate helps to reduce fuel surcharges which are percentages
• Ask about pre-payment options that lock in costs
• Use more ground shipping instead of express. Ground base rates are 30% to 79% less than premium expedited services, and fuel surcharges are a third the cost 7.75% vs. 25%).

Analyze Carrier Invoices

Setup electronic billing with your carrier to give you the foundation for deeper analysis. Dig into the data and  look for unnecessary costs/billing mistakes in:

• Service types used
• Discounts/incentive applied
• Build weight vs. actual weight
• Container type/packaging
• 3rd Party/collect billings
• Zones

Once you’ve found the most obvious financial wastes through basic analysis you can step up to professional auditing software or contracting with an outside auditing service provider.

Spotting and eliminating financial waste can have a significant impact on your shipping costs and competitive position. Could you become a leaner shipper?

Last year Varsity Logistics achieved  Select Provider within the UPS Ready® partner program. We’re proud to be part of a small minority of companies that are held to high standards for maintaining compliance, delivering products and services, and doing business in a collaborative manner.

As a UPS Ready Select provider, our goal is to deliver the best possible integration between UPS shipping and logistics services and the internal enterprise processes of UPS customers which operate on the IBM System i technology platform.

We have a team of people dedicated to providing up-to-date carrier compliance and new shipping functionality to our customers.

Varsity Logistics was featured in an article by Dan Burger of The Four Hundred, a leading trade publication covering the IBM i world. Entitled The i Gives Manufacturers and Distributors Cost Control the article confirms Varsity’s commitment to the venerable 400, the inimitable i.

Highlights
Transportation management is closely tied to demand management, increased service levels, and more frequent inventory turns. But from the IT perspective, it is mostly about integration. Integration with enterprise resource management (ERP) software is practically mandatory. Integration with warehouse management systems (WMS) is part of a growing trend. The target is pretty big. Labor-intensive processes can be streamlined through automation and improved communication and collaboration with existing programs such as order entry, accounting, and customer service, just to name a few.

The scariest thing about poking around the docks is discovering the internal expenses relating to how loads get organized, how routes are planned, how freight carriers and package shippers are selected and managed, and how isolated this area is from the rest of the business.

“Shipping used to be a back-end process. It wasn’t that well integrated into the order management cycle,” says Andrew Karpie, Senior Director of business development and marketing at Varsity Logistics. “Now companies are interested in a complete order management process that extends beyond the dock.”

If you are an iSeries use interested in improving your transportation planning, shipment execution, financial settlement, and tracking visibility, give us a call. We have the technical and business experts who will know exactly how to help.