Hidden Fees and Unexpected Costs in your Supply Chain

Next time you see an 18-wheeler stuck in a traffic jam, you’d better hope it’s not carrying a shipment addressed to you or your business. That’s because, as reported by Forbes Magazine, traffic congestion costs the U.S. trucking industry nearly $50 billion each year in lost productivity. That amounts to about $26,000 per truck, and guess who pays the costs?

That’s right, costs are generally passed along to shippers, and ultimately to consumers. The cost of poor infrastructure is just one of several “hidden” or “below the surface” fees that go into the transportation and logistics costs U.S. businesses pay each year. Other fees that are seemingly slipped in to transportation bills include costs associated with “free” shipping, costs resulting from shipments that arrive damaged, regulatory costs and excessive or unwarranted accessorial fees. This is in addition to costs resulting from inefficiencies and redundancies in warehouse and transportation operations that often go unnoticed.

Research by McKinsey and Partners estimates that supply chain inefficiencies are so widespread, a business could reduce warehouse costs by up to 50 percent, and transportation costs by 40 percent if corrective steps are taken.

The first step in taking control of these hidden costs though, is knowing about them. A business can start by conducting an audit of all freight and supply chain costs. Dig deep into the fine print and ask questions about any charges that look suspicious. There’s nothing to lose and everything to gain from asking a logistics provider to explain a certain charge, or provide supporting documentation.

A new white paper from Purolator International, “From ‘Free’ Shipping to Product Returns: Understanding Hidden Costs in your Supply Chain,” discusses several factors that help drive up overall supply chain spending. The paper highlights the impact these charges can have on the bottom line, and identifies solutions for managing these costs, if not eliminating them entirely

Please click here to download a complimentary copy of Purolator’s new white paper and learn more.

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With Two-Day Delivery the Norm, Expedited Service is an appealing E-Commerce Option

It’s no secret that online shoppers place a premium on free shipping, with multiple surveys showing that consumers have come to expect this benefit. But what does come as somewhat of a surprise, is the changing definition of what consumers consider “fast” shipping.

According to 2016 research by Deloitte, a strong majority of consumers — 83 percent – consider fast shipping to mean delivery within two days or less. Only 42 percent of consumers consider three-to-four-day shipping “fast,” down from 63 percent just a year earlier.

Deloitte’s researchers cite Amazon.com as a key driver behind this attitude change. Specifically, Amazon Prime, which offers two-day delivery to members who pay an annual membership fee. With as many as 65 million Americans reportedly signed up as Amazon Prime members, it’s not surprising that consumers have come to see two-day shipping as the new normal.

But meeting these expectations has been a challenge for many online retailers, who suddenly find themselves tasked with reconfiguring warehouse and inventory strategies, and developing logistics solutions to ensure fast, on-time delivery.

For many, expedited service has proven to be an obvious and highly effective solution.

Yes, this is the same expedited service traditionally associated with emergency shipments racing through the night, or across multiple continents to meet a critical deadline. But in today’s customer-driven world, a growing number of retailers are embracing expedited as a sure-fire way to meet expectations and ensure definite deliveries.

And like so much else in the logistics industry, expedited service has benefitted from technology and innovative thinking. Today certain logistics providers can provide faster ground-based solutions than some carriers’ air service. And high levels of visibility, in-transit communication, flexibility, security and exceptional last mile service ensure premium levels of customer service.

A new white paper from Purolator International, “Expedited Logistics becoming Preferred Option for Non-Critical Shipments,” takes an in-depth look at today’s expedited services, along with insight for shippers considering enlisting an expedited provider. Please click here to download a copy of the white paper.

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Time for an AOG Efficiency Check Up?

Boeing estimates the cost of a grounded aircraft to be as high as $150,000 for a one-to-two hour delay. That figures represents the cost to the airline of not having its plane in the air, generating revenue. It does not though, include the high costs of customer angst. Customers who are inconvenienced by sudden disruptions — flight cancellations, long delays, even a gate change – can have a lasting impact on a carrier’s reputation.

It’s no wonder then, that “aircraft on ground (AOG)” repair services generally have a “do whatever it takes” mentality toward fixing whatever problem has grounded a plane. For most AOG operations managers, by the time a problem is escalated to their level, it’s understood that every available resource should be marshaled to have the right part on site as quickly as possible.

But “do whatever it takes” no longer has to automatically mean uber-expedited services that come at an eye-popping cost.

This is because technology and innovation have taken hold, and smart managers are availing themselves of opportunities for greater efficiency. In some instances, managers are finding new ways to expedite parts by turning to increasingly innovative, out-of-the-box options. And along the way, managers are uncovering better ways to manage processes they didn’t necessarily realize were in need of improvement.

This is especially critical given the global scope of aviation and today’s required AOG services. No longer is a European or Asian-based repair job the exception. This means a U.S.-based AOG coordination center must have “best in class” solutions available to meet the challenge of expedited international services.

With so much at stake, the AOG sector has much to gain from a Logistics Checkup – a top to bottom review of existing practices, in order to determine better solutions going forward. At a minimum, a business may find validation that it has the right partners and strategies in place. Other businesses though, can find opportunities for improvement in critical areas including:

• Inventory Management. In a perfect world, every airport would have a complete inventory of replacement parts, readily available when needed. Since that’s not realistic, the next best thing is to have a good idea of where replacement parts are located at any given time. Many carriers traditionally relied on a Required Spare Provisioning List (RSPL) to help prioritize parts inventories, including provisions for critically-needed no-go items, which can automatically ground a plane if they become inoperable. The RSPL lets carriers know which parts it should stock, and lays out instructions for quickly obtaining a non-stocked item when the need arises.

In fact though, RSPLs are not uniformly embraced by airline material organizations and AOG desks, and to a large extent, have been minimized by advances in technology. Carriers are implementing forecasting and inventory planning systems that go well beyond traditional RSPLs. Technology allows a manager to know precisely where a part is located at any given time, and in many instances, to develop web-based inventory systems that can be easily accessed throughout the organization.

However, research by Oliver Wyman found a surprising number of airlines are not keeping pace with technology advancements. Fewer than 10 percent of respondents said they plan to invest in “building or improving inventory management systems.”

• New Generation Aircraft – different needs. As airlines upgrade their fleets with manufacturers’ latest high performance, fuel efficient and technology-based aircraft, AOG services will undergo changes to support the next generation of aircraft. Service managers better be aware of the required changes, and plan accordingly. Although each new class of aircraft is intended as an improvement over the preceding generation, any change will require aviation maintenance technicians (AMTs) to be trained and intimately familiar with the new aircraft and their systems. For example, one MRO analyst referred to Swiss Air’s introduction of Bombardier’s C Series as a replacement for its Avro RJ 110 as a “game changer,” because of the C Series’ introduction of advanced avionics, composite materials and new generation of geared turbofan engines. In addition, advanced aircraft health monitoring systems (AHMS) will provide real time data to AMTs, so that part failures can be diagnosed immediately. This means parts and repair personnel can be at the gate when a plane lands. The key though, is to have parts for the next generation aircraft easily available.

• Transit Times and Modes. In the world of AOG repairs, timing truly is everything. A call comes in to a carrier’s operational control center, and the clock starts ticking. Many AOG desks find comfort in relying on the same tried and trusted transportation providers they have used for years. But improved transit times and creative options are taking hold within the industry, and an AOG manager needs to keep abreast of developments.
o Expedited Ground Solutions. For AOG repairs within the U.S. and Canada, it is possible to have a part delivered within the same time frame as – sometimes faster than – an air solution. How is this possible? For one thing, route optimization software helps ensure that a highly efficient route is selected. And a two-person driving team will ensure that a shipment remains in constant motion, since one person can rest (per U.S. driver “hours of service” regulations) while the other one drives. Many industries – industrial machinery, automotive, semiconductor – rely on expedited ground solutions to meet “just-in-time” manufacturing requirements, and appreciate the lower price point and guaranteed on-time service.

o Hybrid Air-Ground Solutions. In some instances, the ideal solution may be a combination of air and ground services. In this situation, an AOG shipment would rely on ground service for direct delivery to a scheduled air charter. Once on the ground, the part would be picked up planeside and brought directly to the waiting aircraft. In this scenario the part is essentially in constant motion. Clearly this can be an ideal solution, but requires a high degree of visibility and coordination by a logistics provider. Only a provider with access to the necessary ground and air assets can offer such a highly-synchronized, seamless solution.

o Air Charter. AOG managers who rely on air solutions know too well about the time wasted with flight tender and recovery times. Charter flights are an obvious way to avert this wasted time, since cargo is loaded directly onto a plane, or removed immediately upon arrival. Charters traditionally come at a premium price point, but a resourceful AOG manager can minimize those costs by taking advantage of “regularly scheduled” charters that offer direct service to certain locations.

o Mitigate Borrowing Pool Costs. While a regional charter may not be an ideal solution for emergencies, it can help address the high costs that ensue when a part is borrowed. AOG managers understand that the short-term benefit of using a loaner part from a competitor comes with a hefty price tag. The meter literally starts running the moment a part is borrowed, and it doesn’t stop until the part is returned. In many instances, a logistics provider may be able to use their regional charter network to expedite a part’s return to the loaner’s home base. For example, a part that is borrowed in New York, and then removed in Chicago, could be retrieved by a Chicago logistics partner and returned to New York, usually in a fraction of the time generally associated with traditional integrators and their processes.

• Customs Clearance Efficiency. Today’s global AOG services mean unavoidable trips through an international customs process – sometimes multiple processes. At a minimum, a part leaving the United States must meet U.S. export requirements which, depending on the nature of the part, could trigger “dangerous goods” paperwork requirements. And depending on the country to which the part is headed, a customs experience will have varying degrees of complexity. But handled properly by a qualified logistics partner, the process can be hassle-free, and essentially a non-issue.

An AOG manager must ensure a potential third party supplier has experience. At a minimum, a qualified provider will ensure that a shipment arrives at a customs checkpoint with all paperwork ready to go, and where possible already pre-cleared at wheels-up. All taxes/duties/fees will also be paid in advance, and the shipment will be in compliance with all security and “other government department” mandates.

A truly exceptional logistics provider, will go beyond this, and offer innovative services that may include:
o Use of regional airports. Extremely busy airports can be avoided by rerouting a shipment to travel via a less-busy alternative.
o Maximal use of “customs-friendly” countries. Some countries are notoriously inefficient at clearing shipments through customs, while others can move shipments quickly. A savvy logistics provider will be able to plan a logistics route that avoids likely-difficult customs procedures.
o Local couriers. A qualified provider will have local personnel on the ground ready to oversee the proper handling of a shipment. Local personnel will speak the local language, be fully aware of airport logistics, customs processes and even local ground options. In some instances, the local agent will accompany the shipment to its final destination.

Experienced AOG managers know that uncertainty and contingency planning are the rules of the road in responding to repair requests. A manager literally never knows what the next phone call may bring. The key to success though, is to make sure an AOG service has the best tools and resources in its tool box. And as this discussion makes clear, those tools and resources are improving on a regular basis.

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Visit Purolator International at Supply Chain and Transportation Expo booth #3337!

The expo dates are April 4-7, 2016 at the Georgia World Congress Center Atlanta, GA, We invite you to register for FREE today! Click her for details http://bit.ly/1UYTHtK



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Supply Chain and Transportation Expo – April 4-7, 2016

Visit Purolator International at Supply Chain and Transportation Expo booth #3337! 

The expo dates are April 4-7, 2016 at the Georgia World Congress Center Atlanta, GA, We invite you to register for FREE today! Click here for details.


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Logistics Provider can help Businesses Deliver on Customer Experience


If a package shows up late, who gets the blame, the retailer who sold the product, or the logistics company that was supposed to oversee its delivery?

Many retailers are surprised to learn, in fact, that roughly half the time, consumers give them the blame.  Research by  Acquity Group found 52 percent of consumers surveyed blame the retailer when a shipment arrives late, versus 49 percent who blame the shipping company.  And, the impact can be devastating to a retailer.  Of the 69 percent of respondents who had experienced a late delivery, 63 percent said it would negatively impact their relationship with the retailer, with 23 percent indicating they would “cease ordering from that company altogether.”

This should be a wake up call to retailers that have invested significant time and resources toward creating a superior customer experience:  The logistics component of the customer experience is critically important, and if not handled correctly, can drive away customers.  That is to say, a business can get everything else right – offer a highly efficient website with competitive pricing, personalized offers, an efficient checkout process and a customer-friendly returns policy.  But all this hard work could be for naught, if a logistics provider fails to make a delivery on time.

This means a retailer must choose carefully when enlisting a logistics provider to interact with its customers, and manage the shipping and delivery component of its supply chain.  Customers clearly view a delivery company as an extension of the retailer, and fair or not, will base their loyalty and future shopping preferences, at least in part, on the delivery company’s performance.

A new white paper from Purolator International, “Does Your Logistics Provider Support Your Customer Experience?,” discusses the important role a logistics provider can have in supporting a retailer’s efforts.  Beyond providing on time service and delivering packages undamaged, a logistics partner can go the extra mile by offering high levels of customer service, accommodating customers’ last minute delivery changes, and by offering high levels of transparency and regular tracking updates.

As the white paper makes clear, the right logistics provider can be an asset to a retailer’s efforts to create a superior customer experience.  But finding the right provider takes time, and a fair amount of diligence to weed through the numerous options, many of which will simply not have the right stuff.

To download a complimentary copy of Purolator’s white paper, please click here.

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Purolator International Launches the Long Island Supply Chain Index


Survey Data Reveals the Long Island Manufacturing Industry Forecast as an Indicator of Overall Economic Health for the Region
 Long Island Manufacturing Leaders Anticipate Growth in New Orders and Production in Coming Months

JERICHO, NY – March 9, 2016 – Purolator International, the leading provider of cross-border logistics, today launches its first Long Island Supply Chain Index, a quarterly survey of Long Island manufacturers’ business forecast for the six months ahead. The survey will be used as an overall indicator of Long Island’s economic health.  The survey results announced today reflect Long Island manufacturers’ plans through May 2016.

“There’s been a lot of talk about Long Island transitioning from its ‘roots’ of manufacturing to become a services and technology region.  While this is positive growth, and something that is happening on the national scale as well, it’s important to remember why manufacturing is so vital to the economy,” said John Costanzo, President, Purolator International.

“Manufacturing does more than any other industry to generate economic growth.  Beyond job creation, which in and of itself is hugely significant, manufacturing feeds activity into every other economic sector.  More than seven jobs can be created from a single manufactured good – product design, engineering, supply chain, production managers, delivery, sales, and marketing,” continued Costanzo.

The inaugural Long Island Supply Chain Index reached 200 Nassau and Suffolk County manufacturing leaders, who participated in the phone survey conducted by Stony Brook University and Princeton Survey Research Associates.  The findings are being unveiled today at a Long Island Association breakfast meeting.  Following the presentation, Long Island manufacturing and distribution experts will also participate in a panel discussion on manufacturing on Long Island.  Panelists include: Jon Cooper, President of Spectronics; Doug McCrossan, President & CEO of CPI Aero, Inc.; Michael Eichinger, Vice President and COO of Bay Fastening Systems; Anne Shybunko-Moor, President and Owner of GSE Dynamics, Inc.; and Leonie Huddy, Pd.D., Professor of Political Science at Stony Brook University.

“This is a timely and important discussion on where manufacturing is heading and how Long Island employees and companies can adapt to meet today’s challenges and opportunities,” said Kevin Law, President & CEO, Long Island Association.  “Purolator’s Supply Chain Index data revealed today will be a valuable resource for the entire region.”

Long Island Manufacturers Expecting Orders to Increase
Long Island manufacturing executives are anticipating growth in the coming months, with almost half (45%) of all respondents anticipating new orders will increase.  Another 49% expect new orders to remain the same.  Young executives and managers under the age of 50 were more optimistic than their older counterparts – with 59% of younger, and 31% of older executives expecting an increase.

The respondents offered a number of reasons when asked why they expect new orders to increase, including: the emergence of new customers or markets (32%), a general improvement in business conditions (21%), changing seasonal demand (18%), an expansion in their production capabilities (11%).

“All of these responses show positive momentum for Long Island.  Beyond seasonal demand, all of the other indicators for an increase in new orders suggest a regular, sustained increase in business,” said Costanzo.

Another positive indicator found that half of all manufacturing companies surveyed had hired new employees in the past year. Hiring was most common in companies with higher sales – 62% of companies with sales of $1M to $100M or more had hired over the year.

Additional findings revealed:

  • More than half (53%) of Long Island manufacturers expect their production levels to remain the same over the next six months, with another (38%) expecting to increase their production levels.  However, an increase in production was cited more often (43%) among companies with sales of $1M to $100M or more, as well as from younger executives (48%).
  • Manufacturing executives did not expect to see a dramatic change in their inventory levels – 68% expected levels to stay the same, 14% expected an increase, and 15% anticipate a decline.
  • Even among executives of companies in which production levels are expected to increase, almost 60% believed their inventory levels would remain constant, suggesting they expected to increase both production and sales.
  • Another 12% of companies expecting increased production believed their inventory would actually decline over the same time period, suggesting greater demand than supply.
  • Most respondents expected to maintain the same level of air shipment, with 11% citing an expected increase and 4% expecting a decrease. Of those that anticipated an increase, 82% cited customer demand as the reason.
  • The consistent use of ground versus air shipments and consistent inventory levels also suggest a stable economy, as companies typically use more air service when the economy slows down rather than build their inventories.

The Long Island Supply Chain Index survey obtained interviews with a sample of manufacturing businesses in Nassau and Suffolk counties of New York. The survey was conducted by Princeton Survey Research Associates International (PSRAI). Data was collected by landline between November 3, 2015 and November 18, 2015. The margin of sampling error for the complete set of data is ±7.0 percentage points with a response rate of 13 percent.

About Purolator International
Purolator International is a subsidiary of Purolator Inc., Canada’s largest integrated freight, parcel and logistics solutions provider. Purolator International specializes in the air and surface forwarding of Express, Freight and Parcel shipments, customs brokerage, and fulfillment and delivery services to, from and within North America. Purolator International has received numerous industry awards for its superior service and innovative solutions, including “100 Great Supply Chain Projects” by Supply & Demand Chain Executive magazine, “Top 100 Great Supply Chain Partners” list by Supply Chain Brain magazine, “Top 100 3PL Providers” by Inbound Logistics, and Logistics Management’s “Quest for Quality Award.” In addition to facilities throughout New York, Purolator International has locations in key U.S. markets including Atlanta, Baltimore, Boston, Buffalo, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas/Ft. Worth, Denver, Detroit, Houston, Indianapolis, Los Angeles, Miami, Milwaukee, Minneapolis, Nashville, Newark, New York, Philadelphia, Phoenix, Pittsburgh, Raleigh/Durham, Salt Lake City, San Diego, San Francisco, Seattle, and Saint Louis.

For more information about Purolator International, visit www.purolatorinternational.com.

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Purolator International Launches the LI Supply Chain Index.

Survey Data Reveals the LI Manufacturing Industry Economics’ Health for the Region.

JC in LI business News

President John Costanzo of Purolator International presents new LI Supply Chain Index to Long Island Association and Stony Brook University.

Read Long Island Business news complete article:


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Peerless Media Customs Reports Purolator CCDI

Improving U.S. Canada Freight Flows in a Growing Cross-border Market

As many U.S. shippers are well aware, Canada is the top export destination for U.S. manufacturers, claiming 19 percent of all American exports. And due to the explosive growth of e-commerce, that number is only going to get bigger.

In this new special report, the editorial staff of Logistics Management has compiled several articles designed to help U.S. shippers take some of the mystery out of cross-border trade with Canada—from the importance of choosing the most capable partners to understanding the role trade compliance plays in gaining competitive advantage.


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Shipping Goods to Canada? Don’t Make It Harder Than It Has To Be!

Incomplete paperwork and missing documentation top the list of reasons why shipments are delayed at the U.S./Canadian border.  And according to the Canada Border Services Agency (CBSA), which imposes fines for certain customs violations, leading examples of “non-compliance” include:

  • Failure to pay duties;
  • Failure to provide required information to CBSA;
  • Unauthorized removal of goods from a warehouse;
  • Direct delivery of goods prior to release from CBSA control; and
  • Failure to report goods to the CBSA.

Thus it would seem that clearing goods through customs is not for the feint of heart.

In fact though, the process can be a highly efficient and painless undertaking IF a business understands how it works, and takes advantage of multiple opportunities to facilitate the process.  Important to note though, is that since most businesses do not have the time or manpower to dedicate to the clearance process, an experienced logistics provider will usually manage the process on the business’s behalf.

An experienced logistics provider will have insight into all CBP and CBSA processes intended to make the clearance process more streamlined and “trade friendly.”

For example, CBSA offers U.S. businesses the option to register as a “Non-Resident Importer (NRI).”  As a NRI, a U.S. business can charge its Canadian customers sales tax at the time of purchase, and act as “importer or record,” in overseeing the customs process.  Without NRI status, a U.S. business would be severely disadvantaged.  Its Canadian customers would be slapped at delivery time with an unexpected invoice for unpaid taxes, and could have to travel to a CBSA office to retrieve its shipment.

Beware though – not every logistics provider that claims to have Canadian expertise has an in-depth understanding of the customs process.  Not every provider will know about the NRI program, for example.   So a business needs to do its homework and be certain that its logistics provider truly is up to the task of helping to facilitate the clearance process.

A new white paper from Purolator International, “Avoiding Delays and Unexpected Costs:  Facilitating the U.S.-Canada Border Clearance Process,” provides an overview of opportunities that can help ensure a delay-free, hassle-free border clearance.

Click here to download a complimentary copy of the new white paper.

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