Public Education Partnership Seminar September 1, 2015 Freight 101 Public Education Partnership Seminar September 1, 2015

Freight 101- Talking Points Freight Management Types of Transportation Shipping Glossary Rates Terms from a purchasing perspective Claims Selecting a Carrier

Freight Management Ability to analyze True Cost Definition Importance To handle or direct with a degree of skill, to exercise executive, administrative and supervisory direction of the loading and transporting of goods that need to be shipped or transported from one destination to another resulting in compensation. Ability to analyze True Cost Effective management can mean BIG savings

Types of Transportation Parcel: Small package, Good transit times, multiple levels of service standards. Air Freight: Shipments less than 2,000 lbs, fastest transit available. Premium rates. Intermodal: Containers moved via rail, ship or truck

Types of Transportation TL: Truckload Large loads picks up in one location and delivers to the final location. No additional labor requirements to support what the driver is doing. Economical way to move large amounts of freight Good transit time

Types or Transportation LTL: Less than Truckload Smaller Shipment (less than 10,000 lbs) Consolidate Single Pick ups to destination Additional services available Competitive Transit Times including overnight service

Shipping Glossary Bill of Lading (BOL) A binding contract that serves two main purposes. 1: a receipt for the goods delivered to the transportation provider for shipment. 2. a definition or description of the goods and services required

Shipping Glossary Deliver Receipt (DR) COD (Collect on Delivery). Document a consignee or its agent dates and signs at delivery, stating the condition of the goods at delivery. COD (Collect on Delivery). A shipment for which the transportation provider is responsible for collecting the sale price of the goods shipped before delivery

Shipping Glossary Common Carrier: Company that provides transportation services to the public in return for compensation Contract Carrier: Company that provides a dedicated fleet to a customer in return for a contractual rate. Tariff: A document setting forth applicable rules, rates and charges to move goods NMFC: National Motor Freight Classification

Shipping Glossary Trailers: Pup (28’), 40’, 45’, 48’, 53’ Combinations of the above Dolly/ Convertor Gear: Provides and extra axle used to connect multiple trailers Hazardous Materials: Defined by the US DOT as being a substance that if transported poses an unreasonable risk to the health and safety of property. Pro: Number used by carrier for tracking shipment

Info needed for accurate quote Rates Truckload (TL) Truckload Info needed for accurate quote Rates are determined using a per mileage rate. Rates can vary based on capacity in a certain lane Origin zip code Destination zip code Special services. Refrigerated Delay time

Rates LTL: Less than truckload Info needed for accurate quote Rates are based on factors including weight, density, classification of freight, distance, base rates, freight all kinds, minimums, tariff, discount, accessorial/surcharges Origin and Destination zip codes Class Accurate weight Additional services required Oversized or capacity

Rates Accessorial Charges Fuel Surcharge: Every carrier has their own fuel chart that will show a fluctuating rate based on the national average supplied by the DOE. This amount is added to the freight charge only portion of the bill Liftgate, Inside, Non-Commercial Delivery: With increased time, liability or special equipment needs at an all time high, Shippers must protect themselves by knowing the needs of their customers.

Freight Terms What does F.O.B. mean? Free on Board refers to when the title of the shipment transfers from buyer to seller. F.O.B Origin: means that the title to the merchandise passes at the time of pick up F.O.B. Destination: means that the title of the merchandise passes at time and place of delivery

Importance of Freight Terms Terms must be stated at the time of purchase as either FOB Origin or FOB Destination. Additionally the method of payment for freight charges should be designated as Collect, Prepaid and added or Prepaid and allowed. These two items clarify the following: Determines who claims freight loss or damage Determines when the buyer accounts for the assets. (applicable tax) Determines who pays freight

Freight Terms Importance of analysis Request a bid from vendors including the price of goods based on both F.O.B. Origin/ freight collect and F.O.B. Destination/ freight prepaid and allowed The difference between prices is the vendors freight allowance Compare with state freight rates Proper analysis ensures the bid is awarded utilizing the optimal carrier rates with no change in transit times or service

Claims Shipper, Consignee, or third party who has the title to the goods may file a claim Claim should be filed within 9 months of the date delivered and should include a copy of the original invoice, inspection report, BOL or DR as well as any supporting material. Ie. photos, description, exact notation of damage or loss Goods must be retained along with all packaging material.

Freight Savings Additional tariff options. Proper packaging Volume Rate: large loads, shipper load/consignee unload, pay for linear ft. used of a trailer Pallet Rate: 48*40 pallet, flat rate, works well with heavy pallet shipments Backhaul lanes Draw backs; Alternative/ Reduced liability; Transit limitations Proper packaging Claims are time consuming and costly. Work with your carrier for advice on proper packaging that will reduce damage.

Selecting a carrier Consider the factors necessary to make a good decision. Transit time: direct service, guaranteed delivery Service/ History Rates Relationship: Freight is a service based trade. It is important to get familiar with your freight vendors. Establish a good relationship that allows your carrier to provide input and search for a win/win solution.