As prices plummet and soar at the gas pump, calculating and managing shipping costs can be a real drain on a retailer’s business. There’s no getting around the need to move goods from sellers to buyers, but the costs involved (from researching many shipping rates to grappling with big carriers who give good rates to bigger companies than yours) can really eat into an independent retailer’s time and profits. A new company, Lower Shipping Cost Technologies, started up just this year in order to offer a well tested tool to new customers who want a way out of this logistical logjam. The company’s premiere service is an online system that lets customers find the best shipping option with a minimum of fuss.
Lower Shipping Cost Technologies (LSC) developed the system from the ground up as a tool to minimize shipping costs. “Our own in-house IT department developed this shipping management tool,” says information technology manager, Star Wang, “to find the lowest cost to move product.” LSC achieves this with a two-prong approach. First, LSC offers the system for use in compiling information. “It lists the estimated charges for all the carriers, and the delivery dates offered,” says Wang. “We can find which one is cheaper.” Instead of having to call six or seven carriers and get equivalent competing quotes, the tool automates all that legwork and returns the best options. “With this tool, everything can be done in seconds. It optimizes the carrier selection.”
The system is entirely online and platform independent. “This is a total Web based solution. Customers are not downloading anything. That’s the unique thing. There is no installing, no CD-ROM to run. Just our website,” explains Wang. The second prong is an option to order shipping services through LSC’s brokerage service. By shipping through LSC, users can take advantage of LSC’s total volume of shipping business, so even after adding a commission to the shipping rate offered, the user’s costs are usually still lower than those they can find on their own. That’s especially true of smaller customers such as independent retailers.
“Our business is both an online system and brokerage service,” notes Wang. That is, the business features two modes. In tool mode, the customer can use the Web based interface to quickly research and compare rates from several carriers. And in brokerage mode, a customer can choose from LSC brokered carriers and take advantage of a rate that’s likely lower than that which the customer could arrange alone. A user can quickly flip from one mode to the other, comparing the rates he can find to those that LSC offers. The brokerage service is called the 3PL service, and the tracking tool is called the Quote Conveyer.
The system was originally developed by LSC’s parent company as a tool to minimize shipping costs. “Our own in-house IT department developed a shipping management tool to, find the lowest cost to move product,” Wang says, and offers several compelling reasons for retailers to use the brokerage service. “They don’t have enough staff in the shipping department to handle multiple carriers, so they are restricting themselves to one or two. This tool opens the door for them to actually engage multiple carriers and always choose the best one.”
What’s next? Continuing development, according to Wang. “We have not branched into mobile platforms yet. We are waiting for user feedback, but it’s something we will absolutely look at.” A recently completed feature allows multiple users, each with custom privileges.
The company specializes in less than truckload shipments, typically wholesalers selling to retailers. Other possible shipments might be from a retailer to a closeouts dealer, or to a large industrial or commercial customer. “If you are shipping 30 cases of pens to a store, that might be three pallets. If you are a small company, you’ll never get the best rate because of your volume,” says the direct but forthright Wang. “We are your broker. You can use our brokerage service. You pick the carriers from those we provide. Everything is scheduled online. The carrier charges us and we charge you. What we provide is that you are using our rate, though of course we earn a small markup. If the carrier gives us a 90 percent discount, we would probably pass to you something like 80 percent.”
“You can use the company site, set up your preferred carriers with your rates, and use the service to boost efficiency in research and accounting/reporting,” says Wang. “Our customer service can even track it for you.” Brokerage customers can gain the lower shipping rates that LSC can negotiate because it does a lot of business, but the company offers more. It has negotiated a range of FAK class exception discounts, which lets bulky but light products, such as clothing, use the shipping rate for more dense items. “It’s particularly useful for companies who are selling light items and low density items, such as apparel and clothing,” says Wang. “It is like getting a high discount plus a FAK discount.”
Customers who use the brokerage service incur no charge at all, aside from the commission the company charges, and that’s practically invisible. Using the online tool without the brokerage incurs a small monthly charge. “If you are using the brokerage service, the only thing we charge is just the markup, and you don’t even see that,” says Wang. “You just see the bill. There’s no additional fee, no monthly fee. No service charge.”
For more information:
Lower Shipping Cost Technologies
5330 Fox Street
Denver, CO 80216