To Reduce Overhead and Transportation Costs, Keep it Close to Home
I run a housewares business, importing glasses and tiles from the Middle East and Mediterranean. Like most exports from the region destined for the eastern seaboard, most of my inventory makes it way through ports in New Jersey. To service my clients – mostly higher-end home design stores – I had to run LTL sized orders from my NJ warehouse to destinations all up and down the coast: from Portland, ME, to Miami, Florida. While my business is one built on solid markups, the cost of transportation sometimes ate as much as 1/3 of my gross margin
I was astute enough to realize that I could use some help with logistics. I wasn’t sure exactly what sort of help I needed, but I was sure there had to be a better way to manage and deliver inventory more effectively – whether it was requiring my customers to order more, or storing it closer to them. On the recommendation of a friend who runs a paper business in New Jersey, I contacted Transport System Inc., basically to get their consultation on ways to reduce my freight shipping expenses overall
After hours of free consultation and taking time to understand my inventory and replenishment cycles, they were able to devise a somewhat decentralized solution that would allow me to deliver full trailer loads to other warehouses up and down the east coast, from which LTL sized orders could still be filled. This allowed me to serve my customers better, since I didn’t require them to wait until I could get a mostly full trailer to their area – and mine is not a high quantity (by actual volume) business: tiles and glasses are small and expensive.
From a primary NJ warehouse, inventory gets moved to satellite locations by the trailer load. With the help of an asset management solution that TSI implemented for me, I am now able to see my real-time inventory all up and down the coast, which allows me to plan my buying and importing much better. The net result is that I am actually holding the same amount of inventory, but delivering it much faster (same day or overnight for most of the East Coast at no extra charge to customers), more reliably, and far more cost effectively. I also have new markets that have been opened up to my products by new capacity elsewhere – TSI has setup my logistics for a push into the Midwest / Chicago market with a warehouse.
For businesses who are finding that logistics eats into a lot of their high margins because they are forced to ship LTL or deliver customer orders same day or overnight, having the humility to enlist the help of logistics experts is crucial. I had that humility – I can brag about it now – and it truly paid off. I am thankful for my carrier and warehouse company’s expertise.
