Where do we go to leverage that data point about UPS carrying 10% of all US shipments? The right question to ponder was:
“How could freight companies and their shipping infrastructure investment be leveraged to drive greater ROI?”
And then it hit me.
Hellmann Worldwide Logistics, one of the largest ocean cargo freight forwarder, listened to my wild idea when I started a contract manufacturing business for bar-code scanner users. Customers were data capture VARs who installed bar-code scanners in stores, like Target and Wal-Mart, in distribution centers, like Anheuser-Busch beer warehouses, Pay-Less Shoes DCs, and in manufacturers assembly lines. Shipping their custom product all-water from the Hong Kong container yard to Tampa, Florida could take 30 days or longer.
Hellmann was the only one willing to give us a chance when they heard my solution to cut that time in half. The first container shipment hit our warehouse in 22 days after a delay in customs. The second arrived in 19 days; the third: 16.
Saving two weeks enabled us to reduce inventory over $250,000 initially. Very reasonable savings of capital, and the cost was less than the interest we had paid on the inventory loan.
Hellmann worked with us as aggressively as they could and became a 100% variable cost 3PL for our operation. Importing through Long Beach, we stocked inventory there, dropped shipped to our customers, ultimately selling ex-factory. Overhead dropped over 30% after eliminating our own warehouse.
Thanks to a great outsourcing partner we become a preferred distributor to Time-Warner Cable, Qwest Communications, and WOW WideOpenWest.
Data transformed our business model. Similarly, risk data analytics significantly the business processes for other clients.