While there is sufficient capacity today, things could tighten up again later in the year. Several factors have created ample capacity for shippers during the latter part of 2006 and into the first quarter of 2007. As a rule of thumb, shipments follow closely on the economy, which has slowed. Carriers purchased large numbers of trucks last year before having to buy newer, more expensive models to meet more stringent emissions requirements that went into effect on January 1. The first and second quarters of the year historically have lower volumes of freight needing to be moved.
For a variety of reasons, there was no significant capacity crunch during the peak shipping season last year. Not only were general economic conditions slower, but shippers had been bitten by jammed ports and shrunken capacity during previous peak shipping times and moved up some shipments to earlier in the year.
Although there is talk on both sides of the shipping equation about shippers treating carriers as partners, when capacity is tight carriers can become callous to shippers' need to move cargo. When capacity opens, shippers quickly become more hard-nosed with carriers in their price negotiations. Working more collaboratively can smooth out this rocky relationship for both sides.
Meeting delivery requirements for Wal-Mart's Sam's Club retail warehouse chain requires close collaboration between shipper and carrier. For Wendy Joyce, distribution manager, Gem Dandy Accessories (Madison, N.C., www.gemdandy.com), working closely with one of the company's preferred carriers, ABF Freight System Inc. (Fort Smith, Ark., www.abfs.com), has helped get and keep its business with Sam's Club.
For many years a manufacturer, today Gem Dandy is a wholesale distributor of leather belts and accessories to retailers worldwide. Familiar brand names include Colours by Alexander Julian, Danbury, Lee, Lyntone, PGA Tour and Roper. The company imports the bulk of its products from Asia, although some product arrives from Argentina and Guatemala.
"It's much more of a challenge today on the import side because of lead times," notes Joyce. "We're seeing those grow from month to month. We used to base everything on a 90-day turnaround and it's grown to as much as 120 days. That is a huge challenge."
Joyce estimates that the company imports half a dozen full containers from Asia each year, but most of the freight is coming in less than container load shipments. Distribution is handled from the company's North Carolina facilities. Freight coming from the West Coast generally moves by rail, is off-loaded in the Charlotte area, and then trucked to Madison. Gem Dandy has two different facilities in Madison: a headquarters building and a distribution center a few blocks away.
"We are a national distributor but we also send goods into the Canadian market," says Joyce. "We have done a few drop shipments there, with the goods coming from Asia being delivered straight to Canadian customers like Winners, TJ Maxx and the like, since they have their own warehouses in the country."
Most Gem Dandy shipments move by less than truckload carriers. "Decisions on carriers are based on lanes, transit times and of course, most importantly, on rates," says Joyce. "We expect our carriers to meet appointments. If they do not then it's refused or there are charge backs. For Sam's Club business, ABF has worked with us on meeting appointments and has done a great job making sure that product gets there on the scheduled day and time."
Gem Dandy and ABF have worked on the Sam's Club program for three years. Gem Dandy fields three sales programs each year, sending full-pallet displays to 300 and 500 Club stores, depending on the season.
"The biggest thing is being able to meet Sam's Club delivery requirements," she claims. "So there's been a lot of give and take between us and ABF to be able to pull this off, and we conducted three consecutive back-to-back programs last year."