Multichannel retailers may rely on shippers, consolidators, logistics companies, the U.S. Postal Service, or a combination of these possibilities to get goods to their customers. Whatever the level of efficiency the shipping company may provide, there is a strong argument to be made that the more cooperation between the retailer and the shipper, the more benefit both will realize. An excellent case in point is reading and office tools marketer Levenger’s partnership with FedEx to provide Levenger’s customers with reliable and economical delivery of merchandise.
Privately owned Levenger, established in 1987 and headquartered in Delray Beach, FL, operates retail stores in Delray Beach and Chicago, a Web site, and mail order catalogs. The company is known for the quality of its merchandise, which includes pens, office furniture, lighting, briefcases, and other “Tools for Serious Readers.” Founders Steve and Lori Leveen sum up their philosophy: “We’re persnickety on getting the smallest detail right. We want Levenger products to be such good quality that they could become tomorrow’s antiques, kept in families and in memories.”
That same commitment to quality extends throughout the fulfillment process, according to Eric Cohen, Levenger’s director of fulfillment. “During the past three years we have worked closely with FedEx to implement tools that simplify our operation and improve productivity and customer service,” says Cohen. “FedEx’s image of an upscale carrier fits our need. Their reputation for on-time delivery lets our customers know that we pay attention to details and use a quality carrier.”
FedEx provides Levenger a complete shipping and tracking solution for the more than 600,000 parcels that Levenger ships annually. About 90% of those shipments move via FedEx, most by Home Delivery, and FedEx Freight is used for some of Levenger’s furniture.
SHIPPING AUTOMATION
Levenger, FedEx, and catalog management system provider Ecometry have worked together to implement a fully automated shipping system that has contributed to Levenger’s impressive track record of near-100% on-time shipping. Levenger uses Ecometry to automate its front-end and back-end multichannel operations. The Ecometry shipping system is tightly integrated with the programs of FedEx and other major carriers. Both Ecometry and FedEx software applications sit on Levenger’s network and communicate back and forth throughout the day as orders are placed and processed to fulfillment.
The shipping system works like this: Ecometry’s WMS interacts with the FedEx system during order processing to verify that orders can meet delivery commitments based on the destination and the delivery service/ship method selected. This avoids costly mistakes, such as shipping a FedEx parcel to a Post Office box address. Next, Ecometry obtains tracking numbers and other label information such as routing for FedEx shipments. At the end of order processing, Ecometry prints a combined invoice/packing slip/shipping label that is compliant with FedEx’s requirements for express, ground, and home delivery. Orders are picked and packed and then sent on a conveyor to the shipping area. Each parcel is weighed and scanned to update customer orders to a shipped status. The system generates manifests after day-end closing, and FedEx Ship Manager electronically sends shipped-package information back to FedEx Corporate Systems.
IMPROVED SERVICE
Cohen meets regularly with his FedEx account manager to discuss service and review and monitor on-time delivery. Cohen notes that service has improved over the past two years both in terms of transit time and reliability. Express delivery is about 99% on time and ground 97%, as measured against published standards. “Refunds for service failures were so low that we have stopped filing,” Cohen says, adding that FedEx Ground’s heavy investment in expanding its hub network and sortation capacity seems to be working. “FedEx Home Delivery now serves all of our customers nationwide.”
Levenger has recently taken advantage of a Web-based package information solution called FedEx InSight to help monitor shipments. This allows tracking of FedEx Express and FedEx Ground, domestic or international; updates all inbound, outbound, and third-party shipments matched to an account number or address; and provides timely notification of shipment delays. Working with exception reports, Levenger can communicate accurate shipment information to its customers and suppliers.
STREAMLINED AUDIT AND PAYMENT
Levenger also uses FedEx DirectLink, software that enables electronic transfer of shipping and billing data from FedEx to Levenger, replacing paper invoices and streamlining the payment process. Levenger downloads FedEx data with shipping details such as weight, destination ZIP code, and customer order numbers, and then imports this data into its database and electronically matches it to Ecometry shipment/order data. Prior to using DirectLink, Levenger used to spot-check shipments for accuracy before approving payment. Now, Cohen says, that’s not the case. “We audit 100% of the bills, saving time and money. Our accounts payable department also loves DirectLink because they can reduce the time, errors, and labor involved in handling paper invoices.”
The DirectLink information helps Levenger analyze shipping costs. The company ships a wide variety of products, some heavy and/or bulky. Standard shipping and handling charges do not always cover oversize items, so Cohen uses the data to identify products that may need shipping charge revisions. Some products are quite lightweight, and Levenger has established special reduced shipping charges for pens over $50. DirectLink data and analysis have enabled Levenger to understand shipping costs on a product-by-product basis.
SPECIAL RATES
Levenger and FedEx have worked together to reduce shipping expenses. Levenger has negotiated special discounts and volume incentives on outbound parcels and inbound collect from vendors, and FedEx Freight provides discounted rates on inbound vendor shipments and delivery of furniture to residential and business customers.
Like most catalogs, Levenger has seasonal peaks and valleys. Cohen speaks positively about Levenger’s close working relationship with the local FedEx operations group. They maintain daily contact to communicate projected shipping volumes and ensure that enough FedEx equipment and people are available to process and move all packages.
Beyond competitively favorable rates, Levenger has reduced the number of where-is-my-order customer service calls by using FedEx’s tracking capabilities. Customers are e-mailed their tracking numbers and a link to FedEx’s Web site.
Levenger and FedEx continually explore ways to improve customer service and reduce costs. “FedEx helps us deliver more than just packages,” says Cohen. Talks with FedEx about global sourcing are under way, and Levenger is currently working to implement Consolidated Returns, a new, lower-cost FedEx return service.
Jeff Kline, founder and president of Kline Management Consulting, has over 25 years of experience in carrier negotiations and helping catalog and e-commerce companies solve logistics and supply chain challenges. He can be reached by phone at (901) 850-0645 and by e-mail at [email protected].