LESCO Controls Freight Shipping Costs with Varsity
ShipSoft-Freight |
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LESCO, Inc. (Nasdaq: LSCO), is the leading specialty
provider of lawn care and golf course products for the professional green
and pest control industries. Shipments of fertilizer, chemicals and grass
seed to LESCO service centers, mobile stores and direct delivery customers
are handled through eleven East Coast distribution centers. Each distribution
hub averages 20-25 truckloads and 45-50 LTL shipments per day. LESCO has
recently experienced rapid growth, opening 25 new stores in 2003.
LESCO's products are heavy and expensive to ship, which makes freight expense
a large component of the company's product costs, and a key area for cost
control. However, LESCO found that as their distribution network expanded,
they had little visibility into freight expense.
Although the traffic department would negotiate rates with carriers, manually
publish a rate book and recommend freight guidelines, these were not always
followed by the distribution centers. Freight invoice audits revealed non-optimal
carrier rates and incorrect accessorial charges. Without an automated system
it was difficult to control shipping activity and the related freight expense.
Mark Austin, Application Development Manager for LESCO Logistics and Operations,
comments, "Without better information, when a carrier presented a bill
for transportation services we had to pay him, even if we disputed his costs."
The need to gain control over freight expense led LESCO to undertake the
search for an automated freight shipping system.
After looking at a number of shipping solutions, LESCO selected Varsity's
ShipSoft-Freight and Bill of Lading Generator. Varsity's reputation for
reliability from initial implementation to ongoing tariff updates was behind
the company's decision. Reporting his first-hand experience, Austin notes,
"Varsity lived up to everything I had heard. We adapted the software
to fit our unique freight processes in less than a week, and went live with
a full warehouse management integration within eight weeks of signing the
paperwork."
Using ShipSoft-Freight, LESCO automated the complicated tasks of LTL rating,
shipment carrier selection, shipment documentation and confirmation. LESCO
elected to run Varsity in invisible mode, which seamlessly integrated into
their warehouse management package. "Our employees no longer have to
worry about looking up rates and determining the optimal carrier,"
says Austin. "Varsity's rating software determines the optimal rate
to move our products from point A to point B." LESCO's traffic department
selects the carriers, negotiates rates and accessorial charges, and maintains
fuel rate updates. Warehouse specific restrictions are also set by the traffic
department. This ensures that LESCO only ships through carriers where they
have negotiated good rates. To maintain conformity with the traffic departments
guidelines, LESCO now requires every carrier to submit the Varsity generated
bill of lading with their invoice in order to get paid.
In addition to ensuring guideline compliance, each bill of lading contains
the required origin/destination, billing and shipment details to help LESCO
avoid fines or penalties. This was especially important after 9/11 when
a number of LESCO's trucks were under additional scrutiny. Austin comments
that, "Thanks to Varsity, we avoided a lot of potential fines by having
our HAZMAT product labeled correctly on our bills of lading."
LESCO found that one of the greatest benefits of using Varsity's solution
is complete visibility into freight expense. ShipSoft-Freight captures rates
per mile, rates per lane, cost per shipment, cost per order, cost per mile
and cost per lane. This data is summarized once a day and displayed through
Cognos business intelligence software where LESCO can analyze freight activity
by customer, carrier, region, and product types. This visibility is used
to improve planning, budgeting, financial predictability, billing, customer
profitability, control of warehouses, control over customer services policies,
carrier negotiations and to monitor accessorial charges such as unloading
or additional stops.
For LESCO's Information Technology department, one final benefit of using
Varsity is the fact that they rarely have to be involved. "Since installation,
I have never had to give Varsity much thought," notes Austin. "Even
when we receive updates, we simply load the CD in and go. I am very pleased
with our decision to purchase Varsity."
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