Vendor Compliance Programs Resume as Volumes Normalize After COVID-19 Surge
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Retailers today are under tremendous pressure from consumers and workers to cut prices and raise wages, all while keeping up with the growing Amazon threat. Vendor compliance programs, which include fines or penalties for late or inadequate orders, help retailers improve supply chain performance while reducing stock outages, overstocks, and lost sales.
As panic buying and freight volumes surged in late March, suppliers experienced replenishment deficits and canceled purchase orders due to lack of product. Retailers also had to shift appointments around due to reduced workforce and dock hours. Distribution centers were in chaos, and as a result, several retailers suspended their vendor-compliance penalties to provide relief to their suppliers—especially for staple items needed in stores quickly.
Now that volumes are normalizing, suppliers are beginning to incur fines and penalties once again from some retailers for performance issues. Carrier performance is more important than ever.
Is unreliable transportation costing you?
Below are some reasons you may paying avoidable fines:
- Carrier fails to arrive for scheduled appointment and incurs missed appointment fee
- Carrier arrives too early or more than one hour late
- Reschedule request is less than 24 hours before delivery
- On Time and In Full (OTIF) violation
Opting for the lowest carrier rate does not always result in cost savings. You must think big picture and look at total cost of transportation. Focusing too much on the linehaul cost without taking service into consideration can lead to expensive penalties, low supplier scores, and tarnished relationships with retailers.
Reduce costs and improve OTIF
To ensure strong OTIF and OTD performance into top retailer DCs, LoadDelivered created the Premium Carrier Contract Services Program (PCCS). The objective of this program is to take primary awards received from shippers and contract them out to reliable carriers in the same fashion.
- Efficiencies and cost savings for partners gained through not having to procure carriers repeatedly for one lane
- Volume plus consistency leads to improved relationships
- Familiarity with lanes, facilities, and operational nuances leads to a high level of service
- Visibility compliance required for PCCS program; carriers must have the ability to opt into geo-tracking, ensuring continuous tracking capabilities for partners
Below are examples of our strong execution at top retailers.
- Recognized as one of CVS's top performing and most trusted carrier partners.
- 95% or better on time delivery and avoided OTIF and Appointment Integrity fines—saving hundreds of thousands of dollars per year for some partners.
- Single-source carrier for prepaid CVS suppliers into certain DCs.
- Single-source contracted carrier for pre-paid shipments moving into all Dollar General locations for one of the largest CPG companies in the world (U.S. division).
- Annual savings of more than $100K
- Strong presence at 42 Kroger DCs supported by Capstone Warehouse Services.
- Regular shipments into high-stakes and high-demand, Capstone-supported Kroger DCs as both a direct partner (over 10,000 loads hauled) and for some of the biggest brands in the world.
- Ability to create drop trailer programming, which increases OTD drastically, by 20% in some cases while reducing detention costs by up to 30%.
Whether delivering into large format stores like Aldi and CVS, or large format retailers like Walmart and Kroger, carrier performance is key. Let us help you meet delivery windows and save money.