Date: Mon, 14 Aug 2000
From: "Bill Musser" <firstname.lastname@example.org>
Subject: Re: AMS-Forum Response to Ed Birch and the T2000
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Ed, I guess I am somewhat of a lurker in that Michele occasionally tells me about some of the postings on the forum. I am responding to your posting because of my personal concerns about where this industry is heading.
First, I want you to know that everyone that works at Infinity is from the moving industry, in fact, an average of 12 years! We all believe the professional HHGDs driver and agency owner do not get the respect they deserve. This isn't an easy profession and it requires a lot of skills, both physical and mental. With that said, I am concerned that the "corporate folks", (many have no real moving experience) are looking to turn this industry into a freight moving industry and will be happily reaping more of your hard-earned $$$'s. What agents are involved in the creation of these new rates? Did any of you receive a questionnaire or were you asked for your input? We see how every van line operates and have seen how the corporate offices are looking more and more to move goods by performing local pickups and using their multi-van line fleets or outside common carriers to drop shipments at destination (also known as "terminal agents") for local delivery. They know that the revenue potential here is much larger than if you let agents self-pack and haul. REVENUE is the key word here. Ask your self these questions: What % of the container revenue does your corporate HQ office get from your moves now? What % of ATC's Does the corporate office get now? What % of Accessorials does your Corp HQ get now? What % will they get of each service with the T2000? Ed are you starting to get the picture? Quite Frankly and honestly- the T2000 would be incredible for my company, but you would have to understand the cost and quality implications of SFR tariffs and that our goal is to create the best possible moving program for our clients. This means best carriers, best service and most accurate billings. I hear a lot of Fables about SFR rates and I wanted to give you my take on these Fables based on our experience with thousands of SFR invoices.
FABLE 1- "You don't need to audit a SFR bill". Our data clearly shows that the error factor on a SFR is the same or greater than traditional billings. We recently conducted an audit for a company's internal auditing staff and came up with an average error factor of 65% and an incredible average adjustment of $725 per transferee! The errors that occur on SFR bills are weight bumping- FALSE SHUTTLES, fake 3rd party companies, shifting of basic labor (bed re-disassembly to 3rd parties, failure to deduct bulky weights of autos, boats, hot tubs or other items and the most common error failure to follow policy and contract!!!!! What you need to understand is that although we are not a "audit company" we do perform the industry's best audit. (Just for the record-We do not call shippers, we feel its not ethical AND we actually sell against auditing companies). Yes, there are packing count errors, although its not the highest % of findings. If you use the estimate and invoice documentation, you can pretty much tell if a driver is stretching the distances/stairs. The number one error is the agents-van line's inability to follow the accounts policy and contract, followed by the agents inability to properly apply the tariff RULES- and the agents inexperienced billing staff that doesn't know what a bogus weight ticket looks like or understand the basic tariff rules and just pushes the bills out without looking at the paperwork first. The T2000 does not change the rules, it doesn't change companies policies and contract provisions and not all moves will go as per CWT. In fact, now you will have to compare which pricing method is the least expensive to the client for packing(you thought preparing 1 estimate was a pain???) Here's a question, if the move is based on CWT packing and you do not repack all of the PBOS in new cartons, doesn't the shipper have the right to a refund on the packing that was not performed although it was paid for? THERE IS NO SUBSTITUTE TO TRAINING AND HIRING GOOD PEOPLE.
FABLE 2- the accessorials all average out. Take a look at the statistics on your drivers loads. You will see that all drivers are not equal, many will have higher weight averages and work certain lanes or areas of the country. How do you tell a driver that services east coast cities (NY-Philadelphia-Boston for example)that they are getting compensated for Item 160 or 170 (since both are going to be rolled into the LH) that is just not going to happen. . CAN YOU SAY SHUTTLE,SHUTTLE, SHUTTLE- I was told by a person working on the rates committee(they would never admit to it) that he felt there would be a big problem in the cities but the movers could just charge shuttles...
FABLE 3- Packing CWT averages out. CWT packing creates under packing. Its not difficult to figure out what a shipment will pay to pack. Consider this, for every carton you don't pack, its money in your pocket! Just look a the number of PBO's on SFR moves. I can just see it now, a transferee's Waterford crystal packed in their underwear and sock draw, along with the husbands ties--now there's a claim! So how long will it take your National Account to figure this out. Have a lot of breakables on a shipment- CAN YOU SAY CRATING, CRATING, CRATING- 3rd party of course!
FABLE 4- CWT packing is just like they way they charge for International moves- actually now you're getting it! See, if we start to get you to accept the CWT rate, then we can charge a little more and have the Origin agent export wrap the shipment and have a common carrier pick up the shipment and deliver it the destination agent. Hmmm, sound unrealistic? International CWT only works because of the wrapping of all items and packing of all items.
FABLE 5- The Tariff is "cost neutral". How does including Import-Export fees make the cost neutral? If the average shipment is a home owner and doesn't have elevators, outside flights (can't charge for inside flights) no appliance servicing (all 3rd party) but does have one long carry, how is this going to be cost neutral if the charges for all of these and more are included in this move? If a shipment delivers out of Storage, how is possible to have Long carries, elevators or appliances import export fees, etc, at the point of the warehouse- (the new 210 is based on the LH rates)how is this cost neutral. Waiting time used to have a separate charge for the man and van, now they combined the two rates into one (which is good) but just used a higher combined rate?
Ed , I could on and on, but I know I have used way too much space and time already. I am for simplification but not to this extent or lack of consideration for the agent, driver, packers and national accounts. I know the world of national accounts didn't request this. One last thing DOES THE "K-TARIFF" MEAN ANYTHING TO ANYONE?
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