Your company can put the brakes on truckng costs by joining a nonprofit shipping association. There are more than 150 associations nationwide that serves as cooperatives by consolidating members' freight to take advantage of volume transportation rates. Average annual dues are $150.
Each association leases or buys a central freight house where the freight of manufacturers or retailers is sorted and matched so that the association can pool less-than-truckload (LTL) shipments into far more economical full truckload (TL) shipments. LTL rates are usually two to three times higher than TL rates. Associations are generally made up of either retailers or manufacturers, often depending on the locally prevalent type of business. As long as either the shipper or the receiver is a member of the cooperative, both parties may participate.
Bud Jennings & Sons Carpets Inc., a $2-million carpet retailer in Lawrence, Kans., is a member of the Kansas City Shippers' Association Inc. in Missouri, which predominantly serves retailers. Jennings and other member stores call manufacturers when they need a shipment, and ask them to channel it through a Dalton, Ga., warehouse. The association in turn commissions a trucker to haul the shipments and bills each store according to TL rates.
Several times a week, Jennings receives about 5,000 pounds of carpet from manufacturers in the Dalton vicinity who have combined Kansas City loads at the association's Dalton freight house. "When we need a shipment, we call our suppliers in the Dalton area and have them send it via the Kansas City route," says Jennings vice-president Thomas Jennings. "We almost never have any delays." The company's monthly hauling bill from the association comes to about $3,000 -- commissioning a common carrier to make LTL shipments.
World Carpets Inc., a Dalton carpet manufacturer and supplier for Jennings & Sons, gains a competitive edge by being a member because pooling enables it to avoid LTL rates when sending to nonmembers. "Membership can be advantageous whether you're shipping or receiver," notes Claude Wooten, World Carpet traffic managr.
Dale McClelland, executive vice-president of the Kansas City Shippers' Association, explains that cooperative shipping works as long as the commodities being shipped are compatible. Incompatible commodities, for instance, would be apparel and containers of acid. "Any company that finds itself regularly sending LTL loads to the same geographical location should consider joining an association," Wooten says, noting that his association handles about 185 members in the Kansas City area. "An important thing to remember is that a crucial purpose of associations is to help companies save on freight costs. Unfortunately, many businessmen don't even know they exist."
For more information on shippers' associations, call the American Institute for Shippers' Associations Inc. in Washington, D.C., at (202) 628-0933.