Search

Client Update 2013-10-08 - FedEx Agreement

LPS Signs Agreement with FedEx to Lower Your Transportation Costs

LPS has negotiated a very favorable agreement with FedEx that will result in our ability to significantly lower your transportation costs! How important are transportation costs?

What do transportation costs really cost?

In the lab industry, transportation costs for even very large distributor's averages 3% of the purchase prices inbound to their warehouse and 4% outbound to your facility. "Free" freight has always been one of the most sought after vendor concessions. Why?

Reason 1 – We have all been burned before. Think of that incredible bargain you saw on TV and when you went to order it you found that the shipping and handling charges came out to more than the price of the item. So mentally we do whatever we can to prevent this from happening.

Reason 2 – Large distributors negotiate very favorable freight rates with their carriers so by offering you free freight instead of a lower price on the item, they come out ahead and you never know it.

Reason 3 – Only the very largest customers get good freight deals from distributors. The rest of us pay fuel service charges, freight from non-primary warehouses, drop ship freight, freight on "bulk" items, blue ice charges, overnight shipping charges, handling charges, and the list goes on. This is very similar to how the airlines make their profit today.

Reason 4 – Freight is a huge profit center for distributors. Most people assume that if the freight charge is near the UPS or FedX published rate, you are getting a "fair" deal. Distributors do the same thing that Lisa has done for LPS; they negotiate a great freight rate and then earn a profit on it.

One way or the other, you are paying for the freight. There is no free lunch and only the very largest customers (think many millions of dollars in annual spend) can negotiate freight terms that actually decrease the distributor's overall profit margin.

What can be done to lower transportation costs?

Monitor transportation costs as carefully as you do the price of the item. This is especially true if you feel you have been granted "partially free freight" as described above. You tend to let your guard down and only realize after it is too late (i.e., you got the product) that your wallet was just drained.

At LPS, we watch transportation costs like a hawk on every transaction. It is our job to make sure that there are no "surprises."

In most cases, it is better to have the freight billed to a 3rd party account rather than on a pre-pay and add basis. This takes away the vendors excuse to tack on fuel service charges or a profit margin.

If your company does a lot of shipping, then you may already have a preferred carrier. If you are like many small labs, you just don't have the clout nor the reason to negotiate with freight carriers.

Thanks to Lisa's excellent contract negotiation skills, you can now utilize the LPS FedEx contract whenever and wherever it will save you money!

When would you NOT want to use the LPS FedEx contract?

Some of the vendors we use truly DO have free freight. Amazon Prime is one notable example and yes, we do shop on Amazon.com on your behalf when we are looking for the best deals. Sam's Club and Costco are two other places we source from.

Some vendors heavily discount freight. Hardy Diagnostics is one vendor who ships temperature sensitive products every day from California to your lab at prices that are a fraction of what a UPS ground shipment would cost! In cases like this, the best decision is to pay their freight costs.

Summary

Freight is a major part of the expense of running a lab. While we are all very careful about monitoring the item cost we are not nearly as good about monitoring freight costs and are often lulled into a sense of security by distributors "free freight" terms.

LPS monitors freight on your behalf every day, every transaction. Just another way we save you money.

The LPS Store

Lab Procurement Services is proud to be a member of the Independent Laboratory Dealers Association


The LPS web store has commonly used lab supplies in bulk quantities at unbeatable prices!  Buy manufacturer direct and save.  We feature only our best deals.  Case quantities only.

Shop Now!

Ask An Expert!

  

Related Websites

PipetTipFinder: Find pipettors and the pipet tips that fit them.

Snapit: Safety ampuole opener.

ViveST: Sample collection and transportation without refrigeration.

Technology services and accounts payable processing provided by ScanStore.

ScanStore: Scanning Solutions

SimpleIndex: Document Scanning Software

SimpleOCR: OCR SDK & Freeware

LoanStacker: Paperless Mortgage


Conversion Chart - U.S. Standards to Metric

Interactive Periodic Table of Elements

LPS Topics

In Lab Supply Procurement, Size MattersIn Lab Supply Procurement, Size Matters

In Lab Supply Procurement, Size Matters

There is a lot of discussion today about how well the very wealthy have done over the last 15 years compared to the other 99% of the U.S. population. A parallel evolution has happened in the lab supply distribution business where the ‘A’ customers of the big distributors have the red carpet rolled out while the B, C and D customers get the Wal-Mart treatment – but without the low prices.
Maximizing Your Lab Supply ContractMaximizing Your Lab Supply Contract

Maximizing Your Lab Supply Contract

How can you get more from your lab supply contract?
Procurement as a Profit CenterProcurement as a Profit Center

Procurement as a Profit Center

Convert your procurement department from a cost center to a profit center!
Procurement OutsourcingProcurement Outsourcing

Procurement Outsourcing

Could your lab benefit from procurement outsourcing?
Profitable Procurement - An OxymoronProfitable Procurement - An Oxymoron

Profitable Procurement - An Oxymoron

Profitable Procurement is an oxymoron; a phrase that, in and of itself, is a contradiction. Predominantly, business procurement generates expenses, which are deducted from income, thereby, diminishing profitability.
Reducing the Cost of Lab ProcurementReducing the Cost of Lab Procurement

Reducing the Cost of Lab Procurement

How to reduce the cost of laboratory procurement by streamlining the Procure to Pay Cycle.
Strategic SourcingStrategic Sourcing

Strategic Sourcing

First published in Lab Manager Magazine, March 4, 2014. Reprinted with the permission of the Author.
The Changing World of Lab Supplies PricingThe Changing World of Lab Supplies Pricing

The Changing World of Lab Supplies Pricing

The Four Purchasing ParadigmsThe Four Purchasing Paradigms

The Four Purchasing Paradigms

Four strategies that lab managers use to increase the value of their purchasing dollars, and how Lab Procurement Services can help with each.
Top 10 List of Items to NegotiateTop 10 List of Items to Negotiate

Top 10 List of Items to Negotiate

When you sit down to negotiate a lab supplies contract with a major distributor, you are at a disadvantage. This is our list (far from complete) of the Top-10 items to carefully negotiate.
Vendor Consolidation vs. CompetitionVendor Consolidation vs. Competition

Vendor Consolidation vs. Competition

Are vendor consolidation and competition mutually exclusive?
Vendor QualificationVendor Qualification

Vendor Qualification

How important is vendor qualification to your lab's success?

Client Updates

Better CommunicationsBetter Communications

Better Communications

The various methods that LPS uses to communicate with their clients and customers.
Finding a Quality Tip ManufacturerFinding a Quality Tip Manufacturer

Finding a Quality Tip Manufacturer

How do you reduce what you spend on pipet tips without jeopardizing your results?
Freight ChargesFreight Charges

Freight Charges

LPS Signs Agreement with FedEx to Lower Your Transportation Costs
Frequently Asked QuestionsFrequently Asked Questions

Frequently Asked Questions

Frequently asked questions about how LPS works with it's clients to save money and decrease the cost per purchase order.
Pittcon 2015 ReportPittcon 2015 Report

Pittcon 2015 Report

Overview of Pittcon 2015 from LPS perspective. LPS is now an authorized distributor for J. G. Finneran, Shamrock, Nest Scientific and Lab Companion. An overview of their product lines is presented.
Pittcon 2016 ReportPittcon 2016 Report

Pittcon 2016 Report

Overview of Pittcon 2016 from LPS perspective. LPS is now an authorized distributor for Labnet International, Sorenson Bioscieces, Wheaton Science Products, SciCool, Ricca Chemical Company, Crystal Industries, Caledon Lab Chemicals, Neta Scientific and A & D Weighing. An overview of their product lines is presented.
Refrigeraton - It's Not That SimpleRefrigeraton - It's Not That Simple

Refrigeraton - It's Not That Simple

An analysis of all the things to consider when purchasing a laboratory refrigeration solution.
Selecting the Right ContainerSelecting the Right Container

Selecting the Right Container

Selecting the right container for the job is not easy. LPS can help.
Syringe Filters - Are you paying too much?Syringe Filters - Are you paying too much?

Syringe Filters - Are you paying too much?

How to find the best syringe filter at the best price.
The Changing LandscapeThe Changing Landscape

The Changing Landscape

Like many industries, the lab supply business is undergoing dramatic changes. What does this mean for your lab?
Water for the LabWater for the Lab

Water for the Lab

Finding the right water for your lab.