CONTAINER CONTROL

In today’s extremely competitive market, it is vital that costs be controlled to preserve the thin profit margins of International Shipping. Container costs represent one of the largest impacts on pricing but are also one of the most difficult to control or even accurately cost out.
The gap between carrier’s needs in this area and their agent’s ability to meet them has been growing each year. Aging inventory, Increases in waste disposal, limitations on outside storage, and more discriminating enforcement from Transportation offices have all contributed to the escalating cost of container control.

At A-Whisco, we recognize that the success of our carrier depends on their ability to effectively control costs and file competitive rates. For this reason, we have established a comprehensive policy for maintaining the liftvan fleet.

This liftvan policy is modeled after industry standards and covers all facets of managing and maintaining a carrier’s liftvan fleet. These policies are designed with the primary focus being the carrier’s ability to remain competitive and protect the valuable asset of liftvans. If there are additional needs that you have or any issues that we have failed to address. Please call. We will do everything possible to help our carriers and to meet our primary goal; to provide the best origin and destination international service in the area.

STORAGE

In 2001, A-Whisco cleared and paved two adjoining acres for the express purpose of storing used liftvans. Even this large area does not seem large enough in the summer. It is important that crates not be allowed to stagnate for long periods. This causes space shortages and excessive aging of the crates. Carriers are strongly encouraged to begin Knocking down or relocating the crates early in the season, preferably by August.
It is generally a good idea to wait until June to make sure there will be enough inventory for your outbound traffic. Because of the severe and wet winters in this area, crates do not fair well through the winter and attrition rates are much higher. Carriers should recognize the potential for lost inventory and corresponding costs of disposal when considering postponing relocating options.

A-Whisco agrees to maintain carrier’s inventory for a period of one year from arrival. We will assume that a carriers running list of inbound crates represents an accurate inventory less any outbound, knockdowns and attrition.
A-Whisco cannot maintain inventory beyond this time period. For all purposes, inventory will only be recognized for the preceding 12 months.

DISPOSAL

More than any other cost, Disposal of unusable crates has escalated to almost unbearable levels. In the past, A-Whisco was able to utilize nearby private landfills to get rid of dilapidated crates. Local codes are now in place and we have no other options but to bring this waste to the county landfill. The tip fee alone is 90.00 per ton and does not include the labor to breakdown or transportation. The cost per crate is tabulated to be 20.00. When volume is applied, the cost is crippling.

A-Whisco’s ability to control these costs is directly related to our ability to accomplish a very high rate of reusing crates and thus reducing our waste stream.

Shipments arriving in non-M.T.M.C. crates that are not reusable (or K.D. able) will incur additional cost. In the event that a shipment arrives in non-standard or unserviceable containers, the carrier will be notified and asked what they would like to do. In this situation A-Whisco agrees to maintain the crates for a period of 6 months if the carrier elects to relocate them or attempt to reuse for a commercial application. If the carrier elects to dispose of them, A-Whisco will transport the crates at cost to the County landfill.

ATTRITION

Most carriers expect to get four trips from a liftvan on average and hope to get a fifth or sixth trip. This would correspond to an average attrition rate of 25 or 20 percent of all inbound crates. Because of A-Whisco’s extensive re-coopering program we have been able to greatly improve on these industry standards. Our carpenters are trained to repair virtually any type of damage that a liftvan may suffer. For the most part, we can repair everything except for age damage and water damage. The attrition rate that is applied to inventory is 15 percent of all inbound.

It has been documented that some carriers have intentionally directed their worst crates to be sent to this area because of the generous and economical terms that we provide to them. Obviously this is not a tolerable position.

DISASSEMBLY OF CRATES (KNOCKDOWNS)

The careful disassembly of good crates for economical reshipping overseas is one of the most desirable options for carriers to put their crates where they need them. Knocking down crates and preparing them properly is vital to the success in reuse at the other end. A-Whisco has in house crews that K.D. crates as needed. They are trained in the proper techniques to ensure reassembly and guarantee all crates can be reassembled. In 9 years, we have never had an International agent refuse to reassemble our K.D.s. Domestically speaking, American agents seem to be more difficult to work with and some friction with reassembly should be expected. When carriers must ship K.D.s to a domestic agent, please notify us so that the crates can be hand picked to avoid problems.

Our guarantee covers the cost of K.D.s that cannot be reassembled and any stuffing charges. We do not cover any corresponding freight charges or disposal fees for unusable crates. Carrier should consider this when choosing destinations for K.D.s.
A-Whisco has worked well with other K.D. companies that have come to disassemble crates. Generally, we give them the pick of crates in the yard and have had no problems working out the logistics. Nationwide crating and Mitchell K.D. service are annual visitors to our yard. We do require a certificate of insurance from the company prior to them working on our yard.

A-Whisco charges 24.00 per crate and this is billed as the crates are shipped out, usually in groups of 80 or 100.

Carriers should know that only about 55% of all available crates are good candidates for disassembly. Many crates are still considered serviceable but cannot be knocked down. Reasons include non-standard sizes, external patches, assembled with glue or lag bolts and slat sided crates.

A-Whisco, as well as all other K.D. companies, chooses the best crates for disassembly and the rest are coopered for reuse on outbound shipments.

COOPERING

Coopering is the process of fixing up used liftvans and bringing them up to M.T.M.C. requirements. Because the best crates are generally KNOCKED DOWN, the remaining crates usually need more than a little help. Our general rule is that if a carpenter can repair the crate in one hour than it should be repaired. This is roughly the equivalent of the value of the crate. Crates that are in more serious need are destroyed and disposed of.

Controlling this overhead is critical to avoid impacting on carrier’s costs. All crates require some coopering. Even like-new crates must be re-caulked, nails removed and old markings painted out. Replacing Skids, patching holes and replacing doors are all common repairs.

To help keep costs from spiraling, Carriers are encouraged to avoid purchasing substandard crates from overseas. Non-M.T.M.C. approved containers that arrive cannot be reused by our company and thus will not be coopered. Carriers should plan on the cost of relocating or disposing of these crates when pricing these inbound shipments. Standardizing crate purchases and agents methods will also help control costs.

OVERSIZED CRATES

The majority of outbound shipments require an extended crate for sofas exceeding 86”. Whenever possible, A-Whisco will reuse modified liftvans for this. It should be noted that every year, local inspectors condemn any liftvans that have been modified. Almost all extended sofas come into the area in modified liftvans(extension built onto a standard liftvan). Despite this, some inspectors require originally constructed containers and will not allow us to reuse these modified crates.

Our policy is to use the modified liftvans as a first choice. In the event that a modified liftvan is not available or an inspector has refused to allow us. We will use a Cardboard sofa crate. These are extended Tri-wall boxes that are M.T.M.C. APPROVED. If a used one is available there is no charge. If a new sofa box is needed the wholesale cost is about 80.00.

SPECIALLY CONSTUCTED EXTERNAL CRATES

These crates are most commonly required for Motorcycles. They are an additional charge above the solicited rate and as such A-Whisco will provide them for 100% of the applicable charges. A-Whisco will obtain necessary documentation and assist carriers with the billing. Boats and some unusual items also may qualify for specially constructed external crating.

OVERFLOW CONTAINERS

Overflow containers are used to improve densities and to avoid wasting full sized liftvans. The cost to construct new overflow containers from new lumber is 6.00 per cubic foot. In almost all cases, A-Whisco is able to reuse inbound overflows or to utilize lumber from destroyed crates to construct overflows.

CODE –6- REQUIREMENTS

Certain types of shipments require special size limitations. The most common is Code-6- and has a 60” height limitation. A-Whisco usually cuts down standard liftvans to the correct height and charges 25.00 per crate for the work. Other modifications can be done on a per quote basis.

STANDARDIZATION

A-Whisco strongly encourages carriers to implement worldwide standards for the purchase, maintenance and use of their liftvans. We will work with carriers to help develop procedures and train foreign agents on standard methods to streamline the process and avoid burdensome costs. This is probably the area with the most room for improvement.

A-Whisco’s website is the ideal communication vehicle to train foreign agents on effective crate management and to provide constructive feedback. Each carrier can tailor their program for inspecting and reporting issues back to them or between origin and destination agents.

As the cost of maintaining liftvan inventory continues to grow, effective management of this asset is the only option to large increases in costs.

CARRIER INVENTORY

In the past, some carriers have tried to maintain numbers on liftvans and to track each individual crate. The reality is that most crates no longer have a carrier’s name let alone any visible numbers for identifying the crate. Despite reports from overseas agents, Crates sent stateside do not correspond with the computerized inventory that carriers send us. The suggestion that we inventory and mark each crate that we receive is impossible at the current rate structure. Even if we were able to report on each crate as it arrived it would only serve to wreak havoc with a carriers assumed inventory.

Most carriers recognize that a crate is a crate and no longer take the expense of marking their crate. A-Whisco accepts responsibility for the number of crates that a carrier sends in but not for individual crates.

In the case of carriers purchasing new crates and assuming they are well marked, A-Whisco will make every effort to reuse those crates for that carrier’s outbound shipments.