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When Distribution Centers Misinterpret Overages and Shortages, Suppliers Lose Millions


It is common for retailers to issue multiple types of purchase orders to their vendors weekly. To distinguish them, vendors typically deliver multiple pallets, one for each type of order, and they arrive at the DC on the same date and at the same time. Matarazzo explains, “In the case of a mismatched PO, one pallet from the same vendor might be found to be 100 units over and the other 100 units short due to receiving product against the wrong purchase order. It’s not too big of a deal when you are dealing with cans of soup, but when you are dealing with laptop computers, it can be financially devastating to a supplier.”

Chain of custody monitoring is one method of proactively addressing the root causes of the problem. By using detailed documentation and taking photographs at every stage of the process, from picking the product, building the order, staging, loading, and unloading, vendors have clear evidence of how the shipment was ultimately received. Freight should be transacted on the dock with a bill of lading that confirms the details and accuracy of each shipment. However, truck drivers are frequently not allowed on the dock to oversee delivery leading to a lack of transparency, which corrupts the proper chain of custody.
Many distribution centers are under pressure to meet time constraints when unloading and counting a shipment. If they reach their time limit, one workaround is to sign off on a bill of lading as receiving “0” or “STC, Said to Contain or Subject to Count,” assuring the driver that it will all work out in the receiving process. This is clearly not an ideal situation for anyone.

Fusion Transport has 40 years of experience providing full-truckload and less-than-truckload (LTL) services that save their clients time, money, and hassle when moving freight. As the leader in tech-driven freight management solutions, Fusion Transport’s platform integrates assistance with analytics, tracking financials, managing inventory, and maintaining CRM systems, streamlining and automating processes for faster and more accurate tracking of supplies and inventory to reduce cost and improve shipping performance.
Matarazzo advises, “With better collaboration and communication between retailers, suppliers, and the trucking industry, these shipping and receiving challenges can easily become opportunities to make the supply chain more transparent and less complex.”

About Fusion Transport
Freight industry visionary Frank Matarazzo responded to the complex challenges of shipping logistics, consumer demands, and the need for advanced supply chain solutions by creating Fusion Transport. Emerging from two third-party logistics brokerages and based in Rutherford, NJ, Fusion Transport has become a pivotal force in retail consolidation and is now a leader in technology-driven freight management solutions. With over 40 years of expertise, the company is revolutionizing the North American less-than-truckload (LTL) network through a technology-based approach that not only meets market demands but also reduces the inefficiencies typically seen in traditional LTL carrier networks. This innovative strategy offers a more streamlined and cost-effective option for shipping merchandise in LTL quantities across the country, epitomizing the disruptive, customer-focused ethos of Fusion Transport. For more information, visit their website at https://www.fusiontransport.com/.

References:

  1. Schneider, Will. “Exploring the Number of Warehouses in the U.S. from 2007-2023.” Warehousing and Fulfillment | Find the Best Warehousing and Fulfillment Services, 7 Feb. 2024, warehousingandfulfillment.com/warehousing-and-fulfillment-resources/exploring-the-number-of-warehouses-in-the-us-from-2007-2023/.
  2. Marcus Lu Article/Editing: “Ranked: The Biggest Retailers in the U.S. by Revenue.” Visual Capitalist, 24 Nov. 2023, visualcapitalist.com/biggest-retailers-in-the-us/#:~:text=Ranked%3A%20America’s%20Biggest%20Retailers,global%20sales%20crossing%20%24600%20billion.
  3. “Walmart’s Supply Chain: A Detailed Look at How They Manage It.” Vector, withvector.com/resource/walmarts-supply-chain-a-detailed-look-at-how-they-manage-it/. Accessed 22 May 2024.
  4. Tumisang Bogwasi 2X Award-Winning Entrepreneur | Empowering Brands to Generate Leads, et al. “The Biggest USA Retail Companies in 2024.” Brimco, 14 May 2024, brimco.io/the-biggest-usa-retail-companies/.
  5. “NRF Forecasts Retail Sales to Reach at Least $5.23 Trillion in 2024.” NRF, 20 Mar. 2024, nrf.com/media-center/press-releases/nrf-forecasts-retail-sales-reach-least-523-trillion-2024.
  6. “Walmart’s New SQEP Program: 3 Things for Suppliers to Know.” Harvest Group, 13 Dec. 2022, harvestgroup.com/walmarts-new-sqep-program/.

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