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It's possible for distributors to build a program to recover freight costs or even make it a profit center, as one distributor outlined in How Partners Cut Costs.
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There are three keys to an aggressive freight recovery program. The first is attitude. Freight is a service, and it's OK to make a profit. But that requires changing your internal culture to "not give it away" and control freight cost. Bill customers freight unless you are contractually obligated to absorb it. Next: Evaluate your customer base to determine who you can or cannot bill for freight. In the July 25 issue of MDM Premium, MDM examined this question in When You Should Charge Separately .
And finally, accomplish freight recovery by using your current business system. The more automated this process, the better. This makes it easier to institutionalize.
Buy-in to the program is key, which requires educating salespeople and customers about how you are working to reduce internal costs through this program. In the end, a successful implementation of a freight recovery program will go right to the bottom line.
