For many shippers, freight needs can vary as much as customer demand. There is no "one size fits all" in the freight industry, a truth that was recently discovered by leading provider of home décor products, Celebrating Home. Like many companies, Celebrating Home had different distribution needs for different products and was looking for a way to get time-sensitive but non-urgent products to market faster than via traditional ocean freight services, without having to incur the additional expense of air freight.
At the same time, UPS had just rolled out a new ocean freight service that leveraged the company's North American ground network combined with containerized ocean services to provide, depending upon the origin and destination, up to 40 percent faster port-to-door overseas delivery than UPS's traditional less-than-container-load (LCL) services – without the additional costs of air freight.
"We saw an article in one of our shipping magazines about the new UPS LCL service that provided improved transit times over traditional LCL shipments," said Tom Walburgh, director of supply chain management "This really peaked our interest because we often found ourselves in situations where we required a service that was faster than traditional ocean freight, but more affordable than air freight."
The company soon came on board as one of the first to utilize this new service, and found that UPS's Preferred LCL service was a solution that could bring added flexibility across Celebrating Home's supply chain for various scenarios that required speed, but not urgency.
Homing in on a New Supply Chain Solution
A private company headquartered in Marshall, Texas, Celebrating Home provides a range of products from small furniture to in-home décor items. Originally founded as "Home & Garden Party" in 1996 by Penny and Steve Carlile, the company defines its mission as developing a business where women can obtain the "American dream" by bringing families and friends together through entertaining and decorating accessories. In 2008, the Carliles acquired the company's largest direct-selling competitor, Home Interiors & Gifts, to eventually establish Celebrating Home in early 2009.
With more than 40,000 independent designers selling products nationwide and in Puerto Rico through various channels including magazines, online and in-home parties, Celebrating Home manages a complex supply chain of various products such as imported pottery, ceramics, mirrors and candle holders.
"We have an office in Hong Kong and work with manufacturers throughout Asia and the U.S. to provide our customers with an exclusive collection of unique products," said Walburgh. "We produce two to three catalogues a year, each with about 750 different products. Compound our vast offering with our promise to deliver products to our customers within nine days of ordering, and you can understand why the option for an expedited LCL service was of interest to us."
To anticipate and meet customer demand, Celebrating Home primarily ships full container loads of new products to the company's 600,000 square foot distribution center in Marshall, Texas, two to three months leading up to the launch of a new catalogue. All products are then shipped directly to Celebrating Home's customers from this location. "We typically ship heavily in May and June for the August catalogue and then again in October to get ready for the holiday rush, and finally in November for the January catalogue," said Walburgh.
UPS Rallies for Celebrating Home
When Celebrating Home initially approached UPS in 2011, the company was interested in utilizing the new UPS Preferred LCL service to ship new product samples for the annual Celebrating Home sales rally in Dallas. "We needed 10 samples of about 50 new products to display at the annual rally, and they were coming from 15 to 20 different manufacturers in Asia," said Walburgh. "In the past, we would have been forced to ship these items via air freight to have them in time, or do without. In this case, UPS Preferred LCL was the perfect fit for what we needed because we were shipping smaller quantities, not full containers. Additionally, we were working under a tighter timeframe than usual, but not so tight that we required the speed of air freight."
"Because the UPS Preferred LCL service is available for multiple lanes from South China, we were able to handle rally shipments from vendors in multiple cities including Shanghai, Xiamen, Ningbo and South China," said Nikki Hanna, senior account manager for UPS freight forwarding customers in Louisiana and East Texas. "The extensive UPS global network allowed UPS to handle every piece of this move, including collecting the shipments directly from vendors' doors, transporting them to the port and ultimately delivering them to the corporate office in Marshall, Texas."
In addition to handling the entire shipping process, UPS set up its UPS Flex® Global View visibility solution as part of the implementation of UPS Preferred LCL service with Celebrating Home. UPS Flex® Global View offers customers increased visibility by providing them with information on documentation and products as their freight goes through major milestones in the shipping process.
Celebrating Results at Home
The success of the UPS Preferred LCL shipments for the Celebrating Home 2011 sales rally meant the company was able to quickly obtain and display its new products at the event without paying fees associated with an air freight movement.
"Typically, we are looking at a 29-day service with traditional ocean freight shipping, but we were able to save about seven to nine days with UPS Preferred LCL," said Walburgh. "That's a difference of a three-week lead time versus four weeks."
As for the cost savings, Walburgh says shipping samples for the rally via air freight would have been at least 50 to 75 percent higher.
Another benefit Celebrating Home experienced with UPS Preferred LCL was reduced product damage. Celebrating Home ships a lot of fragile items, and because this service cuts out the de-consolidation step at the U.S. port and puts freight directly into the UPS network, there are fewer hand-offs and opportunities for damage versus traditional LCL services.
Based on its success with UPS's Preferred LCL service, Celebrating Home has found reasons to celebrate beyond the successful sales rally. "Going forward, we are examining the use of Preferred LCL on a continual basis for items that need to be expedited, but do not require the speed of air freight. This could prove particularly useful for products that sell better than anticipated and require restocking in a hurry."
This type of supply chain flexibility can mean numerous advantages for companies, especially when considering that the added flexibility comes at an economical price point. With services like faster LCL offerings, the tide has changed in the freight industry, meaning a sea of options for companies doing business internationally that have different timing needs for different products.