Are you an HVL shipper?
High value load (HVL) shippers usually include manufacturers of electronics, healthcare products, high end apparel, or other luxury goods. As a rule of thumb, a truckload valued at $100,000 or higher is usually considered HVL.
The Cost of Poor Logistics Performance
High value products obviously cost top dollar to buy, but they can also be expensive to sell if shippers don’t understand the importance of mastering logistics and meeting retail compliance.
Note: Calculations in this blog are based off assumed values and margins.
Heavy Retail Compliance Fees
Retailers recognize the competition for their shelf space and continue to up their expectations in return. Walmart, for example, requires suppliers to meet a 98% on-time in-full (OTIF) rate to stay in compliance. It’s strict but still gives a 2% grace window. Every unit falling outside the retailer’s good graces will cost the supplier 3% of the cost of goods sold (COGS).
These fees are even more costly to HVL shippers than the average CPG brand, since the COGS is usually much higher.
How On-Time Delivery Impacts Gross Profit
As if the fines aren’t costly enough, consider the direct hit an HVL shipper’s gross profit takes for not meeting OTIF. Where the average consumer-packaged goods companies usually operate between a 25% and 45% gross margin, many HVL shippers operate closer to 60%.
| Annual Revenue | On-Time Delivery Performance | Gross Profit |
|---|---|---|
| $10 Million | 77% | $4,620,000 |
| $10 Million | 95% | $5,700,000 |
This example assumes a 60% gross profit margin.
The difference between sourcing an average broker to handle your freight (77%) and hitting the performance retail buyers expect (95% or better) is $1,080,000 in gross profit opportunity.
What would you do with one million extra dollars?
Here’s one idea. Most CPG companies allocate 7-9% of their gross profit to transportation spend. For a $10 Million company, the amount of money mastering on-time delivery saves covers that expense ($700,000-$900,000) completely. This point of view shows us logistics isn’t a cost center, but rather a profit driver when you trust the right partners.
Not meeting OTIF or getting your product on the shelf is even more costly when shipping products with such high value. With the unpredictable nature of the freight market, HVL shippers destined for retail locations must really step their game up.
HVL Shippers Thrive with Zipline Logistics
The best way to do that? Partnering with a 3PL that specializes in high-visibility retail deliveries and handling high-value products. At Zipline, we have very specific processes and protections to ensure our HVL customers are on-shelf at top locations on-time and in-full.
Zipline Carrier Qualification Process
Before onboarding, Zipline Logistics conducts an in-depth background check to ensure all carriers we work with meet the below criteria.
DOT and FMCSA Requirements:
- Minimum auto liability of $1,000,000
- Minimum cargo liability of $100,000
- Equipment that is no more than 10 years old
Zipline Logistics Carrier Expectations:
- No history of fraud
- Experience shipping into retail
- GPS tracking capabilities
- Consistent check-ins
- On-time performance
Zipline HVL Process: From Pickup to Delivery
Our carriers are advised and held accountable to the best practices below when handling HVLs.
Before accepting an HVL assignment, drivers must:
- Ensure they have sufficient hours and fuel available to drive at least 150 miles without stopping, where applicable.
- Complete a thorough inspection of the truck and trailer or container to reduce the risk of breaking down in transit.
- Use the most direct and safe route to their destination.
While a high value load is in transit:
- Team drivers should be used whenever possible to avoid frequent stops.
- The truck and trailer must always remain hooked until the load is delivered.
- The driver should contact 911 and follow company protocol if they notice anything unusual or suspicious.
When stopping, drivers should:
- Park in a well lit area (against a building or pole) to prevent the rear doors from being opened.
- Lock all doors and remove ignition keys when exiting the vehicle.
- The driver should communicate with dispatch and inspect the seal at each stop, checking the seal number against BOL paperwork.
- Avoid stopping in high-risk locations.
When delivering a high value load:
- Shipments are never to be taken to the driver’s home (or the homes of relatives or friends).
- It must be taken to a secured drop yard.
Zipline HVL Insurance Coverages
Zipline Logistics maintains generous umbrella liability insurance. For more information, contact Zipline using the button below.
Trust Zipline With Your HVL Shipments
Specialized in high-visibility retail deliveries and handling high-value products, we are so much more than a rate and a truck. At Zipline, we leverage our retailer logistics expertise, best-in-class processes, and uniquely qualified carrier network to ensure our high value customers are on-shelf at top locations on-time and in-full.
MEET WITH A RETAIL LOGISTICS CONSULTANT
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