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Mercedes Distribution Center’s Joal Savino discusses how retailers deal with shipping during the holiday season.
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Hold -- welcome productivity is going to be down today because people -- shopping on line.
-- -- Cyber Monday a once those packages order they need to be shipped.
-- -- -- -- -- -- -- It looks for a company called Mercedes distribution center it acts as a middleman between the retailer and the shipping company orders coming on line.
And this is a veto -- amount I guess what he has witnessed today even though is the biggest day of the year for this guy he takes time out is is for -- on volume -- yes Joseph -- the program thank you very much -- I got this right you run one huge warehouse.
How's that is correct size -- for a -- football field that is correct 300000 square.
And debt -- so -- order comes online.
And you ship it out that is correct now I am told these warehouses -- -- easily.
Automated everything's computerized is that true of MC did it to some extent it's very computer driven computer oriented.
But it's very difficult to automate the actual steps.
In the e-commerce business especially we specialize a -- sales although we do a lot of -- plants flash sale you know -- dot com Jack threads where a sale goes on very high discount for limited amount of time you have to be a member to join and that the the theory being.
That you it's like the the sales of the women's.
Samples they would line up around the street to get that sale.
But there's only one of the -- same thing would flash of their limited number.
But high discount.
So the volumes can be very very -- all of us -- all of a sudden you can put on a parachute if someone wants it'll bring computers to their knees -- -- on -- so how long and is the time frame between when it all becomes an online -- when you -- this thing now well again it also depends upon the vendor.
On the -- Taylor give -- an average.
With it can depend very from six hours to 36 hours.
What has happened this things moved in the beginning when we first started to -- IE tail.
Shipments would go out so quickly the customers had no chance to change or so what happens and they say -- -- I've changed my mind.
I want to know you can't sorting out the door that is create I'll tell you guys who like a little delay -- when you know want first the same day delivery you want -- little -- now if you want same day delivery you certainly I don't know really because the customer what -- -- I did hear you -- -- -- want a little -- -- uncertain -- for several reasons first of -- -- -- economy of scale of consolidating orders.
If I have I have three -- thousand square feet.
Now you're certainly not gonna -- -- would one ordered your hand and go pick one item -- time Gordon your mind.
So you -- to consolidate orders and the more you can go to was certain densely populated area in the warehouse the more efficient until.
What -- dirty secrets of you know online shopping on Cyber Monday in terms of shipping net premium one day shipping -- doesn't exist I don't know giving it to UPS and the sentiment you nominal overnight if you wanna pay for premium -- you'll certainly get -- know what we're -- -- -- -- -- turns -- standard -- -- it's -- -- -- you -- -- those of dirty secrets here -- -- well that's Cyber Monday.
There's the during -- -- not a dirty secrets reality you're consumer you -- teacher twenty bucks.
-- -- wanna pay fifteen dollars and in transportation charges but if you use UPS or FedEx here's their ground service.
The dirty secret is yes you -- a base rate for UPS but then you add on a residential surcharges fuel surcharges out of areas -- -- But time -- get done you're paying as much for -- for shipping services has nothing to do with me as -- new getting out has to -- reality of getting it to -- How'd you make your money.
Well he'll probably come from my profit comes from handling the item and Leon -- -- pop item for no I actually charge per quarter.
We look at in order we've been doing this for a lot of years ago I can you tell me how many percentage of -- -- -- -- hundred dollar all of now you get a percentage is some people pay and a percentage I normally charge on a flat flat -- -- no matter how big the order and doing what's right but in business since 1947 were big boys we look at the job we -- -- -- -- been doing on line retail -- 1940 -- -- -- been doing fulfillment and okay online is a little bit different but it we've we've shipped I've shipped everything from tires to perfume bottle so.
We've done a little bit of everything we we know what it takes their jobs.
What can you tell us so far about the last look well -- Can -- tell you something first of all because you mentioned the course of of next day.
What is happening now in the industry is reducing the cost of transportation.
I wish I receive half a -- delivery services received for my service.
So what we're having to do now we the the Internet businesses is they have to offer a variety of shipping method including the post office.
-- -- would post office post office does a lot with the job.
Of long of long haul.
They can't do well.
People like UPS FedEx the truckers they can get -- across country in a heartbeat.
What you what the post office does -- really well.
Is delivered every house every day.
And that's which cost him for FedEx UPS and the other but they don't do so you'd like to have people who want to shorten delivery -- -- -- need to warehouse you wanted to use the post office well what's happened in California a FedEx well what's happened now is -- have what they -- consolidators.
FedEx UPS has it.
They'll take your product.
Deal -- dealt filling up on these spots in the planes in the trucks get -- across country and then put it the post office for what they call the last mile of delivery.
Tonight without a consolidated so you've got the savings of using the post office which is less.
And the the quickness of using UPS and FedEx so while it's a little bit -- the post office it's a heck of a lot less than the UPS -- FedEx.
The customer doesn't see that much of of a -- so which what they call.
What what you're striving for in this business is the customer experience customers especially -- Officials there must -- art.
But the shippers are Smart they know how to take advantage of the taxpayer pay for post office there -- that we're saying that's correct.
But taxpayer paid for believe me it's not -- -- if you look at -- today.
But 150 people in -- 300000.
Square foot warehouse that's correct on the look at all day long -- -- -- -- down the aisles to shifts.
Up and down the aisle some you know when you pick.
One of that one of the reasons that we've done well in the Internet business is our computer -- very flexible.
So we've been able to design it ourselves we're able to accommodate the different message needed for e-commerce.
So they -- went up and down the -- everything they do is very directed everything they do was done in bulk so otherwise you couldn't get it done why why did you agree to appear on the program.
Am I crazy I don't know.
I don't mind -- talking about e-commerce.
We have our web sites up by right white papers all the time on it it's exciting eleven yeah.
Most people my -- -- retard but we -- I loved I loved the the thrilled it's like a battle.
Most people of your age.
And you law if 65 years old really ruin The Rolling Stones hurled -- -- that's true if I'd like to hire him he's got a lot of energy.
Up you look great Joseph civilian up we wish you the best on this very difficult but it is great to hear from you doing your business okay thank you very much from pleasure -- gets a hold on right now -- in -- in -- I'll get back there have been calling my phone have a a walk across the camera while I'm on call and I -- confident about that -- we -- you have a -- that.
