RISING TRANSPORTATION COSTS BIGGEST REASON TO ROLL WITH SPECIALISTS

Sparta, N.J.  March 11, 2005

As the new year continues to take shape, shippers from all industries are turning to specialists as increased transportation costs are expected to exact a toll on profitability for 2005.

For many companies, logistics and transportation related expenses can be the third largest line item in the budget.  “Transportation costs will rise up to 8% this year, and the new hours of service rules could result in a productivity loss nearing 20%,” according to Scott Shearer, CEO of TOTALogistix, a third party logistics company located In Sparta, New Jersey.

"Logistics can be complex enough.  Volatile fuel costs combined with unusual market conditions such as equipment and driver shortages, capacity issues and new DOT regulations have helped transform the industry into a 'sellers market'," said Mr. Shearer.  “As our clients estimate their calandar-year transportation costs, it is becoming painfully clear that the financial impact is substantial.  Our opinion is this is a systemic problem, not a short-term one.  Our role as a logistics partner has always been to help uncomplicate the transportation process, and reduce our clients transporation costs, usually in the area of 18% or better." 

The steep increase in expenses has had a twofold effect: more interest from senior management, and new client signings as more companies come to realize they can’t just pass along these increases to their customers.

"We’ve tried for some time to manage this on our own,” said Joel Botwick, president of Prestige Window Fashions.  "As our business has grown, so have our operating expenses, including transportation costs.  We have new customers, new distribution, increased manufacturing and warehouse facilities,” noted Mr. Botwick.  “The dream of bigger business comes along with the nightmare of logistics: how are we going to make all this work efficiently?” 

"The type of industry or size of company doesn’t really matter," stated Mr. Shearer.  “What matters is that, just as plane fares differ, so do shipping costs.  You need an expert to ensure you’ve got the lowest cost and the best service.  You can’t hope the vendor will tell you.  You might be taken for more than just a ride.”

Supply chains have become longer, more complex, and more important to the overall financial well-being of the company.  With transportation accounting for 30 to 35% of the total logistics budget, (which includes administration, warehousing, order entry, and inventory carrying costs) it’s critical that companies seek expert help to manage this activity and keep the overall costs as a percentage of revenue as low as possible.

"We’re in the window fashion business,” admitted Mr. Botwick, “Not logistics.  Having help in this area lets us concentrate on what we do best.  The rest we leave up to the experts.”

TOTALogistix is a full service, third party provider with expertise in logistics and strategic planning.

For more information, contact:
Totalogistix Inc.
191 Woodport Rd
Sparta, Nj 07871
Robert Basso
Director Of Business Development
rbasso@totalogistix.com
800. 989.0054 X117

Prestige Window Fashions
Joel Botwick
195 Raritan Center Parkway
Po Box 551
Edison, Nj 08818
joel@prestigewf.com