Understand Prepaid vs Collect Freight Management

Understanding Prepaid vs. Collect Delivery

Whether fulfilling prepaid retailer orders or relying on collect pickups (Customer Pick-Up, CPU, or FOB) programs, the ability to deliver goods promptly and accurately to retailer distribution centers is paramount. This underscores the importance of strong On-Time, In-Full (OTIF) delivery performance for today’s CPG supply chains. Suppliers who fail to achieve high delivery performance don’t just face fines for non-compliance – they experience low in-stocks and sales, decreased shelf space, shrinking market share and fractured retailer relationships.

The choice between prepaid and collect shipping methods presents a critical business decision that directly impacts overall success in the marketplace. Explore the difference between Prepaid and Collect – then assess which transportation management process is right for you.

Drive Optimal Delivery Performance to Grow Retail Sales

While collect programs often appear easier to manage because the delivery requirements are less stringent than a prepaid program, they relinquish control and typically result in inconsistent shelf presence and lost sales. Shipment accuracy and timeliness requirements are in place to ensure products are on the shelf for purchase when and how consumers want to purchase them – higher delivery performance results in higher in-stocks. It’s important to engage a reliable retail logistics partner that understands the value of strong delivery performance will not only meet but exceed a retailer’s requirements – allowing products to have stronger, more consistent on-shelf presence to drive higher in-stocks and sales, grow brand loyalty, and improve buyer relationships.

Reduce Lead Times

Unlike Collect, a Prepaid Program puts suppliers in charge of their production, inventory management and forecasting, as well as shipping – offering greater flexibility, visibility and control across the supply chain. Prepaid shipping with the right 3PL avoids unexpected shipping delays common with collect programs and offers shorter lead times to store shelves, ensuring that products are more frequently in-stock and available to consumers both in-store and online and leading to more opportunities to convert new customers.

Remove Unexpected Costs

Hidden fees can drastically change any budget and make it hard to plan ahead. Leverage a fully integrated retail logistics expert that offers a transparent pricing model. Through a price transparency approach, suppliers gain insight into all surcharges and fees – making it easier to determine freight factor and make better bottom-line business decisions. Often times when a supplier uses a retailer’s collect transportation program, they lose control over scheduling, which can in turn also cause unexpected freight fees, shipping delays, and lost sales.

Streamline Compliance + Increase Visibility

To ensure compliance management with specific retailer requirements, partner with a 3PL that offers a comprehensive suite of Value-Added Services. Leveraging a full-service 3PL’s packaging, labeling, bar coding, point-of-sale displays and more, suppliers can move their products through the middle mile efficiently and with as few outside vendors as possible. This control affords suppliers valuable retail supply chain data insights to make better business decisions that drive their company forward.

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Turn freight management into a business advantage by leveraging a retail logistics expert to drive compliance, improve delivery performance and enhance supply chain efficiency.

630-424-2400 Contact Us

Turn freight management into a business advantage by leveraging a retail logistics expert to drive compliance, improve delivery performance and enhance supply chain efficiency.

630-424-2400 Contact Us

Understand Prepaid vs Collect to Optimize Freight Management

Understand Prepaid vs Collect Transportation to Grow Retail Sales