Toshiba achieved a 99.3% damage-free-shipment rate while reducing costs.Here’s how.
Noted technology company Toshiba America Business Solutions is cutting costs and increasing customer satisfaction by switching from less-than-truckload (LTL) to shared truckload (STL). After Toshiba’s LTL freight started incurring damage, the company knew its next freight solution needed to keep product touchpoints to a minimum. By upgrading to Flock Freight, Toshiba cut its damage rate in half, to less than one percent.
Average Cost of Goods
The search for a cost-efficient shipping solution
In business for more than 20 years, Toshiba America Business Solutions develops new and better ways to deliver ideas and information. Its multifunction printers (MFPs), label and receipt printers and digital signage empower businesses across the United States and Latin America.
For years, Toshiba shipped sensitive electronics via LTL, which resulted in significantly high rates of product damage. In the interest of lowering damage rates, the company increased its use of truckload (TL) but paid exorbitant costs for under-utilized space. Unsatisfied with traditional shipping modes, Toshiba’s Senior Manager of Transportation and Fleet Services Al Garcia sought a cost-effective solution that would keep damage- prone goods intact with minimal touchpoints. The company tested Flock Freight’s STL solution in January 2021.
“Delivering the highest levels of quality and consistency to our clients is core to our business, which is why Toshiba made the shift to Flock Freight® as it enabled us to improve shipment success rates while simultaneously reducing costs.”
After this trial, Toshiba realized FlockDirect, Flock Freight’s terminal free STL solution, lives up to its promise of truckload-quality service for a lower price.
Problems and solutions
Toshiba’s efficient ship-to-order model results in small shipments that seldom fill a truck, pushing the organization into the LTL realm. Trans-loading in the hub-and-spoke system damaged some of Toshiba’s valuable machine shipments, significantly impacting the company’s bottom line. Toshiba’s FlockDirect freight — which avoids terminals and remains on the truck from pickup to delivery — ships damage-free 99.3 percent of the time. With fewer machines to repair, replace and reship, Toshiba’s shipping operations have become timelier and cost-efficient while also enhancing the overall customer experience.
“If Toshiba could ship every load with Flock Freight, we would.”
Although LTL rates are relatively inexpensive, the mode’s bottom-line costs quickly added up. Whether its shipments experienced reweighs, exceeded linear-foot cutoffs or required other services, the company faced numerous extra costs beyond shipping rates. Accessorial fees, which cost the average enterprise LTL shipper $880,384 in 2021, significantly increased Toshiba’s spending.
To keep its goods damage free, Toshiba pivoted to TL service mode. Though its products incurred less damage and avoided accessorials, the company found that it was paying for deck space it did not use. With FlockDirect, Toshiba pays only for the truck space it needs, and Flock Freight fills the remaining trailer capacity with other compatible shipments.
The journey to FlockDirect
When customers place orders, Toshiba ships the corresponding products to resellers across the nation, who receive palletized freight, conduct product tests and oversee final-mile delivery using company-owned trucks. Before discovering shared truckload, Toshiba sent most of its products to dealerships via LTL.
The company’s machines, which often consist of fragile materials like glass and optics, cost a lot to replace. To Toshiba’s dismay, LTL’s high damage rates made replacements a common occurrence.
For damaged products, Toshiba paid for additional unnecessary expenses such as:
Repairs, when possible.
If repairs not possible*:
Storing, then shipping the damaged product to a scrap facility.
A scrap facility to dismantle and dispose of the damaged product.
Entirely new product pulled from inventory.
Shipping the replacement product after filing a freight claim.
*Full replacements were necessary 75% of the time.
In search of lower damage rates, Toshiba shipped with as many LTL carriers as possible, but with no consistent success.
Beyond damage, LTL presented Toshiba with other challenges. Trans-loading resulted in split shipments (e.g., an MFP arriving without accessories) thereby decreasing customer satisfaction. LTL also delayed shipments for Toshiba, an issue that the pandemic-induced supply chain gridlock only exacerbated. Furthermore, LTL’s shrinking linear-foot and cubic-capacity cutoffs became increasingly difficult to manage. When Toshiba surpassed the cutoffs, costs exceeded those of TL shipping (a TL fee plus a penalty fee). Inspection fees, combined with strictly enforced accessorials, caused Toshiba’s LTL freight costs to spike.
“I’ve hired many companies, and Flock Freight is one of the easiest ones I’ve ever onboarded. The ease of implementing our partnership and quickly getting to work stood out to me. For this, I give kudos to the Flock Freight team. They’re surpassing our expectations.”
Toshiba reached a tipping point with traditional modes and officially partnered with Flock Freight in May 2021 upon learning more about the cost-effectiveness of shared truckload shipping. On top of improved service performance, Toshiba found onboarding Flock Freight and hitting the ground running with shipments almost effortless.
“With Flock Freight, my team’s questions receive prompt replies. With other providers, it’s easy to feel like you’re just an account number, but Flock Freight has a customer-first mindset that fosters strong interpersonal relationships with its shippers.”
Toshiba’s Flock Freight experience
Customer service is paramount at Toshiba; that’s why Al is especially delighted to be on the receiving end of excellent support.
As part of its customer-centric approach, Flock Freight presents Toshiba with periodic reports, which give Al transparent overviews of their performance.
“Flock Freight provides me with periodic reporting. The quarterly business reviews they present me with are relevant, and the cost savings along with the on-time performance are top-notch.”
Al Garcia GLS Senior Manager of Transportation and Fleet Services Toshiba America Business Solutions
Now that Toshiba has finally found a mode with the best of both worlds — truckload-quality service at a reasonable price — it aims to increase the amount of freight it ships via FlockDirect.
Quotes from Al Garcia, GLS Senior Manager of Transportation and Fleet Services at Toshiba America Business Solutions
About Toshiba America Business Solutions
Toshiba America Business Solutions (TABS) is a workplace solutions provider delivering an extensive portfolio of industry-recognized workflow and document management products for businesses of all sizes across the United States, Mexico, and Central and South America. TABS supports the diverse needs of today’s professionals through award-winning eSTUDIO™ multifunction printers, label and receipt printers, digital signage, managed print services and cloud solutions. Toshiba continuously focuses on the clients and communities it serves, is committed to sustainability and is recognized as a Wall Street Journal Top 100 Sustainable Company. To learn more, please visit business.toshiba.com.