Moving Tile from Point A to Point B? Here are the ABCs
 
November 1st, 2004

By Jeffrey Steele November-December 2004

We live in an era of increasing globalization, heightened border security, threats of insect infestation and myriad other 21st Century concerns. Despite the efforts of dealers and distributors to expedite importing, warehousing and delivery, moving tile from international manufacturers to customers has never been more complex.

While tile dealers and distributors once only purchased internationally from Italy, Spain and a handful of other countries, today’s marketplace includes such places as Thailand and Turkey, says Mark Shnier, vice-president of customer service and logistics with Toronto’s G.E. Shnier, a full-line distributor of ceramic tile, carpet, hardwood, and laminate floorings. Although well-established exporting countries developed sophisticated systems for dealing with foreign buyers, the same cannot be said for countries just beginning to export tile in quantity.

Freight expenses comprise an enormous part of the cost of importing tile, particularly at the lower end of the market, Shnier reports. “ Italy tends to be higher-end and higher-price point,” he observes. “The other countries might have lower-end, lower-priced tile. But the freight stays the same. High-end or low-end, [the product] weighs the same.”

Comprehending freight costs is not for the novice. “In contrast to what you’d need for a local purchase, it will require the expertise of an in-house freight manager, or maybe some kind of outside freight broker, to understand freight costs,” Shnier reports. Importers must determine whether freight costs quoted are door to door, or whether additional charges must be added to transport the tile from manufacturer to port. That could add hundreds of dollars a load, Shnier says.

“The problem with container costs is that there’s numerous surcharges—fuel, insurance, there can be surcharges for fumigation. There can be surcharges for doing the export documents. So you do need to be sure you totally understand the freight costs with all factors added in.”

Finally, imported tile is not generally sold on open credit, the way domestic manufacturers sell to distributors. The overseas supplier may insist on a letter of credit or a wire transfer of the funds before product is released.

Buggy about Inspection

In recent years, concern about insects has complicated transporting tile. “They’re worried about bugs and insects in wooden pallets that could spread insects into North America,” he notes. “If they find one bug in your load, you get put on a watch list.”

Undertaken at the source of a shipment, fumigation results in separate expenses for the cost of fumigating and proof that fumigation has been completed. Shnier reports a higher percentage of containers are being stopped for inspection. If tile is held for inspection, the importing company is levied additional freight charges for transporting the container for inspection and back to the yard. Inspections are undertaken randomly, and goods can be held for up to a week.

Sudden changes in pallet quantity pose another challenge. Consolidation is a fact of life among tile makers. When one manufacturer absorbs another, pallet quantity may change without notice. An importer may receive 10 tiles instead of the 12 he expected. These changes play havoc with the software a company uses to track shipments if employees don’t stay alert to changes, Shnier remarks.

Once shipments arrive at dealers’ or distributors’ locations, importers must cope with poorly labeled containers. “In our facility, because of the difficulty of reading supplier labels, we’ll put a ‘pallet license plate’ on each pallet to make it easier for our warehouse staff to pick the product,” Shnier says. “In our case, it’s a bar-coded license plate. And then when we pick the product, we confirm we’re picking the right product with a computer cross check on the bar code.”

The ceramic tile is now ready to be shipped to customers. But that process is complicated by the increasing size of tile. Ceramic tile needs to be shipped on edge to avoid being broken in transit. But customer demand for increasingly larger sizes of tile means tile containers can grow unwieldy.

“The package can’t weigh more than about 60 pounds, or the warehouse staff won’t be able to pick it up,” Shnier says. “Yet it has to be shipped on edge. And that makes for an unusual sized package, and for problems in shipping because nothing can be stacked on top of it.”

The resulting outgoing shipment may feature small, shallow skids that are also difficult to secure. Shnier’s firm ships to customers on open terms, pays freight, and takes responsibility for shipments. “We may be charging them for delivery, but we’re responsible for any breakage that occurs in delivery,” he says.

One importing issue that convinces many dealers to leave the transport headaches to distributors is lead time required for international tile shipments, Shnier says. Ceramic tile can be obtained from domestic suppliers a few days after ordering, he points out. International orders require three or four months to allow for production and transit time to the importer’s location.

“You also have to order in full-container quantities,” Shnier says. “A retailer could order one square foot from us, and we’ll get it to him. But when the retailer says, ‘I’m going to order this from Turkey,’ he’s got to realize he’ll be buying a full container quantity and ordering it months in advance, and often paying for it much quicker—before they put it on a container.”

The technology solution

A number of companies are harnessing technology to simplify transporting tile and other products. If he were buying a product internationally, says Scott Coleman, director of inside sales at Transplace, a major transportation logistics company, his greatest concern would be knowing where the item purchased is in the pipeline. Who has possession of the item, when will it arrive in port and who will clear customs documentation? Will the freight company have adequate liability and cargo insurance, as well as a qualified safety rating? After clearing customs, will the purchase go to a warehouse, and who will coordinate that for the purchasing company? “What we do is partner up and build alliances with those who have that expertise,” Coleman says.

Delivering the technological capabilities logistics providers require to manage their businesses more effectively is the mission of Symbol Technologies, an enterprise mobility company based in Holtsville, New York.

Gerald McNerney, the company’s principal for transportation and logistics solutions, says those in the tile business are looking for data to make sure their deliveries will be on time, and to find out where those deliveries are in the supply chain. “What they’re really looking to do is meet their customers’ expectations they’ll have the goods at a certain time and place,” McNerney observes.

Tile is moved in an intermodal fashion involving ocean shipping and rail and/or over-the-road truck networks. McNerney says border-crossing delays are a growing concern. Importers need to address several issues. First, importers must ensure complete and timely documentation is available to regulatory authorities at borders. Second, they must be able to track the goods. And third, data must be effectively transferred from carriers involved in different modes of transportation when freight is transferred from ocean to land transportation.

“One of the things we’ve done is take advantage of bar code technology and RFID (Radio Frequency Identification) technology,” McNerney says. “[Client companies are] able to track their goods in real time, and also ensure that events—border crossings, transfers of goods—take place in a timely fashion.”

Finally, tile dealers and distributors must manage the inevitable—and potentially expensive—damage that will occur in shipment. “So one of the things you want to do is make sure when you’re breaking bulk that an inspection takes place,” McNerney says. “You can have a hand held device that allows you, while taking custody of the shipment, to create a record of the damage that may have occurred through the use of signature capture or a photo image of the damage. That’s important because when you go back to your insurance company, they’ll want to have some documentation and proof of what damage occurred.”

Looking ahead, McNerney says technology will continue to help companies shorten the delivery window. “What that means is that if you’re going to order something in Italy for your customer in Chicago, you don’t want to put that order into action until you know that you’re closing the sale,” he says. “That is in contrast to stock to order, which means you order something, put it into inventory, and wait for the sale.”

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