top of page

Shipping Success: Understanding Walmart's Freight Terms and Supplier Responsibilities


Shipping Success with Walmart

Navigating Freight Terms A Supplier's Guide to Efficient Walmart covers transportation costs from supplier ship points to Walmart Distribution Centers. Staying calm can make or break your logistics operations. One crucial aspect of the Supplier Agreement process is determining the freight terms, with two primary options: Prepaid and Collect. In this article, we'll delve into the significance of freight terms and how they impact your partnership with Walmart.

What are Freight Terms? In the context of Walmart's Supplier Agreement, Freight terms refer to the agreement's provisions that outline how transportation from your facilities to Walmart's distribution centers are managed. Essentially, they dictate who bears the responsibility and costs of transporting goods.

Collect Freight Terms: Let Walmart's Wheels Roll Under collect freight terms, suppliers are in for a bit of a surprise – you don't foot the cost of transportation. Walmart takes charge of the transportation expenses from your ship points to their distribution centers. But don't start celebrating just yet! This doesn't mean you're off the hook entirely. While Walmart covers the cost, suppliers must remember that it's not a free ride. Walmart's fleet or a third-party carrier will handle the physical transportation.

But here's the catch: the actual cost of freight transportation, known as the Freight Factor, is added to the item cost you provide. So, you're indirectly contributing to the transportation costs. Collect suppliers also have specific responsibilities, such as promptly requesting routing for purchase orders for each freight term, which has different procedural requirements regardless of the freight terms.

Prepaid Freight Terms: Take Control and Compare On the other side of the spectrum are prepaid freight terms. As a prepaid supplier, you have more control over the transportation process. You're responsible for the transportation costs, but you also have the opportunity to choose your preferred carrier or third-party logistics (3PL) company. This allows for cost comparisons between carriers, potentially saving you money in the long run.

The costs incurred for prepaid freight are included in the item cost you charge to Walmart. Besides the financial responsibility, prepaid suppliers must ensure timely order preparation, choose carriers or 3PL companies wisely, and guarantee that orders are fully filled.

The Decision-Making Dilemma Deciding on your company's freight terms is more than just the financial aspect. Different freight terms come with distinct procedural requirements. Your choice impacts not only the bottom line but also the responsibilities of your team. Choosing wisely between prepaid and collect is crucial, especially when providing quotes to Walmart.

In the competitive world of retail logistics, efficient and cost-effective transportation can give you a significant edge. By understanding and strategically selecting the right freight terms, you're making a financial decision and setting the stage for streamlined operations and a successful partnership with Walmart.

Remember, whether prepaid or collect, embracing your responsibilities and making informed choices are key to keeping your retail logistics on the right track.

Conclusion Freight terms may seem like just another part of the Supplier Agreement, but they hold the power to impact your company's financial health and operational efficiency. The decision between prepaid and collect isn't taken lightly – it's a strategic move that requires a thorough understanding of your responsibilities and the procedural implications. As you embark on your retail logistics journey with Walmart, consider these freight terms not mere clauses but opportunities to shine in a competitive market.

Need help with Walmart OTIF? Over a billion dollars recovered. What are you waiting for? Let’s talk. Woodridge Retail Group is a full-service CPG broker. Our deduction recovery solutions are powered by HRG, a pioneer in deductions, including compliance, promotional, allowances, and post-audit defense, as a few examples. Clients include some of the largest brands in every category across all the major retailers. We also identify potential future deductions by auditing ahead of the retailers' cycles and providing best practice training. Learn more.


45 views

Comments


bottom of page