What is RCS?
Retailer Consolidation Services allows shippers to save on transportation costs and reduce compliance fines by taking advantage of a shared supply chain network. Retailer Consolidation enables brands to combine their LTL shipments with other brands going to the same big-box retailer. This service not only minimizes the shipper’s exposure to fines but also reduces the number of damages/losses and carbon emissions as they are sending fewer trucks out on the road.
On top of trying to get in the door with big-box retailers, the biggest challenge for emerging customers with a brand-new footprint is consistency. The Pandemic has caused tightened capacities which have caused more stringent On Time and In Full (OTIF) requirements for big-box retailers such as Walmart. Currently, Walmart has set their OTIF to 98% compliance with 3% fines for not meeting them. They are also requiring strict guidelines for packaging and delivery, putting a lot of pressure on suppliers to take care of things themselves. Our RCS program takes the pressure off the supplier by providing all the necessary steps for OTIF compliance from warehousing to advanced auditing and procedural consistency.
For established companies, consistency is also the driving factor. Taking the pressure off the supplier knowing they can rely on someone else to take care of the tedious compliances for shipments allows them to focus on other parts of the business, such as growing their SKUs. The consistent deliveries to retailers also increase their relationships through reliability and can catalyze adding shelf space as well as moving into better shelf locations.
What’s new in RCS?
In 2017, Walmart had an OTIF compliance requirement of 75%, which has been rising throughout the years until it announced its current 98% compliance requirement effective September 15, 2020. Other big-box retailers have been following suit with the compliance changes. With continuous changes to on-time metrics and how suppliers can deliver, Geodis RCS takes full advantage of all opportunities to ensure on-time delivery. This past month, Walmart updated their allowance for early delivery and what is counted as on-time by adding incentives to dropping into the 42 Regional Distribution Centers. In response, Geodis RCS has implemented dropping into Walmart 1-2 days early to add additional time for delivery, as well as increase opportunity for recovery if needed and still deliver on time. With this change, we were able to capture 99% on-time delivery for the end of the 3rd QTR. You can rest assured that as individual retailers continue to make changes to their compliance requirements, Geodis will adapt and meet the specific guidelines set by all of them.