Appointment deliveries are
handled in the Cost Information System by use of the destination dock code 4.
This
recognizes an additional cross dock handling required at the destination
terminal, first from the linehaul trailer to a storage trailer or area and again
when the freight is later moved into a vehicle for delivery.
However, in addition
to the cross-dock handlings, cost is also incurred by having to set aside and
maintain space for storage of this type of freight between the day it arrives at
the freight terminal and the appointment date.
The CIS includes a storage
activity cost, in addition to the cross dock handling, which can be set up
as part of the unit cost development. A category for expenses for storage cost
is included in the CIS expense account assignments (categories 72 and 73) and
the traffic statistics entries include two items to develop a unit cost: average
daily cubic feet stored and number of days in the financial period.
Add a storage unit cost to
the CIS profile as follows:
1. Determine
direct expenses for storage, such as allocations of expenses for terminal rent,
depreciation and security, as well as clerical costs for tracking stored freight
(but not including dock handling).
2. Determine the number of shipments stored during the same period. If
appointments are coded in Traffic/CIS, run a report on all traffic for
destination terminal “*+4” to obtain all shipments with appointment deliveries.
3. Compare storage expenses to stored shipments. If the cost per shipment is
material enough to warrant a storage unit cost, continue with steps 4 – 6.
4. Remap expense accounts containing storage costs to the storage expense
category. This can be done using the "edit GLMAP file" button on the general
ledger processing screen, found on the Action menu under the CIS Maintenance
Unit Costs Development, item Company Expenses. If only portions of
current expense accounts should apply to the storage activity, use the Expense
Allocation option of the General Ledger processing routine to split expenses in
one account between multiple activities (LTL/CIS Manual, page D-13).
5. Conduct a survey of all freight terminals, for one or more study days, to
obtain total cubic feet of freight being stored on an average day.
6. The shipment record for Traffic/CIS has a field for storage days. Logic
should be written to fill that field based on appointment code, arrive at
destination terminal date, and delivery date.
With this data, the system
will calculate a new storage cost per cubic foot day in the CIS profile,
which will apply to appointment shipments costed with the appropriate
destination dock code and days, in addition to the extra cross dock handling.
Appointment freight will then better reflect your cost of providing this extra service.
Updated February, 2005