August 1, 2011

WORLDWIDE LOGISTICS
PERCENT OF INVOICE
BILL OF LADING REQUIREMENTS

Effective September 1, 2011 all shipments tendered to Worldwide Logistics that are subject to "Percent of Invoice", (POI) rating must state the standard dealer invoice pricing as well as the cubic feet of the shipment on the Bill of Lading.  In the absence of this information the shipment will be rated on a per 100 pounds, (CWT) basis.  The CWT rate will be calculated by multiplying the  agreed upon value per load times the applicable POI rate in order to determine the total revenue per load.  The product of this calculation will then be divided by the appropriate weight per load to arrive at the CWT rate.

Example:  (Load Value of $40,000.00) X (POI rate of 6%) = $2400.00/16,000 lbs  = (15.00 cwt rate)

Also, effective September 1, 2011 POI shipments that are tendered on standard pallets will be rated on a per pallet basis.  A standard pallet shall not exceed a length of 48" and a width of 40".  Shipments on oversize pallets or shipments that extend beyond the length or width of a standard pallet shall be rated as though they are two or more pallets as determined by the excess length or width of the shipment.

The standard pallet rate will be calculated by multiplying the agreed upon value per load times the applicable POI rate in order to determine the total revenue per load.  The product of this calculation will then be divided by 24 pallets per load to arrive at the per pallet rate. 

Example:  (Load value of $40,000.00) X (POI rate of 6%) = $2400.00/24 pallets = ($100.00 per pallet rate)

These requirements are necessary in order to insure that WWL is realizing the minimum value and revenue per cubic foot on a per load basis as agreed upon by our two organizations.

Thank you in advance for supplying this critical information on your Bill of Ladings.

If you have any questions, please feel free to contact your Worldwide Logistics sales representative.

Worldwide Logistics

ANNOUNCEMENT

August 1, 2011 - Worldwide Logistics will be increasing its rates on average approximately ten percent.  The ten percent increase will be the product of a GRI in its tariff of seven  percent.  The greatest impact on its rates however will be the result of WorldWide Logistics' treatment of "Percent of Invoice" (POI)  rate structures, "Seat" rate structures, "Palletized" Furniture shipments, and minimum revenue per stop.

Company officials state that Specialized Furniture Carriers have suffered far too long from the practice of POI pricing.  POI rates in general have had a very negative impact on Return on Investment due to a number factors including but not limited to under valuation, discounted shipments and carriers' inability to confirm shipment valuation.

 The application of "Seat" rates on upholstery shipments has led to further revenue degradation for Specialized  Furniture Carriers.  Seats are not a consistent uniform unit of measurement and typically fewer seats can be loaded on a trailer than anticipated as a result of the reliance of seat count representation from certain shippers.

The recent surge in the number of "Palletized" furniture shipments has had a dramatic negative impact on revenue per load.  Typically pallets are not squared off above with product and there is product overhang.  As a result loads can not be adequately cubed out above the palletized shipment and product overhang invades the adjacent foot print further reducing the ability to cube out the trailer.  The result is a lack of cubic footage space utilization and a revenue short fall on the trailer.

The growth in prepaid freight programs in recent years has resulted in overwhelming revenue declines on a per stop basis.  The reduction and in some instances the elimination of minimum charges has resulted in revenue levels that make it unprofitable to facilitate the delivery.

These rate structures and shipping practices along with ever increasing costs and government mandates are challenging the survival of the Specialized Furniture Carrier industry.  In the absence of diverting equipment to haul alternative commodities with a reasonable yield these rate adjustments are necessary and are critical to Worldwide Logistics' ability to deliver the level of service the furniture industry demands.  The net impact of these rate adjustments to the retail price of furniture  will be less than one percent.