HOW L.L. BEAN PROVIDES A COST-EFFECTIVE SERVICE FOR OFFSHORE CUSTOMERS

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1 HOW L.L. BEAN PROVIDES A COST-EFFECTIVE SERVICE FOR OFFSHORE CUSTOMERS

2 How L.L. Bean Provides a Cost-Effective Service for Offshore Customers Craig Starnes, Senior Logistics Manager L.L. Bean Kevin Unbedacht, President International Bridge / ParcelPool.com October 9, 2013

3 History and Heritage Leon Leonwood Bean, or L.L., founded our company in 1912 The cornerstones of our company are L.L. Bean s legendary guarantee and L.L. s Golden Rule Sell good merchandise at a reasonable profit, treat your customers like human beings, and they will always come back for more.

4 Customer Service is our Passion J.D. Power and Associates ranked llbean.com "Highest Customer Satisfaction among Online Apparel Retailers" its 2012 Online Apparel Retailer Satisfaction Report SM Harris Poll s shopper satisfaction study of online retailers rated L.L.Bean top among clothing and apparel companies Top ratings in ForeSee s E-Retail Holiday Satisfaction Survey Multichannel Merchant named L.L.Bean Cross channel Merchant of the Year C. Everett Koop National Health Award for 2012 for company commitment to employee health and wellness

5 L.L. Bean Today $1.52 Billion in Sales 5,000 year round employees 1.7 million sq.ft. warehouse space in Freeport, Maine 16 million packages shipped during retail & outlet stores in U.S. 82 Stores in Japan and China Customers in 50 states and 160 countries

6 Offshore Shipping Challenges The goal is to provide a great delivery experience to the customer regardless of where they live Final delivery is last impression the customer gets Keeping the balance between cost and service Quick Transit Deliver as promised L.L. Bean offers free shipping to Alaska and Hawaii

7 Providing a Great Delivery Experience Customers expectation are constantly evolving They demand a greater level of service They want faster delivery They want it delivered on their schedule, even if offshore customers are different than the norm Find providers that can help meet these challenges

8 How to Deliver Quickly Offshore delivery can be challenging Remote locations and extended transits Understand your order-to-final delivery transits Hawaii 5-7 days Alaska 6-8 days Puerto Rico 5 7 days APO/FPO variable Hold your service provider accountable

9 Deliver When the Customer Expects Commit to the customer when the shipment will be delivered Avoid large delivery windows when possible Must control internal processing time Provide different service options Let the customer determine when the shipment arrives Don t miss Christmas! Set deadlines that allow the package to deliver on time

10 Managing Costs Find the best price for the Service you require What service are you trying to provide to the customer? What kind of transit? What kind of visibility? Understand your package profile Weights Dims Destination

11 What to Keep In Mind Surcharges can add up FAST Remote Residential Understand the impact of dimensional weight on your overall expense Weight breaks Different cost structures at different weights

12 Finding the Right Solution For Offshore Shipping Understand the marketplace Know what options are available Be aware of the challenges of offshore shipping A single carrier solution may not be the best option Know your costs What is driving your expenses? How can you mitigate them? Provide a great customer experience

13 Definition/Challenges of Offshore (Zone 8/A/H/Z) Hawaii, Alaska, Puerto Rico, Guam, Virgin Islands, Military Mail (APO/FPO/DPO) and U.S. territories are all part of offshore Well over 7M customers They have fewer brick and mortar options They desire more ecommerce options They usually become very committed to those that serve them well May be the most expensive shipping/parcel Accessorial costs are the highest in these areas Dim is an important factor with air service High % of addresses are considered remote Higher % of P.O. boxes Work with a partner that can deliver quickly to P.O. boxes Some additional paperwork may be required Work with a partner that can help in this area

14 Options for the Offshore Market Integrated Carrier, Postal, or Hybrid (Regional/Postal) Ground Service (Barge, Line-haul) Options from Integrated Carriers and USPS 6 to 20+ days transit, does not build customer loyalty / satisfaction May not be the least expensive option Air (Integrator, Cargo, Commercial) Options from Integrated Carriers, USPS, and Regional Carriers 2 to 5+ days transit Be sure to compare pricing properly, look for Higher Dim factor Oz. pricing NO residential or remote area surcharges Discounted Fuel Surcharge Research your options for the BEST choice for your offshore ecommerce

15 How the Hybrid Working Together model works for offshore Regional Carrier and USPS Hybrid model provide full service/lower cost Working together may provide the BEST solution and is ECO-Friendly Skip Zone 8/A/H/Z to Zone 1 and induct at a USPS Destination Delivery Unit (DDU) Regional Carrier Consolidate & Sorts in the 48 states Fly parcels to offshore destinations (provides the zone skip) Working with Already Going There Cargo and Commercial airlines Sort to a 3 and 5 digit level at destinations 6 days a week delivery to USPS DDU s and SCF Provides scanning/tracking, USPS e-vs & manifest, custom reports, customer service USPS Covers ALL offshore locations Can deliver P.O. Boxes and Military (APO/FPO) mail Saturday deliveries at no extra charge No Accessorial or Fuel surcharges Provides final mile delivery with confirmation Already Going There final mile partner

16 Evaluations Please make sure to rate & comment on this session Do it electronically Access PARCEL Forum Mobile App on your smart phone, tablet or laptop Find this session: Rate it! Leave comments for the PARCEL Forum team If you would like a hard copy, there are a few in the back of the room The PARCEL Forum really counts on your comments to continuously improve your conference.

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