Logistics Guide Terms and Conditions

Transcription

1 Logistics Guide Terms and Conditions Change Pages Date ASN (Advance Ship 8 10/19/16 Notice) Shipment Samples /19/16 Replenishment Packaging 17 10/19/16

2 TABLE OF CONTENTS INTRODUCTION 3 KEY CONTACTS 4 ROUTING GUIDE 6 SHIPMENT SAMPLES 11 INVOICING 13 PACKING SLIPS 14 PACKING 16 ECOMMERCE PACKING 19 CARTONS 24 BILL OF LADING 26 SPLIT SHIPMENTS 31 SHIPPING/RECEIPT DATES 32 CROSSDOCK 33 MASTER BUNDLES 34 ASSORTMENT PACKS 35 DAMAGES 36 TICKETING INFORMATION 37 DIRECT LETTER OF CREDIT LATE SHIPMENT PENALTIES 39 EXCESS SHIPMENTS PENALTIES 40 CONDITIONS OF THE PURCHASE ORDER 41 POLICY STATEMENT AND TERMS ON LABELING AND TRANSHIPMENTS 44 PAYMENT METHOD FOR MERCHANDISE VENDORS 45 ADDITIONAL CONDITIONS FOR MERCHANDISE COVERED BY LETTERS OF CREDIT 46 ROUTING CHART BY STATE 47 2

3 INTRODUCTION With any vendor/retailer working relationship it is very important to define expectations. Product quality, shipping windows, production and product availability are just some of these expectations. In retail, the role of logistics is one aspect taking on a greater importance in producing higher levels of productivity, improving product flow to the selling floor, reducing inventories and overall cost reduction for both the retailer and vendor. With this in mind, the CATO Corporation (CATO) has developed these logistical and marking requirements. These requirements are very clear and concise vendor expectations. All of the standards contained herein are consistent with the standard practices prevalent throughout the retail industry. While critical to our mutual success, these provisions allow CATO to optimize its freight expense, receive and process merchandise in a timely and cost effective manner, thus assuring a continuous flow of merchandise to our stores. All instructions, terms, and expectations must be fully complied with and become applicable to all shipments consigned to CATO, regardless of who is responsible for the freight charges. Failure to comply in full with these instructions and the terms of our purchase order may create an additional and unnecessary freight cost, unacceptable delays in transit time, and/or unnecessary labor cost, which will be passed on to you, the vendor in the form of a chargeback. Please read this guide carefully as numerous additions and revisions have been made. This guide is to be used in routing all merchandise and non-merchandise shipments to the CATO Distribution Center in Charlotte, North Carolina. Please forward a copy to all personnel having shipping responsibilities with or on behalf of your company. If you have any questions or compliance concerns regarding these instructions please contact the designated person or department in the Key Contacts section listed on page 4. Your continued cooperation with the terms of our purchase order and logistics guide is greatly appreciated. Your strict compliance will be most helpful in aiding our expediting of merchandise throughout the receiving/marking cycle and into our retail sales locations to the mutual benefit of all. 3

4 KEY CONTACTS All questions or concerns regarding price tickets should be directed to: The Cato Corporation Attn: Ticketing Preparation Department PO Box Charlotte, NC All questions or concerns regarding packing slips, packing, carton marking requirements, crossdock, chargebacks and shipping penalties should be directed to: The Cato Corporation Attn: Vendor Compliance Department PO Box Charlotte, NC Telephone: Fax: All questions or concerns regarding routing, shipment instructions, or volume shipments should be directed to: The Cato Corporation Attn: Corporate Transportation Department PO Box Charlotte, NC Telephone: Fax: All questions or concerns regarding original invoices, invoicing instructions or invoice payment should be directed to: The Cato Corporation Attn: Corporate Accounts Payable PO Box Charlotte, NC Telephone: Fax: To contact the Cato, It's Fashion or Versona buying staff please call: The Cato Corporation Telephone:

5 KEY CONTACTS All questions or concerns regarding brand label merchandise should be directed to: The Cato Corporation Attn: Product Development PO Box Charlotte, NC All questions or concerns regarding the technical manual, body forms and fit samples should be directed to: The Cato Corporation Attn: Technical Design Services PO Box Charlotte, NC All questions or concerns regarding color information including lab dips, color standards and label placement should be directed to: The Cato Corporation Attn: Fashion Merchandising PO Box Charlotte, NC Telephone: All questions or concerns regarding quality assurance, specifications on label ordering, market vendor quality and testing policy should be directed to: The Cato Corporation Attn: Quality Assurance PO Box Charlotte, NC All questions or concerns regarding General Conformity Certificates should be directed to: The Cato Corporation Attn: Import Department PO Box Charlotte, NC Telephone: To contact the website administrator, 5

6 ROUTING GUIDE This guide applies to all shipments including FOB Consolidator and FOB Plant/Warehouse and FOB Point CY/CFS (Container Yard/Container Freight Station). CATO agrees to possession and ownership of the merchandise: Import: At the FOB Point CY/CFS (Container Yard/Container Freight Station). Domestic: FOB Origin freight collect or FOB NY Consolidator freight prepaid. See the Routing Chart by State for more information. This guide applies on single order and truckload shipments. Failure to comply with this manual will result in freight and an administrative chargeback. If for any reason, you are unable to comply with these provisions or if you have any questions regarding the interpretation of this guide, please contact the CATO Traffic Department at (704) Your Company Trucks When shipments are going to be delivered by your own company truck to the CATO Distribution Center in Charlotte, you must make a delivery appointment. Call the Receiving Department at (704) to schedule an appointment. UPS/FEDEX Ground/Parcel Post All claims and tracers involving UPS/FedEx Ground must be filed by you as the shipper. It is important that you retain complete records on all shipments made for our account via UPS/FedEx Ground. A UPS/FedEx Ground proof of delivery must include a copy of the UPS/FedEx Ground daily delivery record. Insure parcel post shipments; declare value on express shipments. 6

7 ROUTING GUIDE Full Truckload and/or Shipments Over 10,000 Pounds CATO may choose to utilize a truckload carrier to move larger volume shipments. Normal operating procedure for these carriers is to transport a trailer loaded and sealed by the shipper directly to our Distribution Center in Charlotte, NC. A truckload carrier does not offer driver loading services free of charge. All freight is to be floor loaded. Do not load freight on skids unless with written approval from the CATO Director of Transportation. Before pick up, it is your responsibility to contact the CATO Traffic Department. We prefer that you us. Send to traffic@catocorp.com. We require that you notify us 48 hours in advance of pickup date. Failure to do so could result in shipping outside the window. When the pickup is scheduled, the CATO Traffic Department will reply to you with carrier information. The carrier will contact you to schedule a pickup time. You must the following information (i.e.; manifest, bill of lading, etc.): Your company name. All purchase order numbers showing the cartons and weight for each purchase order. The total cubic feet of the entire shipment. The total weight of the entire shipment. The shipping window (cancel date). to: traffic@catocorp.com Note: To find the cubic feet of your shipment, you multiply the length by the height by the width of your carton. Divide this number by 1,728. This will give you the cubic feet of your carton. Example: You have 900 cartons; each carton is 20 inches in length by 15 inches in height by 12 inches in width. 20 x 15 x 12 = 3600 cubic inches 3600/1728 = 2.08 cubic feet per carton x 900 cartons = 1,875 cubic feet 1,875 is the total cubic feet of your shipment. 7

8 ROUTING GUIDE For full truckload shipments, it is your responsibility to: Load, count and seal all trailers. Our terms of sale are F.O.B. Origin, Loaded on board the vehicle and sealed for transport. CATO agrees to possession and ownership of the merchandise at the FOB Point City Container Yard or Container Freight Station. The FOB Point City is listed on the purchase order. Note Shipper Load and Count on all copies of the bill of lading. Record the seal number on the bill of lading. List all purchase order numbers, total cartons and weight for each purchase order on bill of lading or attach a manifest with same information to the bill of lading. Load all trailers in the order that the purchase orders are listed on the bill of lading and/or manifest. Trailers should be loaded maintaining individual purchase order integrity to allow minimum labor at unloading at our receiving dock. Mixing of purchase orders throughout the trailer(s) can cause additional time and labor at point of unloading. These delays not only cost CATO, but your company as well. Mixing of orders on a trailer will result in a chargeback against your company. Do not call our carrier for a truckload shipment without contacting CATO first. Do not split Purchase Order line items between trailers and our consolidator. If loading of trailer creates an overflow, call CATO for disposition of overflow. Must provide at least 48 hour advance notice of pickup. Do not ship truckload shipments unless instructed to do so by the CATO Traffic Department. Vendors are to oversee drivers locking and sealing trailer prior to trailer departing their facility. You must have your shipment ready for pickup at the scheduled pickup time. You will have one free hour for West Coast vendors, and two hours free time for all other shipments, to load the trailer. Any charges billed to CATO from the carrier for loading and/or detention time will be charged back to you. It is the vendor s responsibility to request that the shipment be picked up within the start/cancel dates on the Purchase Order. CATO will not monitor start/cancel dates when the pickup request is received. ASN (Advance Ship Notice) If shipping direct to the Cato Distribution Center, an ASN must be completed on-line. Registration and instructions are located at Catovendors.com under TPM (Cato ASN) The ASN must be completed and shipped the day the merchandise is picked up by the carrier. **Note: The ship date is the date the ASN is completed and must fall within the PO ship window to avoid a charge back. If you have any questions, please contact Vendor Compliance at vendor_compliance@catocorp.com. 8

9 ROUTING GUIDE Routing and Chargeback Information These routing instructions are an integral part of our purchase order contract and are applicable to all shipments where CATO absorbs all or part of the freight cost. Failure to follow these instructions with or without incurring higher cost shall be considered as your agreement to pay all freight cost including detention, redelivery costs, loss and damages incurred through your failure to comply. If you have any questions, contact the: Traffic Department Phone: (704) Fax: (704) Address: 8100 Denmark Road Charlotte, NC Air Freight Do not ship via air freight at the expense of CATO. Any deviation must be approved by the CATO Traffic Department. A chargeback will be issued for the full amount of air freight. Bill of Lading All orders shipped on the same day must be on one Bill of Lading, NO EXCEPTIONS. Complete Orders All orders must be shipped complete. All backorders and/or split shipments must be shipped prepaid at VENDOR S expense. Any deviation must have buyer s written approval. West Coast Vendors All West Coast vendors will be issued a chargeback for one half of the freight charge (AZ, CA, NV, OR, WA). Chargeback fee All vendors will incur an Administrative Fee on all freight chargebacks. BUYERS Buyers DO NOT have the authority to change routing instructions. Lead Carton A chargeback will be issued if the lead carton does not contain a copy of the Invoice or Packing Slip. Correspondence Any or all freight chargebacks, purchase order violations, and return to vendor charges must be initiated within six months of the date of the chargeback. Correspondence concerning chargebacks older than six months will not be researched or addressed. 9

10 ROUTING GUIDE Shipment Pick Up If your scheduled pick up is not made on time, please notify the CATO Traffic Department at (704) or Carton Shortage and/or Merchandise Shortages If your invoice is paid short because of a shortage of cartons and/or merchandise shortages from cartons, you must contact the Accounts Payable Department. Neither the Traffic Department nor the Receiving Department can give you any information concerning your shipment. If our consolidators or our LTL carriers lose any cartons, we will file a claim against the shortage. Concealed shortages, when accompanied by a clear proof of delivery, are the sole responsibility of the shipper. Returns to Vendors (RTV) CATO is committed to offering quality merchandise to our customers. To ensure this goal is met, all CATO product must pass through our quality assurance process. If any merchandise is found unacceptable: The merchandise will be returned to the vendor at the vendor s expense including a 25 charge per piece to remove and/or obliterate all CATO main labels and price tickets plus all freight cost associated with the purchase order line number and a $ administrative fee. If the vendor chooses to destroy the merchandise instead, a disposal fee will be deducted from any open invoices. All orders received by CATO will be inspected by our internal Quality Assurance and Product Development departments. A percentage of each order is pulled for sampling. The samples are checked for any damages, sizing, quality of the garment, and if it meets the buyer s specifications. All and/or any part of an order may be rejected if there is nonconformity. Vendors are responsible for any charge due to sortation and handling for noncompliance and/or nonconformity. Once return authorization is received by our Shipping Department, shipping is arranged to a third party facility where all CATO main labels and price tickets will be removed or obliterated. The vendor must select a carrier to pick up the merchandise when the return authorization number is provided. If not selected when the RA# is provided, merchandise will be picked up by CATO s carrier and the vendor will be responsible for all freight cost. Merchandise left at the facility after the scheduled pick up date will be charged storage fees and if not picked up with 30 days from third party will be abandoned and disposed of at CATO s discretion unless alternative plans have been arranged. 10

11 SHIPMENT SAMPLES Shipping Samples Requested samples must be sent FedEx or UPS with SAMPLES ENCLOSED on the shipping label to: The CATO Corporation 8100 Denmark Road Charlotte, NC DIVISION: List the correct division (Cato, It s Fashion or Versona) ATTENTION: Buyer s First and Last Name or Product Manager s First and Last Name Sample Request Policy - All product categories with the exception of fragrances All Domestic Vendors Cato / It s Fashion / Versona Divisions Send Buyer every style Send Buyer every style and color Pre-production Sample X Top of Production Sample X All Import Vendors Cato / It s Fashion / Versona Divisions Send Product Manager every style, any color Send Product Manager every style and color Exception: Accessories/Jewelry Pre-production Sample X Top of Production Sample X Send Product Manager every style and color X X Shoes Send Product Manager every style and color X Vendors must retain a top of production sample for every style/color for 30 days after the style/color is shipped to the Cato Division. 11

12 SHIPMENT SAMPLES ecommerce Sample Request Policy If the PO/line is designated as *** ecommerce ***, the vendor must send the Cato Division an ecommerce sample. A Pre-production or Top of Production must have been previously approved. The ecommerce Sample must be shipped within one (1) week of the approval of the Pre- production or Top of Production. All samples must be ticketed, labeled or carded as designated on the PO/line. Cato Division only TYPE SIZE COLOR Junior/Misses Apparel and dresses Small Size 4 A sample for each color ordered for ecommerce Plus Size Apparel All pants and shorts Size 18W or 18/20 A sample for each color ordered for ecommerce Shoes DOMESTIC VENDORS ONLY Size 7, right shoe only A sample for each color ordered for ecommerce If any samples must be returned to the vendor, the vendor s FedEx or UPS account will be charged. If charges are refused for any reason, a chargeback of an administrative fee of $100 plus freight cost will be deducted from your next payment. 12

13 INVOICING The original invoice must be mailed to: CATO Accounts Payable Dept. PO Box Charlotte, NC (704) or- IT S FASHION! Accounts Payable Dept. PO Box Charlotte, NC (704) or- Versona Accounts Payable Dept. PO Box Charlotte, NC (704) Based on shipment, an invoice is required for each purchase order number detailed by carton ID number (line number on the purchase order). Failure to comply will result in a chargeback of $100 for each incorrectly invoiced purchase order number. All the following information must be clearly indicated on each invoice: CATO s purchase order number. CATO s department number. The number of cartons for each carton ID number (line number on the purchase order) covered by the invoice. All carton ID numbers shipped on the purchase order. The total number of units and extended cost for each carton ID number. The current correspondence address. The current payee for ACH payment. 13

14 PACKING SLIPS A separate packing slip for each carton ID number (line number on the purchase order) or a copy of the invoice for the total purchase order, detailed by carton ID number (line number on the purchase order), must be affixed to the outside of the lead carton. The carton ID number that corresponds to the merchandise should be highlighted on the packing slip. The lead carton with the packing slip for each carton ID number (line number on the purchase order) or a copy of the invoice for the total purchase order, detailed by carton ID number (line number on the purchase order), must be clearly identified as the lead carton. If multiple purchase orders are packed in a crossdock carton, all of the purchase order packing slips must accompany the lead carton. The packing slip or copy of the invoice must clearly indicate: The purchase order number and carton ID number (line number on the purchase order) covered by the packing slip or copy of the invoice. If multiple purchase orders are packed in a crossdock carton, all purchase orders in the carton must be referenced on each purchase order s packing slip. The number of cartons in the shipment. The total number of cartons per Carton ID number. The total number of units per Carton ID number. Each purchase order number and carton ID number (line number on the purchase order) or multiple purchase orders packed in a crossdock carton received without the stipulated packing slip in the lead carton will be subject to a chargeback of an administrative fee of $100. Each packing slip or copy of the invoice must be detailed by carton ID number or the shipment will be subject to a chargeback of an administrative fee of $100. Packing slips are not to be given to truck drivers or attached to bills of lading. Drivers and trucking companies are not responsible for delivering packing slips. CATO suggests that a standard packing slip format be used by all vendors. A copy of the suggested format is shown on page 15. This form can be downloaded from the vendor web site, Penalties charged for packing slip violations will be charged back separately for each line on the Purchase Order. 14

15 PACKING SLIPS 15

16 PACKING Pack only merchandise for a single COMPLETE purchase order number (purchase order number and Carton ID number line number on the purchase order) in a carton. If a carton ID number (line number on the purchase order) is designated Ship Multi- Crossdock and only multiple carton ID numbers (line numbers on the purchase order) are listed in the Multi-Crossdock Information Box on the front of the purchase order, pack the referenced carton ID numbers (line number on the purchase order) in the same carton. If a carton ID number (line number on the purchase order) is designated Ship Multi- Crossdock and combinations of carton ID numbers (line numbers on the purchase order) are listed in the Multi-Crossdock Information Box on the front of the purchase order, pack each combination of carton ID numbers (line numbers on the purchase order) in a separate carton. Failure to comply with packing instructions indicated on the order will be subject to a chargeback of an administrative fee of $100. Hangers All merchandise on hangers must be flat packed. Do not use foam or pins on hangers. Bundle hanging merchandise assortments with string or rubber bands (not tape or wire) and alternate the way the merchandise is positioned. Packing Best Practices Packing requirements for both Cato & Versona Divisions are located in the CATO or Versona Packing Best Practices Guide ( www. catovendors.com => Logistics/Vendor Guide => Cato Packing Best Practices or Versona Packing Best Practices) Note: Additional tissue may be necessary to prevent imprinting. Do not over pack. Select a carton that fits the product. All void space between product and carton must be completely filled. Place tissue or cardboard between layers of merchandise if necessary to prevent crushing or shifting within the carton. Note: Additional tissue may be necessary to prevent imprinting. Place additional cardboard on top and bottom of carton contents before sealing carton to prevent cuts to merchandise when carton is opened. The merchandise should be packed 1/4 below the top of the carton and 1/8 from the sides of the carton. 16

17 PACKING Packing Best Practices Each vendor is responsible for quality of shipping. This includes utilizing high quality packing materials (cartons, tape and dunnage) to adequately protect the product. CATO strongly urges each shipper to utilize recyclable, ecologically safe materials in packaging their product. Additionally, we encourage all shippers to utilize the proper, but absolute minimal packing necessary to protect their product. Vendors that are identified as having poor packaging will be solely responsible for all damages, concealed shortages and claims. Reinforced paper strapping tape, cardboard inserts, proper dunnage and double wall cardboard boxes are some of the essential components to good packaging. Failure to utilize quality packaging will result in a chargeback of $30 per hour for a minimum of 3 hours for any concealed shortages and/or damaged merchandise. Replenishment Packaging Each PO line is a separate style/color/size/sku. Each Individual unit must be packed in a separate poly bag. o Use the same polybag specifications as e-commerce packing (see page 20). Folding should follow the e-commerce guidelines. Footwear purchased with a box should be packed with one SKU per carton. If the carton is not full, use dunnage or an empty box (clearly identified as empty) to fill. Jewelry or small fragile items should be individually poly bagged and packaged to prevent damage in transit. Replenishment Cartons Each PO line should be a single SKU (style/color/size) shipped in a master carton. All cartons within each PO line must contain the same unit quantity in each carton. (Odd carton may be used to complete the order, if necessary). Product should be packed (recommended) in a 24 x16 x12 RSC carton. Carton should be securely taped with tamper evident, reinforced packing tape (see page 24). Cartons should conform to the specifications (page 24) for burst test and edge crush test (ECT). Carton labels should conform to the label specifications (page 25). Preferably to the standardize label below: PO Dept 1034 Carton ID TOTAL QUANTITY 100 PCS XYZ Corporation 1 OF 1,000 SKU COLOR IDEAL BLACK SIZE M 17

18 PACKING Poly Bags Poly bag must be a minimum of 1.0 mil thick. Poly bag requirements for the Cato and Versona Divisions are located in the CATO or Versona Packing Best Practices Guides ( www. catovendors.com => Logistics/Vendor Guide => Cato Packing Best Practices or Versona Packing Best Practices) Poly bag must be heatsealed or taped. Poly bags must be used when packaging non-hanging, flat packed softgoods. Poly bags must be used when packaging hanging softgoods, poly bag per sku. The size in the neck labels of the merchandise must match the size on the plastic bags or side striping containing the merchandise (Denim Jeans) or the size on the hang tag (Hanging or Flat merchandise). To order poly bags from Poly-Pak Industries, use the Poly Bag Ordering Form located on the Cato Vendor web site, => Logistics/Vendor Guides => ecommerce=> Poly Bag Order Form For questions contact: Poly-Pak International Ltd. Unit 01, 25/F., Mega Trade Centre 1-6 Mei Wan Street Tsuen Wan, N.T. Hong Kong Phone: Contact: Ms. Monica Lee monica.lee@polypak.com.hk Contact: Ms. Candy Lee candy.lee@polypak.com.hk Contact: Ms. Karen Cheung karen.cheung@polypak.com.hk 18

19 ecommerce PACKING If the PO/line has been designated as *** ecommerce ***, the product must be packed ready for the customer. _ Poly bags for ecommerce may be purchased from any supplier as long as all poly bag requirements listed on page 20 are met. Preferred poly bag supplier is Poly-Pak Industries, which requires a minimum purchase quantity of 500. For questions contact: Poly-Pak International Ltd. Unit 01, 25/F., Mega Trade Centre 1-6 Mei Wan Street Tsuen Wan, N.T. Hong Kong Phone: Contact: Ms. Monica Lee monica.lee@polypak.com.hk Contact: Ms. Candy Lee candy.lee@polypak.com.hk Contact: Ms. Karen Cheung karen.cheung@polypak.com.hk 19

20 ecommerce PACKING Poly Bag Specifications _ Type Poly bag Zip lock bag for Jewelry Size 7x11 9x12 10x13 12x15 15x17 15x23 15x23 with 1.5 bottom gusset 5x8 7x11 Vendors must ensure the poly bag selected fits the merchandise. The merchandise should fit within the poly bag, no creases, no puckers and no sagging. When holding the poly bag by the two upper corners, the merchandise cannot sag more than ½ from the top of the bag. For Handbags and Shoes, follow existing packing requirements. Poly bag must be high clarity polyethylene (PE),BHT free,and with a minimum thickness of 1.0 mil. The poly bag must be sealed using a self sealing poly bag to ensure the product remains intact during shipping and handling. Poly bag warning must be placed in the lower, center third of the bag and read as follows: WARNING: To avoid danger of suffocation, keep this bag away from babies and children. Do not use in cribs, beds, carriages or playpens. This bag is not a toy Wording should conform to all United States consumer protection laws as it relates to warnings and other pre-printed information. 20

21 ecommerce PACKING ecommerce Barcode Sticker _ The ecommerce Barcode Sticker will be printed at the Cato Corporation and sent to the vendors with the price tickets for all PO/lines designated as *** ecommerce ***. The paperwork with the tickets will list the ecommerce color, which may be different than the color ordered. If the vendor does not receive the ecommerce Barcode Sticker or the color listed on the ecommerce Barcode Sticker does not match the paperwork, hottix@catocorp.com. 21

22 ecommerce PACKING _ Packing Requirements Each individual unit (style/color/size) must be packed in a separate poly bag No hangers should be used when packing. The maximum for any individual poly bag cannot exceed 15x23. A chipboard insert must be used for all merchandise that does not maintain proper shape in the poly bag. For poly bags, apply the ecommerce barcode sticker to the front, top right corner of the poly bag, making sure not to obstruct the price ticket or warning label. For shoe boxes, apply the ecommerce barcode sticker to the front, right corner of the shoe box making sure not to obstruct the size, style or color name. 22

23 ecommerce PACKING _ Packing Requirements Bundle all units of the same style/color/size together in an outer poly bag or inner pack. The warning label is not required for the outer poly bag. The barcode sticker must be visible. Multiple bundles of the same style/color/size can be placed in the same master carton if needed to fill the carton. The master carton cannot exceed 50 pounds and cartons must follow the Master Carton requirements listed in the Carton section of the Logistics Guide/ Terms and Conditions. Do not over pack. Select a carton that fits the product. All void space between product and carton must be completely filled. Place cardboard between layers of merchandise, if necessary, to prevent crushing or shifting within the carton. Place additional cardboard on top and bottom of carton contents before sealing carton to prevent cuts to merchandise when carton is opened. The merchandise should be packed 1/4 below the top of the carton and 1/8 from the sides of the carton. Each vendor is responsible for quality of shipping. This includes utilizing high quality packing materials (cartons, tape and dunnage) to adequately protect the product. CATO strongly urges each shipper to utilize recyclable, ecologically safe materials in packaging their product. Additionally, we encourage all shippers to utilize the proper, but absolute minimal packing necessary to protect their product. Vendors that are identified as having poor packaging will be solely responsible for all damages, concealed shortages and claims. Reinforced paper strapping tape, cardboard inserts, proper dunnage and double wall cardboard boxes are some of the essential components to good packaging. All cartons containing ecommerce merchandise must be marked with a round red sticker placed on the side near the carton id number. The size of the sticker must be

24 CARTONS Each carton must be securely taped with tamper evident, reinforced packing tape. Lead carton must be clearly marked as LEAD CARTON. Packing slip must be attached to LEAD CARTON. Cartons for the Versona division must be marked with a round yellow sticker in proportion with the carton size (1-3 ) and the sticker must be placed on the side near the carton id number. Physically separate, with a cardboard divider, Jewelry merchandise by purchase order line number if they are packed in a single carton. Carton Weight Maximum Carton weight not to exceed 50 lbs. Master Cartons Carton must meet burst test and edge crush test (ECT) minimums as indicated in Table 1 below. Staples, stitches and metal banding are not to be used unless required by International regulations. Table 1 Apparel & Accessories Weight of Box and Contents (lbs.) Sum of Outside Dimensions [Length(in) + Width(in) + Height(in)] Minimum Burst Test (lbs. per sq. in.) Minimum Edge Crush Test (ECT) (lbs. per in. width) > > > Home Décor and Collectibles Weight of Box and Contents (lbs.) Sum of Outside Dimensions [Length(in) + Width(in) + Height(in)] Minimum Burst Test (lbs. per sq. in.) Minimum Edge Crush Test (ECT) (lbs. per in. width)

25 CARTONS Carton Marking Each carton packed with merchandise for a single purchase order number and carton ID number (line number on the purchase order) must be clearly marked with: CATO s purchase order number. CATO s department number. Carton ID # (line number on the purchase order). Quantity, size, and color information about the carton s content. 1 of 3, 2 of 3, 3 of 3, etc. to indicate the number of cartons in the shipment. The shipper s name must be stenciled or affixed to the outside of each carton, case or package. Multi-Crossdock/Multi SKU Carton Marking Each Multi-Crossdock carton packed with multiple carton ID numbers (line numbers on the purchase order) must be clearly marked with: CATO s purchase order number. CATO s department number. The first carton ID number (line number on the purchase order) listed in each combination of carton ID numbers (line numbers on the purchase order) in the Multi-Crossdock Information Box on the front of the purchase order. All carton ID numbers (line number on the purchase order) included in the carton must be referenced on each purchase order s packing slip. 1 of 3, 2 of 3, 3 of 3, etc. to indicate the number of cartons in the shipment. The shipper s name must be stenciled or affixed to the outside of each carton, case or package. 25

26 BILL OF LADING CATO requires a separate Bill of Lading for each inbound shipment for the Cato, It s Fashion and Versona Divisions. This is a standard VIC s format modified to include CATO s information requirements. A copy of this standard format is shown on page 27. A Supplement to the Bill of Lading is shown on page 28 and may be used as an overflow page, if needed. These forms can be downloaded from the vendor web site, An example of a Bill of Lading for Multi Crossdock or Multi Sku orders is shown on page 30. Each carton ID number must be listed separately on the Bill of Lading. A chargeback of $ per document will be incurred for incorrect format. _ All shipments made on the same day must be on the same bill of lading. However, use separate bills of lading for the Cato Division, It s Fashion Division and Versona Division The bill of lading must clearly indicate all the following: Each purchase order number associated with the shipment. Each carton ID number (line number on the purchase order). The total number of cartons per carton ID number (line number on the purchase order). The total number of units for each carton ID number (line number on the purchase order). The department number associated with each indicated purchase order number. A chargeback of $ per purchase order line number will be incurred for incorrect Bill of Lading content. 26

27 BILL OF LADING _ 27

28 BILL OF LADING _ Supplement to the Bill of Lading Example 28

29 BILL OF LADING _ Multi Crossdock/Multi Sku Bill of Lading Purchase Order Example 29

30 BILL OF LADING _ Multi Crossdock/Multi Sku Bill of Lading Example 30

31 SPLIT SHIPMENTS Unless specifically indicated on the face of the purchase order, no backorders or split shipments will be accepted. If not specifically allowed for an order, backorders or split shipments must be shipped prepaid at the VENDOR s expense. Failure to comply will result in a chargeback of $100 plus freight expenses. Group code shipments within the ship window but on different bills of lading will be subject to a flat chargeback of $100 plus 2% of the cost value invoiced for each purchase order line item where group code is indicated. Group code shipments part within ship window and part delivered early or late will be subject to a flat charge of $100 plus 2% per day at the cost value invoice amount. These will be applied to each purchase order within the entire group including that which was shipped on time. The CATO Corporation reserves the right to return orders noted as part of a group that are not in compliance with group code requirements. 31

32 SHIPPING/RECEIPT DATES Do not ship merchandise before or after the "shipping window" on your purchase order. The ship date is the date that the merchandise is tendered to our consolidator/trucking company and/or the date that the trucking company picked up the freight from the vendor s dock (i.e. the F.O.B. point). It is not the in house date. Merchandise is considered shipped F.O.B. Cohen Distribution at th Street, North Bergen, NJ 07047; F.O.B. Origin for direct shipments. VENDOR must have WRITTEN permission from an authorized person at CATO to ship outside this window. Domestic Orders- The shipping window is the Do Not Ship Before / Cancel If Not Shipped By date on your purchase order. Letter of Credit Orders- The shipping window is the to and from Export Date on your purchase order. CATO reserves the right to return merchandise or cancel orders at the VENDOR S expense if the merchandise is not shipped in the specified period. If CATO elects to keep shipments which fail to comply with shipping instructions, a flat chargeback of $100 plus 2% of the cost value invoiced amount per day late/early for each purchase order line item will be deducted from remittance. 32

33 CROSSDOCK It is extremely beneficial to process Crossdock merchandise in the distribution center, which eliminates handling, expedites merchandise delivery to the stores and is the fastest method of processing. Merchandise must be preticketed. Merchandise must be packed 1 assortment per master carton unless multiple purchase orders and/or carton ID numbers are listed in the Multi-Crossdock Information Box on the front of the purchase order. No hangers are allowed, unless specified on the purchase order. No partial cartons are allowed. All cartons must be re-shippable by common carrier. Crossdock Minimum The minimum Crossdock carton size is 12 x9 x2. The minimum Crossdock carton weight is 1 lb. Crossdock Maximum The maximum Crossdock carton size is 31 x24 x24. (.787m x.609m x.051m) The maximum Crossdock carton weight is not to exceed 50lbs. Note Exception: Cartons less than 40 (length) x up to 22 (width) x more than 2 (height) are acceptable (1.016m x.559m x.051m). 33

34 MASTER BUNDLE Any purchase order line item with 50 cartons or more must be bundled. All Master bundles must be strapped (following the specifications below). Taping is not permitted. Master bundles are to contain one purchase order line item per bundle except multi-cross dock. Master bundles must be cross strapped with a minimum of two total straps (see diagram). Incorrect Master Bundle Correct Master Bundle Type of strapping must be Polypropylene or Polypropylene Blend, minimum width 7/16 [ 9mm] maximum width 1/2 [ 12mm]. Sealed joint must meet or exceed 50% joint efficiency. There is no restriction on the type of seal. Metal banding is not to be used unless required by International regulations. Bundles should be broken, and loose cartons stacked to the ceiling, to maximize cube of container or trailer. Master Bundle Maximum Master bundles weight not to exceed 50 lbs. Master bundle not to exceed 31 [0.787m](length) x 24 [0.609m](width) x 32 [0.813m] (height). Master Bundle Minimum Master bundle not smaller than 3 minimum size cartons bundled. Minimum carton size as defined is 12 x 9 x 2. 34

35 ASSORTMENT PACKS All merchandise will be ordered in assortment packs that will be shipped to the store. Merchandise must be packed and shipped in the assortment as ordered. Any odd packs that are shipped to the CATO will not be paid for, not returned and a $100 administrative chargeback will be deducted from your next payment. CATO may, in its sole discretion, dispose of odd packs including selling in its retail stores. Assortment packs must be properly separated within a carton with plastic bags and/or rubber bands. Do not ship loose in boxes with mixed sizes and colors. 35

36 DAMAGES Items that are declared damaged/defective and returned by our customers to our stores will be disposed of and the VENDOR will be charged the item s cost plus a fee to cover internal handling and administrative costs. 36

37 TICKETING INFORMATION Preticketing Price tickets are made in house by CATO Ticket Preparation Department. When the purchase order is approved, a copy is sent to Ticket Preparation. Ticket Preparation produces the computer generated price tickets within 14 business days from the order date listed on the purchase order. The tickets are shipped via FedEx ground, Federal Express, or Airborne Express. If you do not receive your tickets within 21 business days from the order date listed on the purchase order or you need information concerning your price tickets, the ticket hotline. DO NOT SHIP YOUR PURCHASE ORDER WITHOUT THE PRICE TICKETS ATTACHED. address Hottix@catocorp.com Failure to preticket a purchase order that requires preticketing will result in a chargeback. Reference the purchase order for more details. Instructions for ticket placement can be referenced on the logistics guide under Ticketing Instructions. Tickets shipped for all orders will be based on the order unit quantity plus an additional 15%. The vendor will be charged 1 per ticket for domestic tickets and 1.5 for foreign delivered. If pre-ticket is not listed on the purchase order, the vendor will be charged 1 per ticket. Replacement Tickets If the vendor requests replacement tickets and proof of delivery can be confirmed, a minimum chargeback of $90.00 will be incurred. Expedited Tickets If tickets are sent using priority, standard or second day and charges are refused for any reason, a chargeback of an administrative fee of $100 plus freight cost will be deducted from your next payment. 37

38 TICKETING INFORMATION Ticketing Violations If the order specifies merchandise to be ticketed by the VENDOR prior to shipment to CATO and there are ticketing violations which require CATO to ticket or reticket the merchandise, a chargeback of $30 per hour with a minimum of 3 hours will be applied to the VENDOR S next remittance or upon request you will pay CATO an amount to cover reticketing and administrative costs. Ensure 100% of the merchandise is marked with the CATO retail price tickets. All other retailers price tickets must be removed from the merchandise. Retail price tickets must not be covered by hang tag(s). If tickets are deemed to be counterfeit, not produced by CATO, the merchandise will be reticketed. A chargeback of $30 per hour with a minimum of 3 hours will be applied to the Vendor s next remittance or upon request you will pay to CATO an amount to cover reticketing and administrative costs. 38

39 DIRECT LETTER OF CREDIT LATE SHIPMENT PENALTIES Standard terms will include a late shipment penalty per day for all orders not shipped within CATO s specified time frame (shipment date determined by cargo receipt documentation). The vendor will not be responsible for prepaid air freight or fast vessel charges. CATO will take responsibility to ship delayed orders. Any late shipments outside of the latest ship date window, will accrue a penalty of 1/2% per day for the first 10 days late, 1% per day for any additional days late between 11 and 20 days and 2% per day for any additional days late after 20 days. For example: A 10 day late shipment would be charged a 5% fee. If it were 11 days late, the penalty charged would be 6% (10 days at 1/2% and 1 day at 1%). At CATO s discretion, any order over 20 days late is subject to cancellation. The following clause will be written into all CATO Direct LC s: If a late shipment occurs, invoices must show a credit of the penalty chargeback amount. In the case of documents where this is not reflected on the invoice, the transacting bank will deduct the specified percentage from documents presented to satisfy this requirement. 39

40 EXCESS SHIPMENT PENALTIES_ When vendors ship quantities in excess of the purchase order line item quantity, processing is delayed and additional costs are incurred. If the shipped quantity exceeds the purchase order line item quantity by 3% or more, vendors will be charged back 50% of the cost of units in excess of 3%. The chargeback for excess shipments will appear on the check remittance and is noted as Excess Shipment under the Invoice No. / Reference column. Compliance with these standardized deductions and terms will allow payments to be processed more efficiently and will provide for prompt and accurate payment. 40

41 CONDITIONS OF THE PURCHASE ORDER A. Orders placed are subject to all the terms and conditions located here on. B. It is understood that the CATO Corporation shall have the right to cancel an order in whole or in part based on the cancellation dates and privileges indicated on the order. C. The CATO Corporation must be notified promptly (within 5 days) after receipt of order by the VENDOR if the order --- including all terms and conditions indicated hereon - is not accepted. D. The CATO Corporation reserves the right to countermand and cancel an order without penalty in the case of fire, earthquake, or any other natural or man-made disaster affecting the CATO Corporation s premises. E. It is understood that the CATO Corporation shall have a reasonable time and opportunity to examine the merchandise when received by us, whether or not the CATO Corporation s agents have previously examined said merchandise, and, if it shall then be ascertained that the merchandise or any part thereof is not in conformity with this contract, is not represented or warranted by the VENDOR, is inferior in workmanship or quality, or is delivered in a damaged condition other than damaged in transit, the CATO Corporation shall have the right to rescind this contract and return to the VENDOR - at VENDOR S expense --- all or part of the merchandise delivered. The right to rescind given hereunder shall not be construed as a limitation on the right to rescind or other rights given by common law or statute. F. If the merchandise subject to a Purchase Order is refused or returned by the CATO Corporation: 1. VENDOR agrees to obliterate or remove any CATO Corporation main label and price tickets at a Cato designated facility before the merchandise is returned to the vendor at a cost of 25 per piece plus freight to third party and a $100 administrative fee to be deducted from open invoices. If the vendor chooses to destroy the merchandise instead, a disposal fee will be deducted from any open invoices. 2. If Cato cancels a PO due to the Vendor s failure to comply with PO terms or Cato cancels a PO due to its business needs and the vendor wishes to resell the merchandise, the VP of Fashion Design and Technical Services will require a letter from the vendor agreeing to remove or obliterate all Cato Trademark labels and price tickets before reselling. If vendor resells the merchandise without removing or obliterating all Cato Trademark labels and price tickets and the merchandise is found for sale in other retail outlets, Cato may impose penalties up to and including legal action. 41

42 CONDITIONS OF THE PURCHASE ORDER G. You, as the VENDOR, agree and CATO reserves the right to deduct from the VENDOR s next remittance or upon request to be paid a refund of the cost of the merchandise when such merchandise is returned by CATO customers and CATO deems that the merchandise when shipped by the VENDOR was damaged and-or defective. The amount deducted shall be cost invoice value amount + 15% to cover internal handling and administrative costs. Furthermore, if the merchandise has been distributed to any store and is determined to be defective by store associates upon receipt or is returned to the store after sale because of defect, you agree that CATO may dispose of the merchandise at any CATO location without returning the damaged and/ or defective merchandise to you. Cost to you as indicated in this paragraph will apply to merchandise disposed of at the store. H. The CATO Corporation reserves the right to chargeback the VENDOR or request and be paid a refund when post audit findings indicate that incorrect charges have been billed by the VENDOR and/or paid by the CATO Corporation. I. By acceptance of an order you, as the VENDOR agree to: 1. Deliver all merchandise in accordance with an order at the prices stated on an order or at lower prices and at any better terms and discounts prevailing at time of shipment. 2. Guarantee that all merchandise and or service ordered has been or will be advertised, price stamped, labeled, tagged, marked, manufactured, compounded or produced, invoiced and delivered to full compliance with all acts of Congress and Federal, State and Local government rules and regulations of any kind or nature and including, but not limited to: a. Federal Child Labor Laws b. Patent, Trademark, and Copyright Laws and Regulations prescribed by the United States Patent and Trademark and Copyright offices c. Federal and State Pure Foods laws d. Federal Food, Drug and Cosmetic Act e. Federal Trade Commission Act, as amended f. Textile Fiber Products Identification Act g. Wool products Labeling Act h. Flammable Fabrics Act i. Fur Products Labeling Act j. Care Labeling of Textile Wearing Apparel Trade Regulation Rule k. Hazardous Substances Labeling Act l. United States Customs Regulations m. Consumer Product Safety Improvement Act of 2008 n. Lacey Act 42

43 CONDITIONS OF THE PURCHASE ORDER In addition to the foregoing list, which is included for purposes of illustration only and not as a limitation, Cato requires, and Vendor shall, comply with, and when applicable certify compliance with, any and all laws, acts, rules and regulations issued by the United States Consumer Product Safety Commission or any of its successor agencies having jurisdiction over consumer safety. 3. Indemnify defend (including attorney fees) and hold the CATO Corporation and its employees harmless from and against all claims, damages and expense on account of: a. Any defect in merchandise shipped on an order and subsequently sold by the CATO Corporation. b. Any claim or allegation that the Cato Corporation's marketing, promotion, advertising, display, use, offer for sale, sale, importation, or other distribution of any merchandise covered by an order or other materials provided by VENDOR to the Cato Corporation infringes, violates, or misappropriates any patent, copyright, trade secret, trademark, service mark, trade dress and other intellectual property or proprietary rights of a third party. c. The CATO Corporation s reliance upon any guarantee, set forth in I.2. (A-N) above. 4. Warrant to the CATO Corporation that such merchandise is free from defects of workmanship and material and is fit for the normal use by the consumer. J. A onetime 10% discount at cost on all new store opening assortments will be deducted from your next available check. A listing of actual allocations and discounts will be generated and provided upon request with monthly accounts payable activity. K. The CATO RN number (37080) must be on all merchandise that contains CATO, Versona or It s Fashion private labels or packaging and has care instructions. If The CATO Corporation is printed as part as the approved packaging design, an RN number is not required. Failure to comply will result in a flat chargeback of $ plus 2% of the cost value of the purchase order. 43