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Ingram: Local freight charge decision within a month

Ingram: Local freight charge decision within a month

Distributor admits it may have to follow overseas lead to stay competitive

Although there hasn't been a mandate from its US parent company, Ingram Micro's local boss has admitted the distributor is considering the introduction of freight and handling charges. Its Australian resellers are likely to be notified within the next month.

"We are looking at what we need to do to keep ourselves competitive with the least possible impact on our customers," managing director, Guy Freeland, said. "We'll make an announcement within a month if we are going to do anything - I think at some point we will have to."

Freeland's comments come after the distributor's US operations announced plans to introduce freight charges on orders below a minimum value as well as handling fees. Its European business introduced similar charges at the start of this month.

"Freight is our second largest cost, after people, and the problem is that the price of IT products has come down substantially in the last couple of years. This has been accentuated by the exchange rate. The costs of distribution are all based on local currency."

Freeland said Ingram was also talking to couriers and assessing its order processing in an attempt to reduce freight costs wherever possible.

Although it is the largest IT distributor in Australia, and globally, Freeland said Ingram's scale and business model made the company more susceptible to external market forces than its competitors.

"We have a full service model and have to invest in all sorts of areas for the benefit of the channel," he said. "When there's uplift in external costs, we see it more in the dollars and cents than any other distributor.

"We understand our position and believe we are a key part of the route to market. We need to make sure we can continue to invest in support and innovation but, without a shadow of a doubt, [other distributors] are feeling the same pressure."

Freeland joined Ingram Micro via its acquisition of Tech Pacific, which was forced to backtrack in 2001 after the introduction of handling fees for small orders drew reseller ire. Initially set at $1000 in April 2001, it was reduced to $250 within six months and eventually abandoned by new boss, Kerry Baillie, in January 2002 just a week after taking charge.

"It wasn't successful at the time but that doesn't mean it isn't the correct way to go today," Freeland said.


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