Resellers divided on Ingram’s freight price hike

Resellers divided on Ingram’s freight price hike

Resellers are divided on whether Ingram Micro’s decision to increase freight charges by 9 per cent and add a flat fee to drop shipments was justified. While some have criticised the distributor for the price hike, others are taking it in their stride and flagging bigger concerns around the volatile Australian dollar and product pricing.

In a letter sent to resellers last week, Ingram Micro managing director, Guy Freeland, said its general freight rates would increase by 9 per cent effective November 1. He pointed out the company had been absorbing rising freight costs and fuel surcharges from its transport providers since last year, but opted not to pass on those increases until at least after September 1.

Ingram will also introduce a $5 fee on all drop shipped orders from next month. The changes come two months after the introduction of handling fees and freight price rises on minimum orders by Ingram in the US and Europe.

Freeland told ARN the decision to raise freight charges was not taken lightly and said the approach adopted in the US and Europe had been more aggressive. The new charges will be included automatically as part of a reseller’s total freight cost, rather than a separate line item.

“We have tried to be sensitive to the concerns of our customers about cost increases, while being honest that we think that it is fair for us to seek some recovery,” he said. “The way we’ve implemented this, it doesn’t matter if you’re the largest or smallest customer, all freight will be increased.”

City Software managing director, Lorenzo Coppa, said it had scaled back its number of drop shipments from Ingram in favour of stocking goods in its own warehouse. At one stage, the Victoria-based retailer was making several thousand drop shipments per month.

“Our freight costs are cheaper than what Ingram is asking us to pay,” he said. “When you have thousands of drop shipments that $5 fee adds up, so we’re freighting more out of our Melbourne distribution centre – that offers us better control over goods anyway.”

The increased costs of drop shipments could wind up crushing smaller e-tailers who had no physical resources and relied on Ingram for all stock supplies, Coppa said.

Another reseller, who asked not to be named, saw the freight rise as exorbitant and suggested Ingram should wear most freight costs as part of its overall services offering to resellers.

But for managing director of Sydney-based reseller Triforce, Abbas Aly, Ingram’s increase was inevitable. He added freight costs were an issue everyone had to deal with. Triforce is passing on some of the extra freight cost to customers but absorbing the rest.

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