Page 98 - 2018 Hotel Cost Estimating Guide

THE BENEFITS OF USING A LOGISTICS FIRM
TO MANAGE FREIGHT AND WAREHOUSING
by Darlene Henke, ISHC President of Audit Logistics
During the renovation of an existing hotel or the construction of a new hotel, one of the most critical stages is after the design has been set, orders placed, and the FF&E is made and ready to arrive. Whether the scope is a small public area, or all the guestrooms, FF&E is usually made by manufacturers all across the United States as well as Asia and other countries around the world. The coordination of the shipping from hundreds of FF&E vendors from all over, receiving and storage local to the hotel, and the delivery to final destination is critical to the schedule and budget.
Hiring a professional logistics company can be very beneficial to the project and the team. Below are some examples on why this can be the case.
Professional Freight Management
• Did you know in some states, the owner is not subject to tax if a 3rd party is utilized? This can be about a 7.5% savings on the total freight spend just by using a logistics company.
• In most cases, once FF&E is ready to ship and leaves the manufacturers’ dock, their order is final and final invoice is issued. When utilizing a logistics company, shipping is instead in the hands of someone that knows the schedule and is managing all the items arriving. When the vendor ships, most cases the determination is made by a dock worker, not familiar with the project other than their small piece.
• Using a logistics company provides one source of contact for all shipping questions. The alternative is to let the purchaser manage through the vendors, thus requiring them to call hundreds of vendors to find out if product shipped on time and when it will arrive.
• A logistics company will coordinate with the site directly, or the warehouse, so trucks are not just showing up unexpectedly. Most logistics companies will let the receiver know ahead of time what is coming so they can plan to receive the goods in a timely manner and not have backups or detention from too many items coming in at once.
• FF&E manufacturers mark up the cost of freight when they are requested to ship. Logistics companies are in the business of shipping, and will generally receive lower pricing from their national contacts than an FF&E manufacturer that only produces one type of product.
• Pricing and discounts with freight companies are based on the volume handled with them annually. Logistics companies have the volume where a manufacturer or owner directly may not.
• Any damages or shortages on the FF&E will result in claims that the logistics company manages and another single point of contact.
• Logistics firms (not all but some) will verify the safety rating with each carrier and route shipments so they are transported by carriers with “satisfactory” safety rating.
Professional Warehouse Management
• FF&E is in storage just miles from the site. In the event there is a project delay, goods are being stored by a professional facility, not sitting in dropped trailers on the property or unoccupied rooms at the hotel.
• FF&E is in a climate-controlled facility, not subject to humidity or extreme hot or cold. When exposed to these variances in temperatures, sometimes mold or condensation can occur, FF&E can have damage, and sometimes the warranty from the manufacturer may be void.
• General Contractor or their sub has the ability to order FF&E based on what is needed by room or floor. FF&E is delivered to the site on trailers loaded the way they want to receive the goods for easy installation. No late trucks due to weather, traffic, or cross country transit. Instead specific times and dates the GC can count on and plan staff accordingly. If the hotel has multiple floors, this can save on installation costs because they can install one room complete with the FF&E they need, not have the sub go back and forth into the room multiple times over the installation scope.
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• General Contractor or sub can request deliveries 7 days a
week, 24 hours a day.
• As shipments arrive to the warehouse, packages are inspected for visible damage. If discovered, boxes are open at the time of delivery. This prevents surprises at the end when final rooms are trying to be completed.
• All requests for deliveries and POD’s to the site are organized and available by the logistics company.
There are many other advantages to hiring a logistics company. In addition, owners want to make sure the logistics company they use is a good fit, has the depth, knowledge and experience needed to handle the project. If you would like more information on this topic please contact Darlene Henke, ISHC at dhenke@ auditlogistics.com.
About the Author
Ms. Henke and Audit Logistics are recognized leading experts in the hospitality sector. Her reputation is well deserved and based on integrity, hard work, and dedication. Ms. Henke’s ability to think outside the conventional dealer business model resulted in Audit Logistics being the only industry firm in existence to offer auditable freight and warehouse management to the hospitality sector.
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JN+A and HVS DESIGN | HOTEL COST ESTIMATING GUIDE 2018