When it comes to fielding offers for much-needed PPE supplies, organizations need to consider where they will store the goods.

Pima County, AZ recently had to acquire a 43,500-square-foot warehouse downtown for $3.4 million noting that the Health Department had to add staff and even enlist the help of the National Guard to help transport 1,200 pallets of personal protective equipment. And that is only 1,200 pallets. Many of the on the ground lots being offered are for 500 million boxes of nitrile gloves or 1 trillion masks. Simply put, that’s a logistics nightmare.

When pricing PPE, look carefully at the Shipping Terms. Understanding where the risk transfers from the Seller/Manufacturer to your organization is critical in not only mitigating risk but the cost of the goods as well.

We recently started pricing out an FOB lot our client wanted to purchase for 100 million boxes of nitrile gloves with Qoterie (our preferred logistics vendor). So far the shipping alone came out to over $84 million dollars and that’s with over 1 million boxes by air! How it breaks down, as of now, for 100,008,000 boxes of Nitrile Gloves, 100 pieces per box*:

40 Ft Container $3,770.00
747 Jet Aircraft $1,500,000
Truck Fee /QTY (24 pallets per truck) $750.00
Truck Handling Into Storage/QTY $180.00
Storage 1 Pallet PER month/QTY $45.00
Track Handling Out of Storage $180.00
Boxes per Pallet 1,053
Pallets Per 747 Jet Aircraft 325
Cost per Pallet on 747 Jet Aircraft $4,615.38
Cost Per Box on 747 Jet Aircraft $4.50
Boxes Per Container 33000
Cost per Box on Ship $0.11
1 Month of Storage Per Box $0.04
Ground Transport Per Box $0.04
Total Boxes on 747 Jet Aircraft
Total Boxes Transported 100,008,000
 Boxes Per Truck 33,000
 Total Cost Per Truck $1,155.00
Total 747 Jet Aircraft 50
Total 40 Foot Containers 2,526
Total Trucks 2,526
Total Pallet Storage 0
Total Truck Handling In 0
Total Truck Handling Out 0
Total Pallets 94,967
Total Boxes Per Continer 33,000
Total Boxes Per Pallet 1,053
Total Pallets Per Container 14
747 Pallet Capacity 325
Total 747 Box Capacity 342,225
Total Boxes Air + Sea 100,008,000
 Total Shipping Cost Per Box $0.86
Total Cost $86,417,520.00

 

One key factor with FOB is that YOU own the stock when it is loaded on the ship. One of the worst incidences of fraud is when you have paid for the product, ordered it CIF to the USA, and along the way, someone makes the seller a better offer. All of a sudden your goods are diverted and you are out of luck. Sure, you get your money back, or they replace the goods later, much later, but you’ve now wasted time. By buying FOB you get the best pricing, even when adding in having to ship it yourself. But you own it, with a login so you can see where your PPE is every step of the way.

 

*Numbers are approximate and used for demonstration purposes only. Shipping costs vary weekly and are priced by weight. Some boxes weigh more than others, some hold 200 count gloves, some 300. For an accurate estimate, please contact us.