Finding New Ways to Do Business in a High-fuel-cost Economy

An Aug. 3 story in The New York Times (“Shipping Costs Start to Crimp Globalization”) spotlights several companies that are changing the way they do business in order to address rising fuel costs.

Gifts In Kind International is specialized in efficiently placing quality product donations with community charities around the world. Shipping and transportation costs have an important impact on our mission. In fact, the changes that our donor companies are making to help address fuel costs are now affecting the quantity and variety of products that we make available to charities. 

Local Donation Programs Help Cut Fuel Costs

Rising fuel costs will continue to shape our global economy in the years to come. Because of our role as an international charity that coordinates the distribution of products globally, Gifts In Kind must also anticipate and be prepared to adapt to these changes.

Beyond that, our organization is offering corporate donors new ways to cut costs and optimize their supply chain management. When a retailer donates products through our Retail Donation Partner Program, they donate products directly from their retail stores to the local community, reducing reverse logistics expenses.

This means they spend less on both fuel costs for shipping inventory back to the distribution center and the related employee costs to continue dealing with these excess products. Today, Gifts In Kind manages approximately 7,000 retail locations in North America.

This not only empowers community charities to do more for people in need, it helps our corporate partners cut costs and reduce their corporate carbon footprint.
 

Finding Innovative Solutions for Donors and Charities

We have boosted our worldwide logistics capabilities, allowing companies to donate at manufacturing points around the world. As high fuel costs alter the global marketplace, this ability allows companies to optimize their supply chains by having Gifts In Kind pick up product donations at manufacturing sites around the world and donating them to local charitable organizations.

Gifts In Kind is working to find new and innovative ways to address rising fuel costs in order to continue offering low shipping fees to our member charities. Last year we worked smarter by adding additional 3PL warehouse locations to shorten the distance for shipping products and to keep our cost-per-mile below the industry average. A new integrated logistics management and inventory control system also allows us to manage additional warehouses more efficiently.

With all said…the increased cost of shipping and the shrinking economy will impact Gifts In Kind’s ability to continue providing exceptional value to both donors and charities. Since charitable organizations cannot bear the entire burden of increased shipping costs, we continue to search for innovative ways to do business. Because our corporate donors save a great deal from the services provided by Gifts In Kind, many are helping to subsidize the shipping costs in order to further enhance the impact they are having in the community.

As we continue to pursue innovative solutions for our own organization, I would like to hear comments and new ideas or suggestions from both companies and charities on this developing trend and concern.