Tech Data Adds $2 Order Handling Fee

The distributor will add a $2 fee on all orders, excluding orders for software licenses, warranties and services. The new fee is in addition to the existing handling policy. It will take effect Oct. 1, 2008, according to a letter sent to solution providers from Murray Wright, senior vice president of U.S. sales.

"Tech Data carefully evaluated many options when determining how best to address the added costs of doing business," Murray wrote in the letter. "Today's adjustment to our freight policy will help ensure that we are able to continue delivering the outstanding service and support you expect from us every day."

The Clearwater, Fla.-based distributor said the minimum order size to receive free ground shippingand#8212;$2,400 for telephone orders and $1,000 for electronic ordersand#8212;will remain unchanged.

Rising transportation costs is a macroeconomic issue that has caught up with the IT distribution industry, said Bob Dutkowsky, CEO of Tech Data.

"I flew on a plane the other day and the airline charged me $40 to put a bag on the plane. With fuel costs where they are, it's become too much of a cost of the business for the IT distributor to shoulder that whole burden on their own," Dutkowsky said.

One potential side benefit of a handling fee is to get solution providers to combine smaller, multiple orders into one larger order that is more efficient for Tech Data to process, Dutkowsky said.

"We become more efficient and the customer can avoid multiple $2 handling fees. It's a win for us and a win for the solution provider," he said.

Earlier this month, Ingram Micro said it intended to add a $2 handling fee for all invoice orders for physical goods, effective Sept. 2, 2008. In addition, the Santa Ana, Calif.-based distributor plans to increase its free-freight thresholds by $200 and $600 for Web order and non-e-commerce orders, to $1,000 and $2,800, respectively.

DandH Distributing, Harrisburg, Pa., recently switched primary carriers to FedEx Ground from UPS Ground, as a means to reduce its own costs and has not increasedand#8212;yetand#8212;its free shipping minimums.

DandH earlier this month added a surcharge effective Aug. 11, 2008, for customers wanting to keep UPS. The surcharge will be between $.60 and $1, depending on the order, according to the company.

Arrow Electronics also is evaluating its response to the rising cost of freight, said Andy Bryant, global president of Enterprise Computing Solutions.

"It is a fact that freight costs are rising faster than sales. I'm sure that's true no matter what industry you're in. We don't stock as much in warehouses, so we don't do as many small package shipments. We do some very special type shipping, particularly in the storage space, where it has to be a protective ride. That is quite expensive. We're evaluating our position but as of yet haven't changed our policy."

As of earlier this month, Synnex also had not finalized any freight changes, said Bob Stegner, senior vice president of marketing for North America at the Fremont, Calif.-based distributor.