Anchor Group Podcast: Episode 11
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- Caleb Schmitz, CRO at Anchor Group
- Anchor Group (Company Page)
- Ray Roberts, Headless Commerce Expert
- ShipHawk (Company Page)
Anchor Group Podcast Ep. 11 Transcript
Caleb (00:00)
On this episode, I'm going to be interviewing Ray to talk a little bit more about how ShipHawk is identifying areas to improve and create optimizations and automations regarding tariff-related supply chain issues that may happen around the ports. We'll also discuss stress testing and other enlightening topics, as well as how to potentially increase profit and reduce shipping costs.
We'll cover how to get more value from your customers—and maybe even pocket a little more profit margin. I think you're going to really like this episode.
Ray, I think there have been some interesting developments in the ecosystem with tariffs. I want to think through some of this a bit more and hear your thoughts—see what you're seeing on the ShipHawk side and in the shipping space. I just want to pick your brain a little more about tariffs in general, what you're seeing, and how they're impacting the ecosystem.
Ray (00:54)
Absolutely. Thanks for that opening question.
When it comes to tariffs, everyone's talking about them—and we've always had tariffs, of course. Having spent 10 years specifically in imports and exports, I know all about them. I had to apply for them on numerous shipments.
What's unique about our situation today is what’s happening after the tariffs: labor market shifts, logistics market shifts, and specifically robotics and AI. I think we're entering what I would call the robotic age in logistics.
Caleb (01:36)
Interesting. It's funny you say that—quick tangent, I just had a robotic lawnmower delivered today that I'm about to set up. So I can totally see that myself, even from a practical standpoint.
My background is in engineering and I loved robotics. I thought it was so fun. I see it expanding not just in manufacturing and consumer products, but into logistics as well.
Can you tell me what you mean by robotics and automation specifically in logistics? I understand robotics in manufacturing and in the home—but what does it mean in the logistics world?
Ray (02:21)
Yeah, that’s a great question.
At ShipHawk, the dominating part of our conversations these days is around asset control. The question always comes up around WMS systems and installations: how do you integrate with robotics?
There are two different types. One is the kind of warehouse we’re hearing more about now—dark warehousing. Just in case folks aren’t familiar with the term, a dark warehouse is fully automated. It operates with little or no human involvement and relies on robotics, automation, and smart technology to handle all warehouse operations: receiving, storing, ordering, processing, picking, shipping—everything is done robotically.
Then you have human-augmented operations—we call them gray warehouses. They’re not fully dark, but they’re also not fully analog. Humans, in this scenario, are the analog.
In this case, you’re augmenting the person. I’ve seen systems where a person goes to a station, and the warehouse comes to them. What I mean by that is, the shelves themselves move and come to the person. A light shows up, they grab their item, and place it on another cart, which then scurries off to the shipping area—either to another person or into a fully automated system.
There are so many unique things happening, and really, Amazon is the linchpin here. They have something called the Industrial Innovation Fund. I’m not sure if you're familiar with it, but Amazon invests a billion dollars a year into AI and robotics.
Caleb (04:03)
That's really interesting. That gray area sounds like more of a partial implementation of automation, and that seems like the most natural next step from a change management perspective.
People may not have full confidence in fully automated AI and robotics yet. Plus, the technology is still evolving and not quite ready for complete reliance.
Would you say that blending the two worlds—human and robotic—is the next logical step?
Ray (04:36)
I would fully agree with that. That’s really what ShipHawk is enabling companies to do.
It’s a stepping stone. You might have a basic WMS that does what it needs to—tracks inventory, works fine—but it’s not robotics-enabled. It’s not built in a way that allows you to scale automation.
Decision-making logic—if this, then that—is something a lot of companies are calling AI. But it’s not truly AI because there’s no machine learning involved.
However, at ShipHawk, we do have teach modes in certain systems. I wouldn’t call it a full AI model, but it does allow you to achieve much more automation within the ShipHawk tools—WMS, TMS. We’re having a lot of conversations right now about freight audits and cycle counting to streamline and automate those tasks. It really frees up a lot of time.
Caleb (05:35)
So when you're talking about robotics and automation, you're not necessarily talking about physical robots moving around the warehouse. You're referring more to the logic—how you handle receiving or shipping product, right?
Can you give some examples?
Ray (05:57)
Yeah, for sure.
A common example: a container shows up—it’s a mixed pallet with mixed purchase orders. You've brought in a bunch of different POs for all kinds of products.
Today, people have to manually sort through that, compare it with the sheet, and check what they’ve received. But with ShipHawk, our system is smart enough to know what’s on the ASN. You just scan everything, confirm it, and our system processes it, breaks everything out into the right POs, and sends that info back.
That process, which I just explained in five seconds, takes hours for companies to do today. With ShipHawk, it’s automated and only takes as long as it does to receive the goods—maybe 30 minutes.
Caleb (06:58)
Very interesting.
So when you're receiving freight—like that container—you’re often paying by the hour just to have it sit there. You’ve got to unload it, move it quickly, and log the data.
But it’s not just about unloading—it’s also about putting the products in the correct places in the warehouse. Otherwise, you're touching the same item twice. You need to log it as received and link it to the correct purchase order.
With multiple POs, you’ve got to mark which items and quantities belong to which order. If you’ve got 50 POs in one container, the system has to split those out and reconcile the receipts. Can ShipHawk handle that?
Ray (07:57)
Yep. Based on user input, our system will automatically do that—so you don’t have to touch the same item twice.
And think about the administrative side: you're touching it two or three times on paper or in the system. We want to eliminate that.
It’s like a toddler in a museum—you don’t want them touching the glass things, especially not twice. Something could break. So we aim to eliminate those extra decisions within the software.
Caleb (08:27)
Interesting. So that’s on the WMS side—receiving. But what about shipping?
I’m curious about the opportunities for automation there, and maybe where money is falling through the cracks in a lot of operations.
Because if you’re getting hit with tariffs, you need to offset that—either by raising prices or cutting costs elsewhere.
Your costs in other areas with automation so that your overall business operations cost is reduced—and you can keep prices lower. So what other areas exist to automate on the shipping side to keep operational costs down or to generate more revenue?
Ray (09:18)
Yeah, that’s a great question.
One of the things we learned early on in business is the supply and demand model. If you look at the current import supply coming into the country, it’s significantly reduced. So companies want to do a number of things with the assets they already have. One of those is controlling them better, because those assets are about to skyrocket in value. There's going to be a lot of demand but not a lot of product.
The incoming goods are being rerouted to other countries. For example, iPhones are still shipping—but not to U.S. ports. It's something like 140% more expensive to ship from China to the U.S. than it used to be, but only 25% to import the same product from Canada or Mexico. So in effect, we’re shipping our port jobs to other countries because of these tariffs, and that’s increasing the price of the goods we currently have on hand.
Two of the major conversations ShipHawk is having today center around asset control—cycle counting in the warehouse and, on the shipping side, making sure the right products are going to the right people. We don’t want mistakes at that stage.
Companies used to be okay with a 3–4% mis-ship rate. Now they want that number way down. At ShipHawk, we're bringing that below 1%. That’s now the acceptable range for today’s market. What was once exceptional performance is now the standard.
That’s how tariffs are shaping and changing the market, and it's where automation and system configurations are really proving their value.
Caleb (11:10)
You mentioned supply and demand a second ago, and I just connected the dots—you’re saying that instead of shipping directly from China to a U.S. port, companies are now routing shipments through Canada, which increases the total time it takes for product to arrive at the warehouse.
So the inventory you already have becomes more valuable because it's harder to replenish. Is that what you’re referring to?
Ray (11:38)
Exactly—much higher demand.
And the ability to replenish? Those models just don’t exist anymore. Previously, if you were shipping to West Coast ports—Seattle, Long Beach, L.A.—and something slowed or shut down due to a port strike, you could just reroute to Houston, Miami, or Washington.
But not now—because tariffs affect the entire U.S. It's still around 140% to import from China into the U.S. Unless that’s changed since this morning.
That same product can be shipped to Vancouver and brought across the border. Not much farther than Seattle—and it’s only a 25% tariff.
But we’re now bringing goods through channels that haven’t been stress-tested to this degree. If everyone that was using L.A. and Seattle starts using Vancouver, or even Tacoma, those ports and border crossings are going to be overwhelmed. There will be delays. There will be a supply and demand issue. It’s just a matter of time.
Caleb (12:55)
That really connects the dots for me.
The supply chains will get stressed. These newer ports haven’t handled that kind of volume before. And if you’ve got more volume than they can process, it’s going to create a bottleneck. You won’t be able to push product through fast enough.
That makes your existing inventory more valuable, because you can’t replenish it quickly. And we’re heading into a season when companies start placing purchase orders for Christmas. Depending on the manufacturing lead time, there can be serious delays.
So now you're planning your current inventory, your current demand, and trying to forecast the future—deciding whether you should even switch manufacturers to avoid issues. There’s a lot going on.
On the WMS side, what type of value does cycle counting provide in that situation? If we know our warehouse inventory is going to be in high demand, what does cycle counting do to help?
Ray (14:12)
It’s exactly what you just said.
If I have goods in my warehouse, and I don't know when or if I’ll be able to replenish them, I need to make sure I’ve got tight control. I want to know exact quantities, exact locations.
That way I don't have to worry so much about the next shipment—whether it takes three or four extra weeks to arrive. I’ll already know what I have, and I can trust it.
And when I have that trust, I can deliver a reliable customer experience. That’s critical in uncertain times. We don’t want customers to lose faith in our ability to deliver on time. Because today, they can go buy the same product elsewhere—maybe even cheaper—on TikTok Shop or wherever.
So that customer relationship is extremely important. We're helping our customers maintain strong relationships by giving them confidence in their inventory and their ability to deliver.
Caleb (15:20)
So cycle counting helps ensure you’ve got enough product for this increased demand, especially when the supply chain is unstable.
From there, you can do demand planning and figure out the delta you’ll need to cover. A unique factor in this planning is how fast the markets are shifting.
If you can react faster than your competitors—because their supply chains are off—you might pick up their customers. They’ll come to you to see if you have availability.
So I can definitely see how ordering more product now—while supply is still moving—could give you an edge when the system backs up.
Here’s the polished version of your latest segment:
Ray (16:16)
Yeah, over-ordering is going to be a critical piece of success—especially for companies with sustainable products. You know your customers are going to keep buying, like with golf or sporting goods. People are going to continue doing those activities.
But for other categories—things more ancillary—it can be tricky. Take the biking industry during COVID, for example. If you followed it, you know the industry saw a huge boom. POs skyrocketed, but there was no inventory to meet the demand.
Companies were taking pre-orders and placing large inventory orders, but because it took so long for product to arrive, cancellations exploded months later. That $1,000 bike you ordered six months ago? Suddenly it didn’t feel so important anymore.
So these companies saw a massive wave of cancellations—but they’d already purchased the inventory. A lot of major biking companies went upside down and eventually closed their doors.
Depending on your product line, this kind of situation could be a huge opportunity—or a major challenge to predict. That’s why cycle counting is so important. That’s why getting inventory out the door accurately and on time is important. Auditing your bills is important. Having an ERP is important.
Caleb (17:29)
What about making sure you're increasing profit margins from your shipping rates?
I want to circle back to that for a second. If I ship something—let’s say a customer selects two-day shipping, but it ends up being delivered in five days—walk me through that process.
Does the shipping provider have to cover the difference since they didn’t fulfill their end of the agreement? What happens in that scenario?
Ray (18:07)
What usually happens is—you don’t even realize it happened. You paid for two-day shipping, but you didn’t get it. The customer probably hasn’t said anything, because by the time they do, they’ve already received the product.
So you’ve paid full price—for half a pizza, right?
With ShipHawk, we have a freight audit tool that captures these errors. There’s only a small window in which to submit a claim, and these delays happen far more often than people realize.
We ensure you automatically recover those costs in a timely manner, which is critical—especially with rising costs. Reinvesting money you’ve already spent is incredibly valuable.
ShipHawk’s freight audit tool automates recovery. We provide a dashboard that highlights all the errant shipments. It’s built into your SLAs: what did we buy, what was the carrier supposed to deliver, what were the contracted terms?
But most of the time, people don’t catch it—because they’re doing it manually, if at all. And unfortunately, most folks don’t do it at all.
Caleb (19:19)
So that’s one area for recovering extra money and adding revenue back into your business to offset costs.
What about shopping shipping rates—what opportunities exist there?
Ray (19:36)
This is where customer experience really comes into play.
Some sites can’t handle bulk shipments or LTL and push that rate into their website, so the customer doesn’t see it—what the shipment is, the SLA, any of that.
Then there’s the more familiar experience—like ordering AirPods and seeing free shipping. That’s fine too.
ShipHawk uses a system of rules. There are two types: rating rules and shipment policies.
Rating rules answer: what do I want to charge? What’s it going to cost them? Do I want to add a markup for a particular region because I know it’s logistically challenging?
You take the knowledge you already have about your shipping lanes and bake that into the system. That way, you can deliver a consistent, accurate customer experience every time.
That’s where the automation—or what people call AI—comes in. It’s not really AI; it’s more like “if this, then that” logic. Business rules.
Caleb (20:40)
So how could someone actually make more profit by using these shipping methods and rules?
Beyond improving customer experience, how does this translate into profit on a specific sale?
Ray (21:01)
Great question.
The most common way is a flat markup—say, a 2% increase across every shipment. That’s what the customer pays.
Another approach is region-specific rules. If a shipment’s going to a tough location, you might add a handling fee. You can set rules for percent-based markups or flat dollar amounts—whatever fits your model.
Here’s the cleaned-up and formatted version of this final segment:
Caleb (21:30)
What about carrier shopping?
I have some SuiteCommerce and BigCommerce customers that use ShipHawk, and when I was working on other extensions and functionality, I played around with the ShipHawk features too.
One thing I found interesting was being able to offer shipping methods like “two-day” or “one-day” without being too specific about the carrier.
From what I saw, on the backend—inside NetSuite or the ERP—it could then be decided which carrier is cheapest, and the merchant could pocket the difference. Is that something you see, in addition to the general 2% markup? What about shopping around and capturing that difference?
Ray (22:19)
Yeah, that’s called masked carrier rates. Most folks refer to it as “good, better, best.”
In the background, that lets you pick whichever carrier is cheapest, usually based on the number of days.
So the customer might pay $15, but it could cost you only $5 to ship. They don’t know what carrier it’s going to be—they just chose “good.”
Caleb (22:44)
Got it. So they chose two-day shipping, and you’ve got three carrier options.
The person shipping the product can pocket that $10 difference—and increase their margin, on top of that 2% markup.
Then if it doesn’t get delivered in two days and ends up taking five, you can go back to the freight audit to capture the value of that missed commitment.
So you're really capturing value in three different areas when it comes to shipping.
Ray (23:24)
Exactly right. Exactly right.
Caleb (23:26)
I’ve never really broken it down this way, and it’s pretty interesting.
We talked about the WMS side—how you can manage incoming containers, respond to supply and demand, and navigate the impacts of tariffs and stress on the supply chain. That’s why it’s so important to have a strong WMS system in your NetSuite environment and ERP ecosystem—to support the right demand plan and order the right quantities.
Then on the shipping side, there are three areas of value:
One, you can apply rules to mark up shipping by 2%.
Two, you can shop carriers and pocket the difference.
And three, if a shipment fails to meet delivery promises, the freight audit helps you recover that cost.
There are so many ways to save—on both the receiving side with warehouse management, and on the shipping side.
Did I summarize that okay?
Ray (24:31)
Yeah, exactly right. That’s the whole purpose.
Caleb (24:51)
It was really enlightening to explore some of these areas I hadn’t thought about before. Thanks for going through all of it.
Ray (24:58)
Absolutely.
Caleb (24:59)
If anyone wants to find out more about ShipHawk, they can reach out to Ray or ShipHawk directly. Learn more about the solutions, and see if it makes sense.
Ultimately, it comes down to ROI—can you justify it? And a lot of times, the answer is yes. I’ve had many successful customers who’ve really liked the solution.
Thanks, Ray—appreciate it.
Ray (25:22)
Thanks, guys.
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