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Technology Stocks : Dell Technologies Inc.

DELL 133.93

-4.9%

3:59 PM EST

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To: Bill who wrote (116714)	4/12/1999 3:26:00 PM
From: Lizzie Tudor	of 176387

Bill, Admittedly I have been out of the loop for a while as to what Dell is actually doing at this point, but I suspect the reason you got one box from UPS and the other from Fedex is either 1) the CPU division negotiated with Fedex for everything and the monitor group did a UPS-only deal (which is just another take on the single supplier problem since Dell is big enough so each div. can negotiate on their own) or 2) the UPS product was shipped separately as a part of an RMA or something - an individual case kind of thing, warranty etc. The last exposure I had to this shipping problem was actually at Power Computing where shipping was routinely a top 10 bom item. We negotiated with Airborne for some decent rates. They wheeled in their barcode machine and we tweaked our ERP systems to work with them. 2 mos into the arrangement, Airborne raised rates for Power and there was nothing we could do - it was too much work to retool. The execs at Power which all came from other boxmakers including Dell and GTW were at their wits end with these shippers. GTW apparently was using one of the shipping bundle and ship deals (where the shipper provides warehouse and bundling services) and apparently once you give part of your biz to fedex this way it is tough to get it back, acct issues etc. As far as I know, nobody is doing what they should be with the shipping costs, which is 1) weight the item, and do a "best cost" evaluation as to which way is cheapest - including US mail which is preferable to everything for in-state shipments. Its going to take a pretty powerful retailer to get shippers to sign up for this because its harder for them to manage. As far as investing in shippers some analysts (I think at Merrill for one) have said FDX is the ultimiate e-commerce play. I agree their business is exploding but again the pricing model is unacceptable so gross margins have to come down. Michelle PS I love talking about ERP logistics!

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