Will SDDC Bring Back SIT Saturation Notices?

Earlier this week, we wrote about a policy changes under consideration that would aid peak season capacity, the suspension of the 70% rule. Another change that has been discussed is the possibility of SDDC issuing SIT saturation notices this summer, in order to allow TSPs to bill delivery out of SIT from actual storage location.

When the change was made to the 2011  tariffs that all mileage on deliveries out of SIT would be based on Block 18 of the GBL, one of the immediate concerns was the effect on warehouse space during the peak season. Prior to the change, if the TSP had to store the shipment at a warehouse far away from the final delivery address because of a lack of warehouse space, the agent would have to deliver the shipment out a long distance, but that agent would be able to collect the long delivery fee from the TSP. With the recent tariff change, an agent would not be able to collect for long delivery out of SIT, since the delivery out mileage is calculated from Block 18 of the GBL.This may cause agents to be less willing to handle the SIT shipment, further exacerbating the warehouse shortage situation.

While SIT saturation notices used to be fairly common during peak seasons, SDDC has stopped issuing them in recent years. It appears they are at least considering  how and when to decide to issue as saturation notice that would allow TSPs to bill for delivery from actual location, which would allow them to pass that revenue onto the agent performing the service. There are some concerns about the details of deciding how to determine whether an area is saturated or not. If they can reach a consensus on that issue, and convince the Services to go along with the policy change, then hopefully they will move forward to prevent further warehouse space shortages this summer.

Do you think SIT saturation notices will help alleviate some capacity issues this summer? If there are no SIT saturation notices issued, what effect do you think that will have on warehouse capacity? Please use the comments below to share your opinion.

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