25.8% cut from outbound parcel for a health and beauty brand

Carrier Sourcing & RFP Parcel Consumer & retail brands
Carriers:
USPS DHL eCommerce Amazon
3ac65ed58c892fe334d9567be880f7f3aa3ba1a5

WHO

Business model

A growing beauty and wellness brand that outsources fulfillment to a third party provider. The 3PL also handled outbound transportation to the end customer, and was supposed to be managing cost through rate shopping.

Industry

Health, beauty and wellness, sold direct to consumer.

PROBLEM

What they felt

They knew there was an opportunity to improve outbound transportation cost, but felt stuck, because the 3PL tied warehouse fulfillment to transportation when it quoted rates. An upcoming renewal gave them the chance to challenge that, and they needed support positioning the negotiation so the supply chain stayed protected while the savings landed.

What we found

Not all managed transportation providers are the same, nor do all perform equally in all lanes and geographies. This one preferred to maintain current relationships over pushing for new, improved providers. Our benchmarking found:

WHAT WE DID

Prep and analysis

We identified which carriers fit the client's shipping profile and built toward coverage, reliability and flexibility. We analyzed over 150,000 shipments and 250,000 line-item data points to match the customer footprint to the right last mile providers, eliminating unnecessary surcharges and capping fuel surcharge exposure. We also prepared the client for the conversations with the 3PL, so the fulfillment and order processing relationship was not put at risk.

Execution and coaching

We role-played the scenarios with the client and prepared them for the objection handling needed to bring the 3PL along. We negotiated directly with the new transportation provider to fit the right packages into their network at aggressive cost, leaving the remainder with the national provider that specializes in heavier packages and expedited service.

We kept it clean afterwards

Trans-Solutions runs a monthly audit of packages to make sure the carriers are getting the right volumes and the client is not paying for 3PL non-compliance. We built a spend dashboard at the client's request, to track compliance and surface further opportunity.

RESULTS

What they got

25.8% cut from outbound parcel, high six figures a year

Outbound parcel cost fell 25.8%, high six figures in annual savings, and the relationship with the 3PL was maintained. A new parcel carrier increased the competitiveness of all pricing, with the right providers matched to the right freight profiles. The per package charge was minimized without taking fulfillment out to bid, and accessorial exposure was addressed to give cost certainty that matches what end customers expect.

Further negotiation is possible, but the focus now is holding the current landscape without cost leaking to the wrong carriers.

How long it took

Roughly four months, through peak season, the toughest negotiating period of the year, with implementation in early January.

How we were paid

Gainshare, with a total compensation cap.

How much are you leaving on the table?

Get an instant calculation of your savings potential. Based on the database of carrier contracts we have audited and negotiated for 600+ clients since 1997, and on current benchmark data showing what companies with your profile pay today.

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