Case Study:
Furniture Manufacturer

Although the client had not had much success in the past with securing discounts from FedEx, ShipRx was able to secure a significant decrease in the total fees paid to FedEx.

Client Profile

A Midwest custom cabinetry manufacturer, founded in 1982 and currently employing over 250 people.

The company distributes throughout the U.S. with about two-thirds of the shipments destined for commercial locations. Service selection is overwhelmingly ground and they had recently renegotiated UPS rates.

Business Category

Furniture Manufacturing

Business Location

Wisconsin

The Problem

Little Savings on Carrier Shipping Expenses

In this case, the client had already tried to optimize their contract and identify other non-rate cost improvements. Aside from their discounts, the client had trimmed most of the excess spend from their shipping costs. Packaging had been mostly optimized whereby the billed weight was aligned with scale weight, but rate reductions came up short of expectations despite numerous attempts to renegotiate with their primary carrier, UPS, which yielded improvements of merely 5% prior to hiring ShipRx.

Our Solution

Contract Negotiation & Parcel Audit

ShipRx convinced the client to open up the bidding process to both UPS and FedEx. Although carrier changes are uncommon, ShipRx was able to also convince the client to keep an open mind to this possibility or to at least consider a shift in the percentages tendered to the respective carriers to better leverage their volume. During the negotiation process, the client updated their order management system (OMS) to a “best way” system which factored in both transit time and cost in the routing decision.

Revised carrier bidding process
Consolidated carrier discounts
Improved carrier contract offer
Identified undiscounted surcharges

Client Results

In this instance, FedEx was more willing to aggressively pursue this volume and supplanted UPS as the primary carrier and increased their share to 75%.

Additionally, with ShipRx's help they were able to update their UPS contract so that they did not lose any of their prior discounts despite the substantial decrease being tendered to UPS. These combined efforts resulted in reduced shipping costs of $167,356 over the first 12 months of the new agreement being put into effect. This represented a 21.2% decrease on top of the 5% they had already negotiated. With ShipRx auditing their UPS and FedEx invoices, they were able to recover thousands of dollars annually in service refunds and invalid charges.

We improved the discounts on heavier weight breaks, secured market appropriate discounts on dimensional surcharges, and identified services that were previously undiscounted.

Most importantly, we facilitated a competitive contract negotiation that allowed each carrier to offer their best terms to our client. FedEx was willing to offer substantially discounted terms which ultimately were accepted and resulted in a decrease in total shipping costs in excess of 20%.

$477,007

Total Savings

31%

Cost Reduction

While each opportunity will have varying degrees of success depending on the conditions, ShipRx has a 100% success rate in securing savings on behalf of its clients.

As a result of ShipRx's expertise, shipping cost reductions totaled to more than 20% of the total shipping fees. This case study is a representation and reflection of ShipRx's technology, industry experience, and market expertise. These are not uncommon results for companies turning to ShipRx for assistance.

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30+ Years of Experience
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Case Study: Furniture Manufacturer