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.
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 save on costs. Aside from their discounts, the client had trimmed most of the excess spend from their shipping costs. Cube density was mostly optimized and other common issues were addressed.
3k
Cost Savings from New UPS Contract
5%
Difference in Price
from Existing Discounts
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 hidden 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.
25%
Previous Share of
UPS Business
75%
FedEx Share After
Consolidation
Total Cost Reduction
Saving
FedEx Fees
Savings from ShipRX Services (12 Months)
$167,356
$836,000
Saving
FedEx Fees
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 26% decrease in total shipping costs.
- 100% Success Rate for Clients Savings
- 30+ Years of Experience
- Thousands of Successful Clients
Schedule a Call With our Team
Contact us through phone or email, or submit a callback request through this form.
