Parcel Advisory Case Study
Customer Annual Net Spend in Parcel
Cost Reduction Communicated Pre-Engagement
Cost Reduction Realized Post-Engagement
We had assisted this client with parcel advisory services in 2017. The company sells products that support the retail, commercial, and retread tire industry, and UPS has been their primary carrier for over 20 years. In the summer of 2020, we ran an updated baseline review, which uncovered an additional cost reduction opportunity of over $200,000 annually, representing a 7.06% savings. In reviewing the opportunity with the client’s team, they agreed to extend our agreement for an additional 12 months and work with us to help secure these savings.
It was a challenging negotiation because UPS pushed back hard against the client’s request for increased discounts, saying that UPS had already provided aggressive reductions in the first negotiation. UPS leaned hard on the fact that the new leadership at that company had made it clear that they were comfortable walking away from unprofitable business. After two offers from UPS that provided no substantial savings, we persuaded the client’s team to entertain a proposal from FedEx. The FedEx proposal provided the leverage we needed to pressure UPS into providing market-appropriate discounts.
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