Overview:

This case study focuses on an e-commerce startup that faced significant challenges in managing carriers and negotiating contracts. The company needed to improve its supply chain operations to reduce costs and improve efficiency. 

Challenge:

The e-commerce startup had a multi-modal network and faced several challenges in managing their carriers. The company had experienced significant increases in freight and small parcel shipping costs due to carriers' pricing strategies. The company needed to find a way to negotiate better pricing with their carriers and reduce costs while increasing service quality.

Solution:

Swift began by analyzing the company's carrier usage and identified several areas for improvement. Swift recommended that the company switch to flat rate carrier rates for specific lanes. This would help the company avoid fluctuating pricing and make it easier to budget for shipping costs. Additionally, Swift suggested sourcing new freight partners to create competition among carriers, which would drive down pricing.

Swift also identified carriers that were not meeting the company's service level requirements and recommended dropping them in favor of carriers that met or exceeded those requirements. This would help the company improve its overall service quality and reduce the risk of shipping delays or errors.

Results:

The e-commerce startup was able to successfully negotiate new contracts with its carriers and implement flat rate carrier rates for specific lanes. These changes resulted in a net savings of approximately 25% for both freight and small parcel shipments. The company was also able to improve its service quality by dropping carriers that did not meet its requirements and working with carriers that met or exceeded those requirements.

Conclusion:

Managing carriers and negotiating contracts can be a complex process, but with the right expertise, it can be done successfully. The e-commerce startup was able to reduce costs, improve service quality, and create a more efficient supply chain by implementing new carrier management strategies. The company can now focus on growing its business without the worry of high shipping costs or poor service quality.