Shipping Cost Optimization +

Newmine’s Shipping Cost Optimization + service has been developed by the team of distribution and logistics professionals responsible for identifying and achieving Millions in annual outbound shipping savings for world class brands like Express, Eddie Bauer, Spiegel, J Jill, and Orchard Brands. Shipping Cost Optimization+ combines review, benchmark analysis, and concrete recommendations to generate savings for retailers seeking to reduce their annual transportation spend.

Why would you need the Shipping Cost Optimization + Program?

  • Outbound parcel shipping costs represent 5-6% of the retailer’s top line revenue. For each $100MM in revenue, this translates to $5-6MM in costs. A 5% savings can mean $300K annually to your bottom line.
  • An experienced team with access to a wide array of historical benchmark information can help insure that you are not viewing contract terms, rates, and discounts from a single vantage point.
  • Large carriers capitalize on your operational inefficiencies. Surcharges and accessorial fees can grow your outbound shipping spend, in some cases up to 20%. We understand the impact of upstream operations on shipping costs and can help you optimize your operations to reduce costs.

The key components of Shipping Cost Optimization+: Strategy, Planning, and Execution

Outbound shipping expense is a major outlay and should be treated with the same diligence as a major capital outlay. Our experts use an integrated approach based on three key elements: Strategy, Planning, and Execution.
Strategy:

  • Understand your current environment including contract terms, rates, and discount structures. This also includes shipping volumes by service level, weight and geographical distribution.
  • Understand your growth directives and the potential impact of product line changes, shipping demographics, and customer service levels
  • Understand the impact of surcharges and accessorial fees on outbound spend.
  • Overlay anticipated changes in carrier rates and charges
  • Understand the current customer return shipping model and cost structure

Planning:

  • Comparison of your current contract terms, rates and discount structures with our benchmark data to identify opportunities for improvement
  • Evaluate current cost structure by service level versus our benchmark data to identify opportunities to reduce cost while maintaining or improving service level
  • Evaluate the reasons behind surcharge and accessorial charges to identify areas of improvement and cost reduction
  • Evaluate potential upstream operational solutions to reduce outbound shipping expense

Execution:

  • Accurate benchmark data for carrier contract terms, rates, and discount structures improves your negotiating power
  • A thorough understanding of your shipping demographics provides focus to negotiate the most relevant weights and zones to save you the most
  • Reduce surcharge and accessorial fees by understanding the root causes and executing upstream operational improvements
  • Adapt to and mitigate planned carrier rate increases
  • Optimize your customer returns costs