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Client Case Study

This Sporting Goods Company Doesn’t Play Around With its New Parcel Agreement

Manufacturing
Logistics Engineering

CLIENT
Midwestern Sporting Goods Company

INDUSTRY
Sporting goods manufacturing

COMPANY SIZE
501-1,000 employees

SIFTED SOLUTIONS USED

  • Logistics Engineering

This Midwestern sporting goods company manufactures and distributes sporting goods, archery equipment, indoor and outdoor game supplies, and fitness products through brick-and-mortar and online retailers. The company ships more than 200,000 packages each year, from dart tips that weigh only a few ounces, to game tables that weigh hundreds of pounds. When the company faced excessive fee increases with a new carrier contract, Sifted contracting experts helped the company save more than $600,000 in annual parcel shipping fees.

Though this operations manager has spent decades in warehouse operations and distribution, he fully admits he didn’t know a lot about parcel shipping before his current role.

His experience was mostly in local and regional distribution of fresh foods, produce and restaurant supplies, delivered on dedicated fleet trucks.

When recently evaluating a new carrier agreement and General Rate Increase from UPS, he knew he needed help. The agreement as it was presented would likely drive up shipping expenses by more than $400,000 annually.

The operations manager called Sifted, which had worked with the company on parcel shipping auditing for several years. That’s when he engaged Sifted’s Logistics Engineers.

“We’re a public company and the proposed parcel shipping increase could have become a material hit to our financials and our shareholders,” the operations manager said. “But Sifted was able to take what looked like an impending loss and turn it into an actual annual savings of more than $600,000. It was incredible what they helped us accomplish.”

Action: Preparation and Practice Before the Big Game

A cursory review and cost projection of the initial contract from UPS was prepared and passed around the office. It appeared that the company would save about $145,000 annually.

“We had a lot of smart people look at this carrier agreement carefully, but it’s very difficult to understand the complexity, terms and conditions,” the operations manager said. “The fine print is where you can really get hurt.”

When Sifted applied the new agreement to the shipping patterns and data of the company, the initial savings of $145,000 turned into a $415,000 increase in shipping costs. “It was a shock but Sifted immediately showed us what to negotiate,” the operations manager said. “They also suggested we bring in another major carrier to bid on the agreement to help us hedge our negotiations and leverage our buying power.”

Outcomes: The Company Shoots, Scores – And Wins

The Sifted team provided thorough analyses that broke down the complexity of the agreement and gave him guidance on more appropriate fee structures. “Sifted even gave us negotiating tips on where to get tough and where to go easy. It was good to get their insights on the finer points of phrasing and delivery.”

The Sifted projections have been on target and the detailed reporting has been excellent. The operations manager can access and send Sifted reports to accounting and other departments on demand and everyone in the company can see the results immediately.

“The value that Sifted brings to the parcel auditing and contract negotiation process is remarkable,” the operations manager said. “Their expertise has saved us and our shareholders hundreds of thousands in hard costs and probably several million in stock value. It’s been a huge win for us.

– Operations Manager at This Midwestern Sporting Goods Company

“The value that Sifted brings to the parcel auditing and contract negotiation process is remarkable,” the operations manager said. “Their expertise has saved us and our shareholders hundreds of thousands in hard costs and probably several million in stock value. It’s been a huge win for us.

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