C a s e S t u d y

Background

A mid-sized equipment manufacturer based in New England, faced increasing logistical challenges as they expanded their market across the United States. The company previously relied on multiple Less-than-Truckload (LTL) shipments to deliver products to various regional warehouses and customers. However, this method led to high shipping costs, increased risk of damages, and inefficiencies in the supply chain. To address these issues, They enlisted Tech Logistics to help consolidate their shipments into full truckloads for cross-country transportation, then use regional LTL carriers for distribution.

Objectives

1. Reduce Shipping Costs: Lower overall transportation costs by consolidating shipments.
2. Enhance Efficiency: Improve logistical efficiency and streamline the supply chain.
3. Minimize Damages: Reduce the risk of product damage during transit.
4. Improve Delivery Times: Achieve more consistent and predictable delivery schedules.

Implementation

The Equipment Manufacture partnered with Tech Logistics, a third-party logistics provider, to implement the new shipping strategy. The plan involved the following steps:

1. Consolidation Centers: Establish consolidation centers in Ohio, South Carolina, and Utah
2. Full Truckload (FTL) Shipping: Consolidate all products bound for the Southern, Central and Western States into full truckload shipments, which are then transported to the distribution centers.
3. Regional LTL Distribution: Utilize regional LTL carriers to distribute the shipments from Ohio, South Carolina, and Utah to various destinations in those regions of the United States.
4. Technology Integration: Implement a robust Transportation Management System (TMS) to coordinate and track shipments, manage consolidation processes, and optimize routing.

Results

• Transportation Costs: They reduced their overall transportation costs by 25%. The cost savings were attributed to the economies of scale achieved by moving larger volumes of products in full truckloads and reducing the number of LTL shipments.
• Fuel Efficiency: The consolidation of shipments into full truckloads resulted in better fuel efficiency, further lowering costs.

• Operational Efficiency: The streamlined process of consolidating shipments at the manufacturing site and central distribution hub improved operational efficiency. There was a significant reduction in handling times and administrative work.
• Inventory Management: With a more predictable and consistent shipping schedule, they were able to optimize their inventory levels and reduce excess stock.

• Product Safety: he consolidation into full truckloads minimized the handling of individual shipments, reducing the risk of damage. As a result, there was a 30% decrease in reported damages and claims.
• Packaging Costs: Improved safety during transit allowed the company to use less protective packaging, leading to additional cost savings.

• Delivery Times: By leveraging regional LTL carriers for the final leg of the journey, they achieved more reliable and faster delivery times to their customers in the Eastern United States.
• Customer Satisfaction: Improved delivery performance and reduced damages led to higher customer satisfaction and fewer service-related complaints.

Conclusion

The strategy of consolidating shipments into full truckloads for cross-country transportation, followed by regional LTL distribution, proved highly beneficial. The company successfully reduced shipping costs, enhanced logistical efficiency, minimized product damages, and improved delivery performance. This case study highlights the potential benefits of such a strategy for other companies facing similar logistical challenges in a geographically diverse market.