The Challenge
A mid-market distributor of industrial maintenance, repair, and operations (MRO) parts was experiencing freight costs rising at 18% year-on-year — far outpacing revenue growth of 7%. The structural causes were clear: the company had expanded through regional acquisition and had never rationalised its carrier base, resulting in 23 freight providers operating across an overlapping distribution network with no centralised visibility. Routing decisions were made ad hoc by warehouse staff, carrier selection was inconsistent, and there was no management information to identify where spend was concentrated or where service levels were failing. Two key accounts had formally cited delivery inconsistency as grounds for contract review.
The Approach
The engagement began with a 14-month freight audit covering all shipments across every distribution centre. Actual delivery routes were mapped against optimal paths, quantifying the cost of suboptimal carrier selection and uncoordinated routing. A consolidated carrier RFP was structured around the full network volume — enabling genuine leverage — and resulted in a primary panel of four carriers replacing the existing 23. A cloud-based transport management system (TMS) was selected and integrated with the existing warehouse management platform, enabling automated carrier selection based on configurable cost, speed, and service-level rules. For the company's owned local delivery fleet, route optimisation software was deployed with real-time traffic adjustment.
The Outcome
Total freight spend fell by 31% in the first full year following implementation, against a project investment that achieved full payback within seven months. Average order-to-delivery time improved from 4.2 days to 2.1 days across the network. Real-time shipment tracking eliminated the majority of inbound customer calls about order status, meaningfully reducing operational overhead in customer service. Both at-risk key accounts renewed their contracts. The improved delivery proposition contributed to a 12% increase in new customer acquisition in the following financial year, with delivery reliability cited as a primary differentiator in post-sale surveys.