IMS clients have numerous options for delivering their merchandising campaigns to market. It’s often a balancing act to ensure speedy delivery to retail without driving up freight costs. One pharmacy retail client wanted to evaluate ways to reduce their transportation costs without sacrificing their speed to market. IMS proposed an innovative solution that would reduce associated freight fees with minimal impact to delivery timelines to the retailer’s 9K+ store footprint.
Client Case Study
Delivering Significant Freight Savings with Zone Skipping
The retailer relied on costly parcel shipments to deliver merchandising kits to individual retail locations. With over 9,000 stores in their network averaging 18 merchandising kits annually, individual parcel shipment added significant freight costs to their merchandising program.
IMS logistics analysis showed one common industry alternative to parcel shipments, a regionalized production and distribution approach, would proliferate setup and kitting costs. While freight expense would be reduced, this approach could not offset the significant increases in other areas.
Instead IMS experts proposed a Zone Skipping approach, which would allow the retail client to benefit from reduced rates with larger truckload shipments.
This innovative solution reduced the total cost of the retailer’s merchandising kit program by minimizing their overall dependence on parcel, while maintaining the efficiency of centralized production and kitting.
With a centralized production and kit packing operation, campaigns are initially packed as parcels before being loaded into FTL and LTL containers and shipped to regional distribution zones in CA & GA. Once arriving in these zones, the larger shipments are broken back down into individual parcel shipments for the final mile of their journey.
In the first year the client was able to reduce their merchandising freight costs by $270,000, saving 14% on their transportation spend over the previous year, with no loss in their speed to market.