Logistics Outsourcing | Case Study 1

Outsource Nationwide Retail/ CPG Distribution - A $260M CPG apparel company was unhappy with a poorly constructed and punitive service agreement and rising costs of an incumbent warehousing 3PL that was operating its only nationwide distribution center. The client sought help to prepare a Request for Proposal (RFP) to replace the 3PL

Leveraging a robust outsourcing methodology and extensive analysis and knowledge of capable 3PLs, an RFP was developed and shared with a long list of 3PLs with existing facilities and adequate space to accommodate forecasted storage volume, as well as proposed facilities requiring new leases and equipment and systems implementation. Qualitative and quantitative analysis provided a forecast of warehousing costs on a total and cost per unit basis, including drayage, storage, handling, technology, fixed and variable costs, overhead, and investments over the proposed 5-year contract term.

During the project, the 3PL incumbent announced new ownership. The new owner was motivated to retain the client’s business and find a better facility to sharply reduce rates. All 3PL bidders were vetted on qualitative and cost criteria.  

Service agreement terms were substantially changed with the 3PL incumbent that also proposed a better facility at a lower occupancy cost, which resulted in the lowest total cost bid, which was 10% lower than the average bid. It was awarded the warehouse outsourcing contract.