Reduced Freight Cost: Cosmetics Distributor Lowered Freight Expense by 34 Percent

Challenge

A major distributor of cosmetics to pharmacy retailers was sending multiple boxes to a single location, which was increasing freight costs unnecessarily. Every parcel package that a company sends has a minimum cost to ship, regardless of weight. In this case, the distributor was paying $10.54 to ship two 10-pound packages from their Maryland facility.

Solution

We recommended the purchase of a strapping machine that runs 3/8” polypropylene strapping to strap two 10-pound boxes together to be shipped as a single package.

Results

Sending one 20-pound package that contained two boxes reduced the shipping cost to $6.90 total. This 34 percent reduction earned them a quick payback on the machine of 3.8 months.

Related Solution

Reduce Freight Costs

The three largest variable costs for a shipping operation are freight, labor and packaging materials.

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