Webinar Recap: Breaking Down Carrier Contracts for Maximum Savings

As shipping rates climb, how will your eCommerce business keep up? With FedEx, UPS, and DHL already releasing their 2025 rates, now’s the time to dive deep and take control of your shipping expenses.

These imminent price adjustments make it clear how vital it is to understand carrier pricing agreements and their impact. This way, your operations remain efficient without compromising your bottom line!

In this webinar, Glenn Gooding will uncover hidden costs in carrier contracts, simplify complex terms, and provide real-world examples to show how businesses can achieve significant savings.

Speaker Highlights: Glenn Gooding

The speaker for this webinar is Glenn Gooding, President of iDrive Logistics. A seasoned leader with almost 40 years of expertise in small parcel shipping, logistics, and supply chain management, Glenn is renowned for driving a remarkable 17% reduction in shipping expenses for eCommerce businesses through his proven strategies. 

His extensive experience spans Fortune 50 companies and startup eCommerce brands, enabling him to craft strategic solutions and empower businesses to navigate the fast-evolving and cost-competitive logistics landscape.

Key Takeaways

Setting the Stage for 2025: UPS vs. FedEx vs. DHL

Aligning your company competitively in the cost-driven logistics industry is essential. Navigating the evolving carrier landscape requires informed decision-making to balance operational efficiency, cost, and customer experience. However, with the many carrier options available today, choosing has become more challenging than ever.

To help you make more informed decisions, here’s an overview of the major three global carriers, along with their strengths and weaknesses:

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• UPS: Has comprehensive U.S. coverage, extensive global network, and robust tracking capabilities. However, they have the highest operating expenses due to recent labor agreements, pricing complexity, and less flexibility for bespoke solutions.

• FedEx: Strong U.S. and international networks with a focus on express shipping. While working to integrate express and ground networks for efficiency, they currently face challenges with operational costs and network separation.

• DHL: Unmatched international coverage and expertise in customs and brokerage services. However, it lacks an intra-U.S. network and can have inconsistent pick-up service.

3 Factors to Consider When Choosing a Carrier

Choosing your carrier is as crucial as defining your brand. They often serve as an extension of your business, representing you directly to your customers. Plus, they help shape your operations and cost structure, influencing everything from delivery performance to customer experience and overall efficiency!

That’s why it’s important to keep these three considerations in mind when selecting the right carrier for your business:

• Define objectives: Start by clearly outlining your company’s logistics goals and gaining a thorough understanding of your market's needs and dynamics. This clarity will guide every decision in your carrier selection process.

• Adopt multi-sourcing: Consider using multiple carriers to enhance flexibility and reduce costs. However, this approach requires a well-thought-out plan. Carriers often penalize volume shifts in their pricing agreements, so ensure your operational and technical systems are aligned to handle the complexity effectively.

• Maintain integrity: When introducing competition among carriers, do so with genuine intent. Using competitive offers solely as leverage, without plans to switch carriers, can harm your credibility and strain long-term relationships.

Case Study #1: Industrial Distributor

Glenn Gooding and iDrive Logistics partnered with a leading industrial products and services provider to optimize shipping costs through strategic, data-driven solutions.

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Background

• Long-standing relationship with UPS from 2015 to 2018.
• Predominantly a ground commercial shipper, this company initially received an average discount of 51.60% on ground commercial shipping when they began working with iDrive.

Initial Challenges: 

• The company needed to improve spending on ground commercial shipping to drive financial improvements.
• They also wanted to give their carrier more flexibility to help achieve these goals.

Solutions:

• A comprehensive analysis of the company’s shipping spending to understand the key drivers of costs and develop the strategy.
• Flexibility with carriers to meet company goals without being tied to specific cost elements.
• Evaluation of other carrier contracts to identify opportunities for savings, analyzing 21 carrier pricing proposals.

Results:

• Annual savings exceeding $200,000
• 5x reduction in costs over 6 years (2019 to 2024), with a reduction charge improving from $0.60 to $3.70 on the minimum charge
• Residential surcharges increased from 0% to 50%
• iDrive helped adjust additional handling, address corrections, fuel surcharges, and dimensional billing.
• Strategic partnerships with UPS and FedEx, enhancing collaboration and cost management.
• Proactive strategies to manage expected 2025 rate increases.

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Case Study #2: Janitorial Supply

iDrive helped a $5.8M UPS janitorial shipper achieve significant cost reductions.

Background

• The client is a janitorial supply company that makes significant commercial and residential ground shipments and expedited shipments. 
• This client is similar to owner-operators involved in restoration projects.

Initial Challenges: 

• The company used UPS for 98% of its shipments, with a small percentage going through FedEx.
• Identifying areas where sourcing changes could be made to optimize costs without bringing in non-incumbent carriers.

Solutions:

• Maximum cost savings, not just increased discounts.
• Establishment of two carrier relationships, UPS and FedEx, to enhance the quality and diversity of shipping options.

Results:

• Reduced total cost per parcel from $12.58 to $11.13, leading to savings of $1.45 or nearly 12%
• Over $600,000 per year in savings
• Additional savings through improvements in dimensional billing, bringing the total savings to 11.5%
• Clear, data-driven insights, making the savings and the impact of each change easy to understand through a simplified savings report and executive summary

Watch the Webinar Replay

Did you miss Glenn Gooding’s insights on optimizing logistics and reducing costs? Revisit Glenn’s proven strategies and best practices for navigating the evolving logistics landscape below:

Download the Slides

Optimize Your Carrier Contracts & Maximize Your Savings with iDrive

With the right data and insights, optimizing your shipping costs is more achievable.

The secret: Analyze key data and implement smart strategies, such as defining clear objectives and adopting a multi-sourcing approach. You’ll uncover opportunities to reduce your carrier expenses and improve your bottom line!

At iDrive, our core mission is to help businesses maximize their savings while maintaining strong relationships with carrier partners. With our expertise and experience, we specialize in optimizing carrier contracts and crafting strategies that deliver winning results.

Ready to boost your savings? Contact our team today, and let's discuss how we can help you achieve your goals!