Case Study Cost Savngs

M AND M FORWARDING

OF BUFFALO, NEW YORK, INC.

Toll Free: 1-855-692-1825

M and M Forwarding is "Freight in Motion"

How Does Consolidation Work? A Case Study

Overview

Consolidation Services provide Canadian based businesses with an opportunity to put both higher levels of certainty with less work and lower cost into their US to Canada supply chain.

This Case Study provides a look inside the process for an average Consolidation client with a stream of package and LTL shipments from a variety of US suppliers.

It is important to keep in mind that the mix, frequency and volumes will affect what you might expect but these same types of benefits can accrue to smaller and larger companies.

Client Profile

A successful Mississauga, Ontario based distributor of books for the music industry received a variety of shipments throughout a three day period.

These 20 shipments were spread among LTL, single package and multiple package shipments. Not all of the suppliers complied with the required paperwork and information needed for a successful border crossing.

We worked with the client to provide clear instructions on what was needed and when for specific packages.

Client Package and Load Profile

Below is a profile of the shipments received by M and M on behalf of the client.

Column 6 indicates the cost of the shipment if it were to have gone from the US supplier to the Mississauga based company.

Column 7 is the cost to ship the same shipment to the M and M facility in Buffalo.

Direct Savings through M and M Consolidation

The total freight charges would have been $3,816.57 to bring the 20 shipments from the US suppliers directly to their dock in Mississauga, Ontario. By having their suppliers send their shipments to M and M Forwarding for consolidation, the cost was $1,870.66, for a difference of $1,945.91.

In addition to the $1,455 dollars saved in this three day period, there are other savings the client realized...

Additional Savings Opportunities

In addition to the $1,455 dollars saved in this three day period, there are other savings the client realized.

Consolidated Customs Entry

If shipped across the border individually, each of the original 20 shipments would be subject to a minimum customs brokerage fee as each would need separate customs entries at the border. Even though the brokerage fees are typically a function of value and volume, the total fee for the single consolidated customs entry can be significantly less than a series of minimum, single entry fees.

Reduced Handling at Dock and Back Office

In addition, if not consolidated, each package and truck shipment would arrive on their own schedule, each requiring resources to be unloaded and received at the client’s dock. By knowing that a large shipment is going to arrive, and when, the proper resources can be assigned and used much more efficiently for unloading and receiving.

We also advise the client’s back office about how their suppliers can improve their readiness for the clearance when their shipments arrive at M and M. Although we are designed to deal with the exceptions some of them can be avoided right from the supplier which can reduce our handling fees to you.

The paperwork that needs to be followed for clearance and receiving for a consolidated shipment is also simplified, making tracking and recording easier on your back office.

Potential Prepaid Domestic (inside the US) Freight

Many US companies offer their customers a common incentive of “free freight” for purchasing their goods at certain quantities or times of the year. However, these incentives are limited to domestic delivery to an address within the continental US.

By using the M and M Forwarding Consolidation Service, you are able to take advantage of these incentives whenever they arise.

Summary

For this client, the savings with M and M Forwarding represent a 38% savings on the shipping and handling fees alone and they also enjoyed lower brokerage fees.

The contents of the 20 separate shipments all cleared together and arrived together at a predictable time. For the client, they achieved high certainty of clearance and delivery time with less work on their part AND lower costs.

Whether you are looking at consolidation services for the first time or have an existing program, contact us to see what we can do for you.