As anyone reading this knows, shipping costs are a significant challenge for small and mid-sized businesses, often spiraling out of control with the potential to negatively impact the bottom line.
Frustrated by rising expenses and unsure of how to address the issue, many companies turn to parcel spend consultants for help. While these consultants can initially provide relief by negotiating better discounts and reducing shipping costs, a similar pattern often takes over, turning what seemed like a positive business decision into a vicious, never-ending circle.
To better understand the cycle, we can break it down into specific stages:
- Stage 1: “Our Parcel Spend is Out of Control!”
It all begins with businesses feeling overwhelmed by their escalating shipping costs. As expenses soar, management becomes increasingly concerned about the impact on profitability. Something needs to be done, but they lack the expertise and resources to navigate this complex challenge. No one knows where to start.
- Stage 2: “We Need Help – Time to Hire a Consultant”
Enter the parcel spend consultant. These industry experts analyze the shipping profile of the company to help the shipper negotiate improved discounts with carriers, typically the big two of FedEx and UPS. These consulting engagements typically involve a “gain share” contract, where consultants earn a percentage of the savings they generate over a specific period of time, usually three years. The consultant’s involvement brings hope and anticipation of cost reduction, and the company’s executives feel like they’re finally doing something about the problem.
- Stage 3: “Great! Our Shipping Costs Are Lower”
Thanks to the consultant’s efforts, the company experiences a decrease in shipping expenses. The initial success brings relief and satisfaction to the shipper’s executives, who celebrate the newfound savings. It feels like a significant win for everyone involved.
- Stage 4: “Why Are We Paying for a Consultant?”
However, as time passes, the shipper realizes that they’ve been consistently paying the consultant their “gain share” fee, without seeing much ongoing value beyond the original negotiated rates. Payment fatigue sets in, exacerbated by increasing payments to the consultant that they haven’t seen for a year due to external factors like business growth and annual rate increases. By the time the multi-year contract is up for renewal, disillusionment prevails, leading many to decide not to renew the agreement.
- Stage 5: “We Can Do This on Our Own – I’m Sure of It!”
Feeling dissatisfied and determined to take control, the shipper decides to renegotiate carrier agreements independently, believing they can handle the task without consultants. Besides, what’s so hard about it? We’ve learned a great deal from our consultant and can easily take over. Unfortunately, without the specialized analysis and guidance provided by consultants, most businesses soon find themselves back at stage one all over again, where their shipping costs are spiraling out of control. The vicious cycle restarts once again, and the business begins searching for a consultant to help.
There Has to be a Better Way
Here at Reveel, we’ve been a part of this cycle before, so we understand how frustrating it is for everyone involved. It’s time for shippers to break free and walk their own path.
Reveel’s shipping intelligence platform is what can help shippers enact a lasting change to the process. By leveraging powerful data analytics and proprietary software, Reveel’s platform provides comprehensive insights into shipping operations, identifies areas of improvement, and unlocks substantial savings for businesses.
Most importantly, with Reveel’s data and analytics in your toolbelt, there’s no need for expensive long term gain share based consultant contracts. Shippers gain full visibility and control over their shipping operations, and finally have the technology, information and power to “do it themselves.”
Don’t get caught in the never-ending vicious cycle ever again; let us help you experience a new era of parcel management success.
