Logistics cost reduction by 22% in 3 months
We conducted a vendor audit for a transport company. We negotiated better rates and eliminated duplicate insurance charges.
Cooperation with TransSpedycja Silesia showed that even in a well-organized logistics company, significant savings can be found. We focused on eliminating unnecessary external costs and renegotiating contracts with fuel and insurance providers.
The challenge
The company was struggling with rising fixed costs, which increased by about 14% in Q1 2024. The primary problems were redundant insurance policies for a fleet of 18 vehicles and a lack of hard control over subcontractor margins. Management noticed that the profitability of individual routes was falling, despite persistent demand for transport services.
Our approach
The Profit Doctrine team entered the company in March. We started by reviewing 147 cost invoices from the previous six months. Our priority was verifying the actual utilization of insurance and service contracts. Then we conducted talks with three key fuel suppliers, using the client's scale of operations as an argument to lower rates per liter by an average of 7 groszy.
The solution
We introduced a cyclic invoice verification system, which relieved the accounting department of 12 hours of work per month. We negotiated an insurance package that replaced three previous, more expensive policies. Additionally, we implemented a simple fuel cost control sheet, which allows catching consumption anomalies during the month, rather than after the bill is issued.
Results
After 90 days of work, we managed to permanently lower operating costs, which directly translated into a higher margin on every load transported. We only count real profits, so the implemented changes are now a permanent element of the company budget.
Timeline
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March 2024Audit of fixed costs and invoice analysis
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April 2024Negotiation of rates with fuel and insurance providers
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May 2024Implementation of cost control system and final audit
"I was skeptical about the audit because it seemed like we were cutting everything possible. The effect exceeded expectations, especially in the area of insurance. We now have better order in our documents."