Case Study: How CDS’s Proximity To Major Transportation Hubs Help Cut Costs And Increase Efficiency for Retail Product Companies
When a consumer goods company that imports shipments from overseas faced increasing costs on the West Coast, while also seeking to grow its business on the East Coast, it turned to 3PL partner Customized Distribution Services to cut costs and increase efficiency.
Partnering with a 3PL that offers warehouse proximity to major transportation hubs is key to reducing the cost of shipping and shortening order transit times. CDS’s nine distribution centers across the United States provide highway access and major market proximity to optimize product storage and shipment, helping customers like this particular consumer goods company manage the complexities of today’s supply chain so they can focus on growing their business.
The Client
The consumer goods company, which includes a major home improvement retailer among its largest customers, has been a CDS client for some time. The company had been importing products on the West Coast already, and was looking to expand operations to the East Coast in order to meet the proximity needs of its large client.
The products arrive containerized, after which CDS unloads the containers onto shipping platforms and houses the inventory until it is picked up by the consumer goods company’s customers or carriers. The products are transported from CDS’s warehouses to customer distribution centers.
While the company did not require a customized solution from CDS at this time, it benefited from the 3PL’s expertise and widespread distribution network, which offers warehouse proximity to major transportation hubs.
The Challenge
In addition to the need to expand its business to the East Coast, the consumer goods company was facing warehouse lease rates in southern California that were becoming a financial burden. Over the past five years, warehouse storage rates have more than doubled in that area. In order to remain efficient while maintaining profits, the company needed a new logistics solution.
For companies like this, whose customers drive their geographical business, flexibility and timeliness are important when working with a 3PL provider to better meet customer needs. An experienced 3PL not only has the distribution network to support these changing needs, but the expertise to compare location options to find the most efficient, cost-effective solution.
The Solution
CDS was able to find solutions for both of the consumer goods company’s challenges.
On the West Coast, this involved moving operations north, from the Port of Long Beach to the Port of Oakland. This shift saved the company roughly half a million dollars in storage costs annually, compared to staying in the same warehouse footprint in southern California. Before implementing the solution, CDS considered the locations of the client’s regional distribution centers, calculated any changes in transportation costs and shipping times, and determined the overall impact that the change would have on the consumer goods company and its customers.
On the East Coast, the company switched from another 3PL to CDS due to its positive experience with CDS’s service and solutions. Shipments reach Savannah, Ga., by way of the Panama Canal, since this is more cost-effective than being imported on the West Coast and transported across the U.S. From there, product is moved to the CDS distribution center in Richmond Hill, Ga., where order preparation takes place. This facility’s location provides easy access to and lower costs associated with transportation.
The Results
The results on the West Coast were significant: the consumer goods company was able to save roughly $500,000 annually by moving its operations with CDS farther north. As a result, the company did not have to pass along those increased costs to its customers.
CDS was able to offer this solution due to its widespread networks of distribution centers and its experience in finding custom solutions for clients. By thinking outside the box — importing and warehousing at a smaller port, then transporting products elsewhere —the consumer goods company realized significant cost savings.
On the east coast, CDS offered the company similar efficiency and cost savings, importing products in Savannah as opposed to more populated areas like New Jersey. Compared to the company’s former 3PL partner, CDS also provided a substantial improvement when it came to inventory management.
Since 1996, CDS has been one of the leading 3PLs in the U.S., providing advanced logistics services and solutions via a national network of modern distribution centers managed to precise safety and operational standards. We help our retail clients drive sales, improve customer service, streamline operations, and stay ahead of supply chain issues. The result is a partnership that delivers strategic support and customized services to help you deliver on time and budget for your customers.
To learn more about reducing shipping costs and order transit times by partnering with CDS, contact us today or reach out to request a quote.
“By thinking outside the box — importing and warehousing at a smaller port, then transporting products elsewhere — we realizedsignificant cost savings.”
