Case study: Reducing shipping costs through parcel invoice audits
AFS SERVICES:
HIGHLIGHTS
$800,000
In Parcel Shipping Savings Over 12 Months
$184,000
In Short Pay Savings In One Week
ABOUT THE CUSTOMER
A national fashion retailer with 1,000+ stores and an e-commerce presence, sells women’s and children’s apparel, shoes, and accessories. Headquartered on the East Coast, it operates a multi-level warehouse that ships to locations across the U.S., Puerto Rico, and the U.S. Virgin Islands. Over 90% of its $24 million annual parcel spend goes through a single carrier.
“No matter what home grown system you’ve built, AFS is more equipped and a thousand times better than an in-house system. Your accounts payable and IT groups aren’t the answer. AFS are the professionals.”
National Retailer's Director of Supply Chain Logistics
CHALLENGES
The carrier eliminated discounts for some accounts and had inadvertently started charging list pricing for thousands of the retailer’s shipments. When the retailer opened a new store, shipments to that location were not routinely associated with their contracted discounts. In addition, shipping charges were sometimes misapplied—leading to an even greater need for the retailer to keep a close eye on their parcel spend.
SOLUTIONS
For the last decade, the retailer has relied on AFS Parcel Audit to identify and track discrepancies in their parcel shipping invoices—and recover eligible refunds. When billing errors occurred, AFS found the discrepancy, communicated it to the carrier, and sought confirmation from the carrier when the refund was approved. Every week, AFS has provided the retailer with reports that contained package-level detail and audit findings. The retailer then scrutinized these reports and shared the information with their executive committee for review. “AFS made it easy to identify what the report was conveying, and our executives could manage their way through them. We didn’t want to drown them with data,” said the retailer’s director of supply chain logistics. Every year, the retailer has tasked AFS with analyzing their total parcel spend to ensure their contracted 3.5% rate cap hasn’t been exceeded. Through the audit process, AFS has identified instances where the rate cap was exceeded and worked with the carrier to have the rates adjusted to 3.5% or less.
RESULTS
The retailer has saved nearly $800,000 on its parcel spend over a 12-month period with AFS. Recently, in the course of just one week, AFS generated $184,000 in refunds for the retailer. If not for AFS, the retailer would have to build the capacity in-house to perform parcel audits. Outsourcing their parcel audit to AFS made the most sense—from both an internal resources and industry expertise perspective. “No matter what home grown system you’ve built, AFS is more equipped and a thousand times better than an in-house system. Your accounts payable and IT groups aren’t the answer. AFS are the professionals,” said the director of supply chain logistics.
