The Challenge
A California-based tech manufacturer was producing machine goods in Shenzhen, China, for customers in the U.S. As they had no organization in Asia, the solution had been to rely on their third-party manufacturer to ship finished goods directly from Shenzhen via international parcel carrier to each individual customer. This method allowed them to track and manage each exported package, but it added extra costs that compounded into unnecessary waste.
Since every order that came off of the assembly line in Shenzhen was shipped to the U.S. as an individual package by the carrier’s air service, each one incurred an export fee on top of the already high per-pound price. Though relatively small, these flat fees accumulated as orders piled up, with each exported package racking up a charge regardless of its weight or value. Besides the bloated cost associated with it, this inefficient system presented serious questions about its own sustainability.
The Solution
Morgan contracted with the manufacturer to optimize their flow of goods, building another relationship with a valued client. The client’s goods were transported to nearby Hong Kong before being consolidated and shipped weekly on pallets to the U.S., drastically reducing the quantity of exported packages and export fees. Morgan collected the pallets at their facility in Dallas, TX, where the centralized location simplifies shipping routes to the client’s U.S. customers.
The strategy behind Morgan’s process included delaying the use of any parcel carriers until the “last mile” of a package’s journey. Morgan consolidated and pre-labelled the client’s packages in Hong Kong for international shipment and then, from Dallas, hired a parcel carrier to deliver them to the customers. This measure helped eliminate loads of export fees for the client, not to mention its contribution to lower carrier costs. Beyond that, fewer shipments led to a far less wasteful transportation solution.
The Results
By sorting and consolidating the client’s goods from their origin in Asia, and postponing the use of parcel services to ship those goods to U.S. customers, Morgan shaved almost one third off of the client’s shipping budget.
Morgan’s work improving the client’s flow of goods resulted in:
Transformative cost reductions
- Overall savings of one third transportation costs
- Lower carrier charges
- Fewer export, customs and import fees
Greater reliability
- Less damage from less package handling
- Fewer shipments to track and manage
More predictability
- Regular shipments between two locations
- Less handling time for parcel carriers
Improved sustainability
- Fewer shipments, fewer trips
By employing data-driven solutions guided by common sense, Morgan was able to optimize the client’s flow of finished goods using a custom-tailored approach. With Morgan’s partnership, the client cut their costs tremendously by avoiding excessive export fees, improving the sustainability of their operation in the process. Download case study.
TIME IS MONEY—WE CAN SAVE YOU BOTH Let Morgan eliminate the efforts associated with uncovering hidden, internal costs of managing a logistics mess. We'll look at the end-to-end network and discover the best methods to leverage cost savings for your needs.
