How to Optimize Logistics Costs with a Supply Chain Consultant

For CEOs in consumer product companies, an efficient supply chain is central to controlling costs and maximizing profits. But supply chains today can be complex, often involving multiple distribution points, third-party logistics (3PL) partners, and a web of transport services. The logistics expenses tied to these networks can easily climb, creating hidden costs that cut into profit margins. This is where a seasoned supply chain consultant steps in—to identify cost-saving opportunities and design a streamlined, lower-cost model that supports both your current needs and future growth. Optimizing logistics costs with a supply chain consultant can unlock hidden cost-saving opportunities by bringing expertise to streamline and restructure complex supply chain networks.

Here’s how a supply chain consultant evaluates logistics costs and helps uncover potential savings across your network:

Understanding a Typical Consumer Product Supply Chain Network

A typical supply chain for a consumer product business consists of:

1. Manufacturers who produce the goods.
2. 3PL Partners who manage B2B and e-commerce fulfillment, often with different partners for each type.
   • E-commerce 3PL: Manages individual order fulfillment, often working with parcel shipping providers like FedEx, DHL, UPS, and USPS.
   • B2B 3PL: Manages bulk orders to retailers such as Amazon and Walmart.

Each 3PL receives products from the manufacturer, stores them, and ships them to end customers. The cost of maintaining this network depends heavily on factors like location, freight rates, and the efficiency of operations. Often, companies lack internal resources to audit these costs or dive into the nuances of logistics—making them ripe for costly inefficiencies. assessing and adjusting this network’s configuration can further optimize logistics costs with a supply chain consultant who identifies the ideal locations to keep freight and operating costs at optimal levels.

Key Areas of Cost Savings in Supply Chain Consulting

1. Strategic Distribution Point Positioning

Freight costs are one of the most substantial expenses in a supply chain network. Consultants analyze the distances between your 3PL partners, manufacturers, and end customers. If your distribution points aren’t optimally positioned, transport costs increase due to longer shipping distances, frequent inter-warehouse transfers, and unplanned inventory moves. An expert can quickly spot if your locations are causing unnecessary freight expenses and recommend adjustments that minimize distances and fuel costs.

2. 3PL and Parcel Freight Cost Analysis

For e-commerce orders, your 3PL partner is likely charging fees for both fulfillment and parcel freight costs. These costs often pass through the 3PL to shipping providers (like FedEx and UPS), with the 3PL adding its own margin. Without a mechanism to track overcharges or identify freight inefficiencies, costs can spiral. A consultant performs a detailed review of invoices, spot-checks for overcharges, and negotiates more favorable terms. By benchmarking these expenses, they ensure you’re paying fair market rates and not footing the bill for avoidable expenses.

3. Inventory Positioning to Reduce Fulfillment Costs

When 3PLs lack clear visibility into inventory across distribution centers, they may fulfill orders from more distant locations, driving up shipping costs. An expert evaluates inventory placement and recommends repositioning to reduce these fulfillment costs. They analyze which products should be stored where based on order patterns, demand, and transport costs, ensuring that every shipment goes out from the most cost-effective location.

4. Detailed Logistics Benchmarking

One of the first steps in reducing costs is comparing your logistics costs and practices against industry standards or top-performing companies. By evaluating your current expenses relative to your competitors, a consultant identifies areas where costs are high and savings are achievable. This benchmarking process relies on comprehensive data analysis, including invoices, contracts, product specs, and historical sales patterns. Companies often see a 4-6% reduction in logistics expenses, saving millions annually. Partnering to optimize logistics costs with a supply chain consultant not only saves on logistics but also yields higher profits by spending wisely.

5. Building a Lower-Cost Operating Model

Once a consultant identifies cost-saving opportunities, they help you transition to a lower-cost operating model. This might involve:

• Consolidating distribution points to reduce freight costs.
• Switching from in-house to 3PL fulfillment or vice versa based on the needs of your business.
• Changing 3PL providers to one that better aligns with your specific business requirements.

These adjustments can significantly cut costs while maintaining or even improving service levels. Consultants also factor in projected sales growth to ensure the operating model remains effective over time. Each step is strategically prioritized to target “quick wins” or high-impact areas first, driving savings with minimal disruption to the business.

6. Optimizing 3PL Rate Structures for B2B and E-commerce Fulfillment

As companies scale, 3PL expenses for e-commerce fulfillment can increase dramatically—especially if rate structures aren’t aligned with specific business needs. For instance, if a company frequently runs marketing campaigns involving kitting or specialized promotions, labor-intensive fees from 3PL partners can add up. A consultant evaluates your 3PL agreements and rate structures, factoring in the unique demands of your operations, then recommends rate adjustments or new providers as needed.

RFPs and Scorecard Analysis to Select Optimal 3PL Partners

A supply chain consultant optimizes logistics costs by aligning 3PL pricing structures with business needs, negotiating rate cards, and selecting the best 3PL partners to support cost-effective growth. When new 3PL partnerships are needed, consultants take charge of the entire selection process. They design tailored RFPs (requests for proposals) and distribute them to vetted 3PL providers. With scorecard analyses of each bid, they identify the provider that offers the best fit in terms of costs, capabilities, and alignment with your business model. This approach helps companies select partners that minimize fulfillment and freight costs while meeting performance standards.

Why Work with a Logistics Consultant?

Logistics consultants bring expertise and fresh perspectives that can lead to substantial savings—typically far exceeding the costs of hiring a consultant. They pinpoint inefficiencies that internal teams might miss, guide data-driven decisions, and offer recommendations that lead to long-term cost savings. For many businesses, working with a consultant proves more cost-effective than expanding internal sales and operations teams.

Realizing Long-Term Savings and Sustainable Growth

Once a supply chain consultant lays out a roadmap, they can help execute each transition smoothly. This often involves coordinating with your logistics team to re-position inventory, renegotiate contracts, or shift 3PL partnerships. By taking a holistic view of your supply chain, they craft a model that not only delivers immediate savings but also positions your business for sustainable, scalable growth.

By partnering with a supply chain consultant, you’re investing in a streamlined, cost-effective logistics network that supports your growth objectives. From freight cost reduction and optimized 3PL partnerships to network design and inventory placement, the impact on your bottom line is undeniable. If you’re ready to uncover hidden costs in your supply chain, a logistics consultant could be your key to multimillion-dollar savings.