FedEx Services Drive Cost Savings for Furniture Retailer

Client BackgroundA large online furniture retailer with heavy, oversized products struggled with exorbitant shipping fees. Their average package weight exceeded 100 lbs, resulting in high surcharges from previous carriers. The company also needed to streamline multi-piece shipments for customers purchasing entire furniture sets.

Challenges

1. Oversized Packages: High costs for shipping bulky items, averaging $85/package.
2. Multi-Piece Management: Difficulty coordinating delivery of multiple items within a single order.
3. Residential Deliveries: Significant residential surcharges eating into profit margins.

SolutionThe logistics provider implemented a FedEx-based strategy:

• FedEx Ground Discounts: Secured up to 85% off additional fees for oversized packages, reducing average shipping costs to $45/package.
• FedEx MTW: Utilized Multi-Piece Shipment Under a Single Order service, ensuring all items in an order arrived simultaneously.
• SmartPost for Light Items: Shifted smaller accessories (under 10 lbs) to FedEx SmartPost, eliminating residential surcharges.

Results

• Cost Reduction: Achieved annual shipping savings of $1.2 million, increasing profit margins by 12%.
• Customer Experience: Improved order fulfillment rate for multi-piece shipments from 65% to 98%.
• Operational Simplification: Automated 90% of shipping processes through API integration, reducing manual errors by 80%.