With nearly 50 supply chain facilities and 2,000 stores across the United States, a Fortune 50 general retailer continuously sought ways to optimize and innovate their freight operations across vendor to distribution center routes. Avoiding out-of-stock scenarios was business critical. Enter Convoy’s dynamic freight pricing program, Guaranteed Primary, which provides shippers with reliable, fairly priced, and high-quality service. Learn how this Fortune 50 Retailer’s pilot with Guaranteed Primary led to an estimated $1.6 million in savings and 100% tender acceptance.
The difficulties of spiking shipment volume
As demand for freight spiked in 2021, operations teams found themselves facing waves of canceled shipments. Goods were flying off shelves, including consumer favorites that were high-visibility and high-volume. Many carriers were unable to fulfill spiking volumes well above committed contract volumes. Increased volume hit the spot market as a result. Underperforming lanes remained business critical, but drove up operating costs, and reliable capacity was needed to support peak retail seasons.
Guaranteed Primary to the rescue
Convoy was already delivering 100% of contracted volume with this retailer. When spikes in volume required even more flexible and reliable capacity, the retailer chose to pilot Guaranteed Primary.
During the pilot, Convoy guaranteed 100% tender acceptance at a fixed 10% margin across 7 out of 26 existing primary lanes. These lanes were experiencing high volume spikes and load cancellations/ tender rejections. Estimated savings through Guaranteed Primary rates were estimated at $1.6 million when compared to standard RFP contract rates at the time.
From headache-inducing to high-performing tender acceptance
Within three months, Convoy was able to improve total primary tender acceptance by 88% on the seven lanes chosen for the pilot. While tender rejections increased 105% the month prior to the pilot, the Guaranteed Primary program delivered on its 100% tender acceptance promise, leading to zero spot loads.
High-quality service was also table stakes for Convoy. On-Time-Delivery (OTD) was executed 3% higher than overall primary and 4% higher than overall spot.
Lane expansion, on the horizon
Recognizing the value Guaranteed Primary provides in delivering guaranteed coverage, this retailer continues enrolling additional lanes in the program. Shipment volume grew from 166 to 1,193 from February 2022 to March 2022 alone.
With Convoy, the retailer also gains transparency into shipment costs and is able to take advantage of rates in-tune with the market. Convoy was the first freight provider to offer cost savings to the retailer in 2022 due to seasonality and as signs of market softening emerged.
“[Convoy] was the first carrier to lower rates for us in 2022. This kind of partnership is a game changer for the long run.” —Transportation Director, Fortune 50 Retailer
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