KEP – Package Express Courier

KEP - Package Express Courier

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target group	Basic statement	cost relevance
Mail order companies, manufacturing industry	Service and delivery reliability have the same importance in optimization as the price of the provider. A consistent volume bundling with a tender for the services brings high cost effects.	Although the savings potential is lower than in other areas, CEP optimization also goes hand in hand with an increased understanding of specification optimization and other process improvements.

In this special case, in addition to the price-performance ratio, the focus should be on the pick-up times, the structure of the customers supplied, the returns management!!, the types of delivery, the delivery regions and countries and the shipment structures.

These are set in relation to the actual delivery volume. Even if it is tedious, a detailed list of the individual shipments gives a very good overview of the structure and the services required.

With this overview, negotiations can be started or an invitation to tender can be made. In any case, volume bundling is advisable for CEP services, which leads to standardization and thus economies of scale.

A preferred supplier strategy with just a few providers is particularly suitable here, because this also intercepts special shipments or different requirements and at the same time the suppliers enter into advantageous competition with one another.

Checklist Courier Express Parcel

Precise recording of your own delivery structure
market observation
Economies of scale through volume concentration
Economies of scale by bundling the supplier structure
Contractually record volume discounts and bonus scales

case studies

A furniture manufacturer paid around 140,000 euros a year to two CEP providers, with one responsible for standard and one for express deliveries. The main expenses were accounted for by standard shipping. In a tender, the company decided against changing providers and was still able to save more than 50 percent, with incorrectly issued invoices being revised by the providers and now being continuously checked.
A production company operating throughout Europe paid a large sum for this. After the call for tenders, it also became apparent here that a change of supplier was not desired and, from an analytical point of view, not recommended either. Thanks to improved conditions with existing suppliers, the manufacturer was able to save more than 12 percent
A testing institute with several locations and annual sales of more than one billion euros had previously commissioned more than 12 service providers. The biggest expense was express shipments. The costs amounted to a mid-six-digit amount. Various service providers at the locations were contacted and an invitation to tender was drawn up. The key point was the inclusion of shipping insurance. In the end, the institute opted for an optimized express area and a relative concentration of providers, which led to savings of almost 19 percent.
A manufacturer of dietary supplements had annual CEP costs in the six-figure range and worked with a service provider. He was entrusted with all services along the logistics chain. For the company, this variety of services, physical proximity, easy communication and daily shipping were of crucial importance in the tender. Added to this were good price conditions and simple returns management. Potential service providers were inspected on site prior to the call for tenders. Especially the prices differed enormously. Despite the alternatives, the company chose the incumbent provider at a 10 percent cost reduction.
A mail order company had annual CEP expenses of almost one million euros. These were divided between two service providers for standard shipping to customers and for bulky goods. The analysis of the offers showed that the required conditions (daily, fast delivery, cash on delivery, tracking, flexible order options, XML interface, etc.) were best met by the providers already in use. Nevertheless, the costs were reduced by almost 13 percent as a result of the tender.