The Opportunity
A multi-billion dollar private equity firm has a diverse portfolio of companies that ships almost $600 million through parcel, truckload and intermodal services. The firm was interested in leveraging the total transportation spend across the participating brands to drive additional cost savings. With such a diverse group of participating portfolio companies, the individual needs of each entity had to be balanced and carefully managed. Due to the large number of holding companies and carriers involved, significant data needed to be analyzed. In addition, the parent company’s own needs and corporate cultures needed to be addressed while the participating portfolio companies were largely concerned with maintaining operational positioning and optimizing the cost reduction for their own entity.
The company engaged enVista for Contract Analysis and Negotiation services to address its diverse modal needs. As part of the new agreements, the equity firm required updated routing assignments and maintained carrier service levels. enVista’s close attention to detail, diligent project management, and open, frequent communication throughout this process saved the company over $10 million annually.
The Benefit of Engaging with a Third-Party Service
When portfolio companies’ shipping metrics are divergent, as they often are in private equity and venture capital engagements, developing a negotiation strategy that meets the needs of individual companies is critical. Since companies’ cost drivers differ, a single strategy is not always the optimal solution. enVista’s ability to provide the necessary data analytics to evaluate the validity of a single- or multi-prong strategy led to superior contract analysis and negotiation results.
In addition, when equity firms with multiple operational companies are involved in a negotiation, an expert and objective third-party can better manage the process and streamline communication between the equity firm and the carriers. Using enVista as this third-party also meant that each individual operating company’s shipping data and information remained confidential. With enVista acting as a facilitator, each group could individually and confidentially identify their distinct operational issues.
The Result
Multiple operating company engagements are challenging by nature. The number of stakeholders involved, as well as divergent shipping models and corporate goals makes a project of this nature especially complex. enVista expertly developed a strategy that met the individual needs of the participating operating companies as well as achieving the objectives of the parent entity.
Improvements were made to the agreements for all modes, providing the client with extra protection from rate increases, improved adherence to best practices, and better insurance and indemnification terms. The truckload and intermodal participants also significantly reduced the number of total carriers through enVista’s selection process. In addition to analyzing the client’s freight transportation, enVista also negotiated new parcel agreements.
Deploying a proven analysis methodology, enVista successfully exceeded the project goal to reduce overall cost without negatively impacting service. In total, enVista saved the client more than $10 million in annual shipping costs. Dozens of project deliverables included a pro-forma truckload agreement, the final negotiated agreements, shipper-specific parcel, truckload, and intermodal analyses, and final negotiated rate sheets.
For more information on enVista’s Transportation Spend Management solutions, please call 877-684-7700 or contact info@envistacorp.com.
A multi-billion dollar private equity firm has a diverse portfolio of companies that ships almost $600 million through parcel, truckload and intermodal services. The firm was interested in leveraging the total transportation spend across the participating brands to drive additional cost savings. With such a diverse group of participating portfolio companies, the individual needs of each entity had to be balanced and carefully managed. Due to the large number of holding companies and carriers involved, significant data needed to be analyzed. In addition, the parent company’s own needs and corporate cultures needed to be addressed while the participating portfolio companies were largely concerned with maintaining operational positioning and optimizing the cost reduction for their own entity.
The company engaged enVista for Contract Analysis and Negotiation services to address its diverse modal needs. As part of the new agreements, the equity firm required updated routing assignments and maintained carrier service levels. enVista’s close attention to detail, diligent project management, and open, frequent communication throughout this process saved the company over $10 million annually.
The Benefit of Engaging with a Third-Party Service
When portfolio companies’ shipping metrics are divergent, as they often are in private equity and venture capital engagements, developing a negotiation strategy that meets the needs of individual companies is critical. Since companies’ cost drivers differ, a single strategy is not always the optimal solution. enVista’s ability to provide the necessary data analytics to evaluate the validity of a single- or multi-prong strategy led to superior contract analysis and negotiation results.
In addition, when equity firms with multiple operational companies are involved in a negotiation, an expert and objective third-party can better manage the process and streamline communication between the equity firm and the carriers. Using enVista as this third-party also meant that each individual operating company’s shipping data and information remained confidential. With enVista acting as a facilitator, each group could individually and confidentially identify their distinct operational issues.
The Result
Multiple operating company engagements are challenging by nature. The number of stakeholders involved, as well as divergent shipping models and corporate goals makes a project of this nature especially complex. enVista expertly developed a strategy that met the individual needs of the participating operating companies as well as achieving the objectives of the parent entity.
Improvements were made to the agreements for all modes, providing the client with extra protection from rate increases, improved adherence to best practices, and better insurance and indemnification terms. The truckload and intermodal participants also significantly reduced the number of total carriers through enVista’s selection process. In addition to analyzing the client’s freight transportation, enVista also negotiated new parcel agreements.
Deploying a proven analysis methodology, enVista successfully exceeded the project goal to reduce overall cost without negatively impacting service. In total, enVista saved the client more than $10 million in annual shipping costs. Dozens of project deliverables included a pro-forma truckload agreement, the final negotiated agreements, shipper-specific parcel, truckload, and intermodal analyses, and final negotiated rate sheets.
For more information on enVista’s Transportation Spend Management solutions, please call 877-684-7700 or contact info@envistacorp.com.
