Cost-Conscious CPG Company Finds 300%+ Storage Savings with Flexe Logistics Programs

The Challenge #

CPG manufacturers seek every opportunity to maximize profitability and reduce costs. They need to preserve working capital and minimize margin loss. One area of cost optimization: CPG supply chains.

Macroeconomic uncertainty, as well as record tight warehousing capacity, means many CPG brands are reevaluating how they invest most efficiently and effectively in their supply chains—from warehouses to store shelves.

The Opportunity #

One national CPG manufacturer sought a cost effective way to distribute its commodity products to retail partners. All without spending more than necessary in a tight warehousing market.

The company’s peak sales occurred seasonally, and they built inventory ahead of peak to then distribute the maximum amount of products in-season. Seasonal rushes depleted inventories, leaving warehouses nearly empty for the rest of the year. Unused warehouse space means underutilized logistics investments.

The company needed a new warehousing solution. One that supported:

• Raw material imports and staging for manufacturing state-side

• Distribution to downstream retail partners

• Strategic warehousing capacity for the seasonal component of its business

• Dynamic capacity amid unexpected disruptions and demand spikes
  

Traditional supply chain solutions require upfront capital expenditures and long leases for a set square footage, regardless of warehouse utilization throughout the year. The company did not want to pay for costly unused space in a historically tight warehousing market.

The manufacturer needed a flexible solution to reduce warehousing costs dynamically when they no longer required space for peak inventories. They also sought optional distribution nodes to expand space geographically when needed.

The Solution #

The CPG company partnered with Flexe to dynamically expand and contract warehouse capacity from production staging to store distribution with Flexe Logistics Programs.

With Flexe, the company:

• Scaled capacity based on the cyclical, seasonal nature of its products

• Paid only for capacity used, where traditional solutions charge for forecasted but unused space

• Launched across multiple markets with a repeatable roadmap

• Retained highly competitive warehouse pricing without long-term leases

Results
#

With Flexe, the CPG brand realizes key cost savings through the Flexe Cyclical Capacity Program. They pay lower-than-market rates amid record low industrial capacity. Flexe negotiated highly competitive rates, with facilities in the Southeast offering rates 55% lower than the market average.

Importantly, with Flexe Logistics Programs, the company saves millions via a variable cost model—only paying for capacity used during seasonal peaks. Flexe’s variable cost model saves the company over 300%+ in storage costs.

Impact #

The company saves millions via a variable cost model—only paying for capacity used during seasonal peaks. Flexe’s variable cost model saves the company over 300%+ in storage costs.

You might also be interested in: #

• Video: Aterian Uses Flexe Logistics Programs to Achieve 97% Two-Day or Less Delivery Speeds

• Article: Flexe Institute Market Watch: M&A Activity Increasing Across Industries

• Article: Boost Supply Chain Cost Savings. Invest in Structural Supply Chain Flexibility