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    SHIPPING BEST PRACTICES

    World’s Best Guitar Store Negotiates Better Parcel Shipping Contracts

    cme-guitar

    Chicago Music Exchange

    For over 25 years, Chicago Music Exchange has been serving musicians and collectors as a premier authority on vintage, new, and used music equipment. CME sends more than 140,000 packages each year, from bubble envelope mailers, to guitars and amps, to customers across the country and around the world. In the first year alone, VeriShip Contract Engineering analysis and advisory services have helped CME save more than $350,000 in shipping fees and positioned the company for even more savings in the future.

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    Musicians take their gear seriously. Very seriously.

    And when it comes to making great music, they need straight answers, first-hand knowledge, and the best products – delivered fast. Whether it’s a vintage Gibson Les Paul gold top guitar, new Gretsch drum kit, or a favorite accessory, the Chicago Music Exchange (CME) team – all of whom are musicians – has its customers covered. CME serves tens of thousands each year through its traditional storefront in Chicago’s famous Lincoln Park neighborhood and, online at ChicagoMusicExchange.com where musicians can browse a comprehensive collection of guitars, drums, synthesizers, amps, and accessories. Brian Robertson leads the shipping department at CME where he and his staffsend out 500 to 1,000 packages each day. VeriShip is CME’s audit partner for UPS.

    Robertson said he’s been happy with the VeriShip service and savings through its Parcel Audit solution, but he challenged them about a year ago to help him find new ways to better control and reduce unnecessary shipping expenses. VeriShip stepped up with its Contract Engineering service.

    “When you’re spending $1.5 million on shipping each year, there’s always an opportunity to spend smarter or spend less and I asked VeriShip to help us figure that out,” Robertson
    said. “They mined every line of shipping data, reviewed every service term in our contracts, and came back with recommendations for six figure savings. It seemed too good to be true at first, but it wasn’t. And it’s only gotten better since then.”

    In the first year alone, we’ve saved more than $350,000 in avoidable shipping costs that we would have never known about if it wasn’t for VeriShip. Now we know what to look for and how to set ourselves up for success and minimize the impact of the General Rate Increase each year.

    BRIAN ROBERTSON | Shipping and Receiving Team Leader

    Action: The Deep Tracks of Shipping Data

    Robertson said the Contract Engineering contract analysis and advisory engagement with VeriShip started with one simple question: How well do you really know and understand your shipping agreements? The answer was “not very.” Which is not unusual for most shippers.

    “VeriShip started by looking for odd patterns of charges and surcharges, geographical concentrations, transit times, and service levels,” Robertson said. “They found some things that looked weird and that’s what got us started. We had no idea at CME what to look for, or how much it could save us, until VeriShip investigated and quantifi ed the possibilities for us.”

    Air and ground shipping transit times were analyzed. Package dimensions were calculated. The data points were compared to the contract terms. “Once we could see the whole picture more clearly, VeriShip gave us their findings and recommendations and showed us step-by step what to ask for and how to ask for it,” Robertson said. “They gave us negotiation tips, including language and phrasing, that allowed us to have productive conversations with our shippers and get better rates where they matter the most for our business.”

    Gaining an Edge in Parcel Carrier Contract Negotiations

    1. CME ships 140,000 parcels each year but was spending unnecessarily on 2nd day air and dimension surcharges.
    2. VeriShip Contract Engineering analyses and advisory services provided pinpoint recommendations for getting more favorable rates and terms from UPS and USPS.
    3. VeriShip Contract Engineering has delivered more than $350,000 in savings and better prepared CME to negotiate future General Rate Increases

    Outcomes: Negotiating – And Saving – Like a Pro

    Robertson said VeriShip Contract Engineering has not only enabled contract savings in the near term but has also prepared CME for General Rate Increases in the future.

    “In the first year alone, we’ve saved more than $350,000 in avoidable shipping costs that we would have never known about if it wasn’t for VeriShip,” Robertson said. “Now we know what to look for and how to set ourselves up for success and minimize the impact of the General Rate Increase each year.” The VeriShip Contract Engineering service agreement covers GRI modeling, as well. VeriShip plugs CME shipping data into a GRI impact algorithm that highlights the biggest expense drivers. The process also compares CME shipping data and expenses to industry-wide benchmarks that give realistic guidance on terms that should be negotiated, and what to expect in return.

    “VeriShip has been an excellent business partner for us,” Robertson said. “They’ve learned our business and personalized
    their services to meet our unique needs, plus we’ve developed relationships with them that make it feel like they’re an extension of our team. This is how successful business partnerships are supposed to work, and we’ve got the financial results to prove it, too.”

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