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Strategic purchasing advice forCB Imports in a volatile market

CLIENT CB Imports

SECTOR Importer

COST CATEGORIES International Freight

Import Freight is a hugely significant area of expenditure for us. Expense Reduction Analysts proved their worth by saving us over £120,000 in their first 18-month engagement, and continue to deliver vital strategic advice. This is an ongoing service that is especially important at a time of such volatility in international freight costs.Steve Wood, Managing Director, CB Imports

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Inspirational and innovative, CB Imports are the leading importer of floral sundries, giftware, glassware, silk flowers, pottery, homewares, and Christmas and seasonal products. The company prides itself on providing the latest trends, designs and ideas to volume buyers through extensive collections and literally thousands of product lines. Furthermore, their ranges of artificial flowers, pottery and glassware are the UK’s largest.

Expense Reduction Analysts’ Client Manager Neil Cullen brought in Expense Reduction Analysts’ International Freight expert John Shaw, saving the company £123,451 on Import Freight in the first 18-month period of engagement. With the ImportFreight industry being highly volatile, Steve Wood,Managing Director of CB Imports, asked John Shaw ofExpense Reduction Analysts to continue to work withthem on this area. Expense Reduction Analysts havenow been providing this service to CB Imports for overfour years.

“The whole seafreight industry has been more volatile in the last four years than I have seen it in the previous thirty”

John Shaw explains the background to his comment: “For the last four years or so, contrasting commercial elements have been in force. The shipping lines have increased capacity by bringing larger and larger vessels into service – these are ships that they ordered some years ago – but at the same time world trade has slumped and international freight volumes have gone through the floor.

“With such an imbalance between supply and demand the whole industry has become chaotic, as lines attempt to balance volume and traffic. The lines try to force rates up with varying degrees of success but market forces prevail, usually with one of the lines giving way, others following and the rates starting to dive again. For a company like CB Imports, this means

that there are large amounts of money to be gained or lost, depending on whether the correct freight buying decisions can be made. Having a strategic view of what is happening in the short, medium and long term is vital to their bottom line.”

Steve Wood is therefore only too glad of John’s freight expertise: “John keeps an eye on our freight rates and compares them to those he sees in the market, just to confirm that we are getting best value for money. This is not as straightforward as it sounds, because ancillary charges can make all the difference. It is the end-to-end cost that is important, not the headline rate that we are paying for the seafreight element of the journey.

CASE STUDY

“The difference between buying well and buying poorly can easily run into six figures”

“In addition, from time to time, we receive unsolicited offers on freight that appear to offer market-beatingrates. I always ask John to take a forensic look at these.I have to say, nine times out of ten, they are too goodto be true. A vital service element may be missing;there may be currency or payment terms issues. Wetrust John to give us the bottom line.”

However, the ongoing Expense Reduction Analysts service that CB Imports value most is their strategic view of the market, an analysis of what will happen in the future which enables CB Imports to plan their Import Freight buying with intelligence and confidence.

Steve Wood summarises the value of this service:

John is quite simply our expert on international freight. This is a crucial area of expenditure for our business – the difference between buying well and buying poorly can easily run into six figures – and we do not take a major decision on our international freight without consulting or referring to John’s knowledge.

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