Opportunities in Supply Chain Consolidation

By Kenneth Moyer, CSCO, LJM

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Supply chain consolidation is no longer just an operational exercise. For many organizations, it has become one of the most effective ways to reduce cost, improve service performance, and create long-term strategic advantage.

At LJM, we have worked with companies navigating mergers, acquisitions, and network integrations where parcel shipping quickly becomes one of the most complex and least forgiving cost categories. When consolidation is handled intentionally, shipping can shift from a hidden liability into an early source of measurable value.

Below are three of the most common and impactful opportunities we see when supply chains merge.

Contract Consolidation

Dramatic and rapid savings can often be achieved by consolidating parcel spend across newly combined organizations and leveraging that unified volume to secure more market-favorable carrier discount programs. In many cases, these savings can be realized within 60 to 90 days and require little to no operational change. For most companies undergoing supply chain consolidation, this represents the largest and fastest cost-reduction opportunity.

Beyond immediate savings, consolidated contracts reduce overlapping carrier commitments, simplify compliance requirements, and create clearer accountability across the network. This allows leadership teams to stabilize parcel costs early in the integration process while longer-term operational changes are evaluated.

Optimized Facilities and Locations

When supply chains merge, the combined organization often gains access to a broader and more flexible network of inventory sourcing and fulfillment locations. By introducing new ship points into the existing distribution footprint, companies can materially improve both time in transit and cost per package.

These improvements benefit direct-to-consumer shipping as well as store replenishment and intercompany transfers. Shorter zones, fewer air shipments, and better alignment between inventory placement and customer demand can reduce transportation costs while simultaneously improving delivery performance. In many integrations, these gains are unlocked by using assets that already exist but were previously managed in silos.

Expanded Expertise

Supply chain consolidation also brings together logistics and transportation teams with different operating histories, carrier relationships, and problem-solving approaches. When these teams are intentionally integrated, organizations benefit from shared institutional knowledge and fresh perspectives on longstanding challenges.

In practice, issues that persist in one business unit are often problems that another unit has already solved. Creating a forum for that knowledge transfer can lead to meaningful improvements in carrier strategy, packaging standards, network design, and compliance processes. Over time, this shared expertise becomes a competitive advantage that extends beyond cost savings alone.

Industry Experience

LJM has supported supply chain consolidation initiatives across a wide range of industries where parcel shipping plays a critical role in customer experience, margin protection, and operational efficiency. These include:

• Healthcare and regulated services
• Fashion, apparel, and footwear
• Specialty consumer goods
• Home décor and large household items
• Third-party logistics providers (3PLs)
• Lighting and fixture manufacturers and distributors
• Computing, electronics, and high-value technology products

Across these sectors, consolidation introduces complexity around carrier contracts, service levels, compliance, and cost allocation. The common thread is the need to align parcel strategy early in the integration process to avoid margin erosion and operational disruption.

Closing Perspective

Supply chain consolidation creates a narrow window where organizations can reset legacy cost structures, rethink fulfillment strategy, and establish stronger negotiating positions with carriers. Companies that act early tend to capture savings quickly and reduce risk as integration complexity increases.

Those that delay often inherit higher costs, fragmented contracts, and operational inefficiencies that become harder to unwind over time. In today’s parcel environment, disciplined execution during consolidation is no longer optional. It is a competitive necessity.