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LogisticsUnreviewed spend

~$16,000/yr

3PL and trucking operator

Logistics · Two states

Two operating companies, one review. The largest indirect cost was labor overhead, not fuel. A national PEO at the same service level cut workers' comp and benefits administration 20%. Two of five categories were already priced right and left alone.

Footprint
Two operating entities
Contacts
Ownership
Upfront
$0
Relationship
2015 engagement

01

The problem

For this trucking operator the biggest indirect cost was labor overhead, not fuel. The PEO covering payroll, benefits, and workers' comp for a driver-heavy workforce across two states was priced well above a national PEO at the same service level.

02

What we looked at

  • PEO, payroll, benefits, and workers' comp
  • Merchant processing
  • Waste removal
  • Office supplies
  • Health insurance

03

What changed

  • Moved to a national PEO at the same service level.
  • Merchant processing was repriced to interchange-plus.
  • Office supplies were rebid to a competing supplier.
  • Waste removal and health insurance came back already competitive and stayed with the incumbents.

04

The numbers

PEO and workers' comp
20% savings

Moved to a national PEO at the same service level

Merchant processing
25% savings

Repriced to interchange-plus

Office supplies
17% savings

Rebid to a competing supplier

Waste removal
No change

Already competitive; kept the incumbent

Health insurance
No change

Already competitive; kept the incumbent

Total recurring
$16,000/yr
Blended reduction
21%
5-year value after fees
$64,000
Categories left unchanged
2 of 5

05

Why it worked

  1. 01

    PEO was the largest lever

    Workers' comp and benefits administration cost more than most back-office categories combined, so a 20% cut moved the needle further than anything else in the audit.

  2. 02

    No savings were manufactured

    Two categories were confirmed competitive and left untouched, which made the recommendations that did come back easy to trust.

  3. 03

    Two entities, one review

    Auditing both operating companies together meant the PEO negotiation carried the weight of the combined workforce.

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