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.
~$16,000/yr recurring
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% savingsMoved to a national PEO at the same service level
- Merchant processing
- 25% savingsRepriced to interchange-plus
- Office supplies
- 17% savingsRebid to a competing supplier
- Waste removal
- No changeAlready competitive; kept the incumbent
- Health insurance
- No changeAlready 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
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.
02
No savings were manufactured
Two categories were confirmed competitive and left untouched, which made the recommendations that did come back easy to trust.
03
Two entities, one review
Auditing both operating companies together meant the PEO negotiation carried the weight of the combined workforce.
- Footprint
- Two operating entities
- Contacts
- Ownership
- Upfront
- $0
- Relationship
- 2015 engagement
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