Parcel delivery consultancy Shipware LLC said Wednesday it has merged with SIB Fixed Cost Reduction, a company that provides spend management services across a wide range of industries. Financial terms of the transaction were not disclosed.
San Diego-based Shipware said it will retain its brand, management and employees. Rob Martinez and Trevor Outman, Shipware’s co-CEOs, will stay on. Shipware plans to hire 15 employees during the first quarter, bringing its headcount to 81, Martinez said in an email Wednesday.
Based in Charleston, South Carolina, SIB aims to help companies reduce their fixed costs by providing invoice analysis, vendor management and cost monitoring across expense categories like telecom, shipping, logistics, utilities and waste management. Shipware operates with a more narrow industry focus than SIB. However, both firms provide similar types of services and are paid based on the cost savings they generate for their customers.
One of the merger’s benefits for Shipware clients is they can leverage SIB’s tools to more cost effectively manage their own array of fixed costs beyond parcel shipping, Martinez said. Both companies offer “guaranteed cost-reduction solutions to hundreds of customers,” he said in the email.
The ultimate goal of the combination is to support clients through the supply chain life cycle from procurement to accounts payable, Martinez said.
Parcel consultants audit bills to determine if carriers are living up to their contractual commitments, analyze invoices to identify billing errors and help shippers get maximum benefit out of their contracts, among other functions. Consultants and their clients will often split the cost-recovery sums equally. However, consultants may agree to take a smaller share of the total pie if the client’s volumes and the potential savings are larger than normal.
Most parcel consultants come from the carrier world, where they acquired the skill sets that have made them valuable to shippers. Demand for their services has increased over the past decade as e-commerce growth put parcel deliveries front and center among shippers and consignees.
That demand spiked anew over the past 20 months as the COVID-19 pandemic triggered unprecedented surges in parcel deliveries, and FedEx Corp. (NYSE: FDX) and UPS Inc. (NYSE: UPS) operating in the first seller’s market for parcel delivery services in nearly 25 years, adopted new and, in many cases, harder lines toward their largest customers.
Shipware’s roots date to 2001 when Martinez, an executive with the old Airborne Express, launched his own consultancy. In 2005, Outman founded Shipware Systems Corp. In 2011, after two years of partnership, Martinez and Outman formed what is today the current Shipware.
SIB is owned by O2 Ventures, a private equity firm based in Bloomfield Hills, Michigan.
