Parcel delivery consultancy Shipware LLC announced on Wednesday that it has merged with SIB Fixed Cost Reduction, a company that provides expense 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, leadership and employees. Rob Martinez and Trevor Outman, co-CEOs of Shipware, will stay. Shipware plans to hire 15 employees in the first quarter, bringing its workforce to 81, Martinez said in an email on Wednesday.
Based in Charleston, South Carolina, SIB aims to help businesses lower their fixed costs by providing invoice analysis, supplier management, and cost tracking in expense categories such as telecommunications, shipping, logistics, utilities and waste management. Shipware operates with a narrower industry approach than SIB. However, both companies provide similar types of services and are paid based on the cost savings they generate for their clients.
One of the benefits of the merger for Shipware customers is that they can leverage SIB’s tools to more effectively manage their own range of fixed costs beyond shipping packages, Martinez said. The two companies offer “guaranteed cost reduction solutions to hundreds of customers,” he said in the email.
The ultimate goal of the suit is to support customers throughout the supply chain lifecycle, from sourcing to accounts payable, Martinez said.
Parcel consultants check invoices to determine if carriers are meeting their contractual commitments, analyze invoices to identify billing errors, and help shippers get the most out of their contracts, among other functions. Consultants and their clients will often share cost recovery amounts equally. However, consultants may agree to take a smaller slice of the total pie if client volumes and potential savings are greater than normal.
Most parcel consultants come from the carrier world, where they have learned the skills that have made them valuable to shippers. Demand for their services has increased over the past decade as the growth of e-commerce has placed parcel deliveries at the center of the concerns of senders and recipients.
That demand has increased again in the past 20 months as the COVID-19 pandemic has triggered an unprecedented increase in package deliveries, and FedEx Corp. (NYSE: FDX) and UPS Inc. (NYSE: UPS) operating in the premier seller market for parcel delivery services. in nearly 25 years, has adopted new lines and, in many cases, tougher lines on their larger customers.
Shipware’s roots go back to 2001, when Martinez, an executive with the former Airborne Express, started his own consulting firm. In 2005, Outman founded Shipware Systems Corp. In 2011, after two years of partnership, Martinez and Outman formed what is now Shipware.
SIB is owned by O2 Ventures, a private equity firm based in Bloomfield Hills, Michigan.