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Warehouse & transport network optimisation: DC strategy, 3PL reviews and transport tendering that deliver real results
A lot of network projects start the same way.
Someone walks you through a warehouse that feels like it’s bursting at the seams. Pallets are parked wherever there’s daylight. Pick paths have turned into obstacle courses. Dock congestion is “just how it is now”. Meanwhile, freight invoices keep climbing, and the customer team is fielding more “where’s my order?” calls than anyone wants to admit.
Then the question lands: Do we need another DC… or do we need a better network?
For Australian and New Zealand organisations—where distances are vast, labour markets are tight, and service expectations are rising—warehouse and transport network optimisation is one of the most reliable ways to unlock cost savings and improve service. Done well, it creates a network that fits today’s volumes and tomorrow’s growth. Done poorly, it becomes a spreadsheet exercise that never survives contact with operations.
This article is a practical playbook for leaders who are searching for:
- DC strategy (where should we hold stock and why?)
- warehouse network optimisation (how many sites, where, and what should each do?)
- 3PL reviews and 3PL tendering (is our provider right, and are we paying the right price?)
- transport tendering and freight optimisation (how do we reset rates and performance without blowing up service?)
And most importantly: how to run the program in a way that protects service levels, avoids disruption, and delivers savings that stick.
Why network optimisation is a high-impact lever right now
Network costs usually creep, then spike.
Warehousing gets more expensive through labour, space, congestion and inefficiency. Transport gets more expensive through fuel, carrier constraints, accessorials, and last-minute expedites. Inventory gets more expensive through buffer stock, split shipments, and “just in case” buying.
When you step back, most symptoms trace back to one underlying issue:
The network no longer matches the business.
That mismatch typically shows up as:
- too many nodes (complexity) or too few nodes (service pain)
- inventory in the wrong places
- transport lanes that don’t reflect where demand actually is
- contracts that were built for yesterday’s profile (store-based, not e-commerce; metro-heavy, not regional; stable volumes, not volatile)
- 3PL arrangements that reward activity rather than outcomes
Network optimisation is where you can align service, cost, and working capital—not by squeezing one lever, but by redesigning how the system works.
The common triggers that tell you it’s time to review your DC and transport network
If you’re seeing any of these, you’re not alone:
1) Warehouses are “full”, but you’re not sure why
- storage is maxed out, but pick faces are inefficient
- slow movers are consuming prime space
- inbound is lumpy, outbound is peaky, and the site can’t cope
2) Freight costs are escalating faster than revenue
- rate increases plus higher accessorials (wait time, redeliveries, tailgate, rural fees)
- lane mismatch (inventory location doesn’t match demand)
- increased expedites due to stockouts or late cut-offs
3) Service levels are slipping
- DIFOT/OTIF issues
- more partial shipments and split orders
- greater customer complaints and retailer chargebacks
4) Growth, channel shift, or range complexity has changed the game
- e-commerce and direct-to-consumer growth
- range expansion and SKU proliferation
- different order profiles (smaller, more frequent, more urgent)
5) A contract decision is looming
- 3PL contract expiry, extension, or underperformance
- warehouse lease expiry or rent escalation
- transport contracts being rolled without a true market test
6) You’re considering automation
Automation can be a great enabler—but it must be designed into the right network. Automating the wrong site, in the wrong place, for the wrong flows is an expensive lesson.
What “good” looks like: outcomes of an effective network optimisation program
A successful network optimisation doesn’t just produce a map. It produces a network that’s operationally viable and commercially defensible:
- Clear DC roles (e.g., national DC, regional forward stock, returns, bulky, temperature-controlled, spare parts)
- Defined service promise and order cut-offs aligned to customer expectations
- Reduced cost-to-serve (warehousing + transport) without degrading delivery performance
- Reduced inventory duplication and better stock availability
- Better carrier performance and visibility through realistic lanes and governance
- 3PL and transport contracts with clear KPIs, pricing mechanics, and escalation paths
- A staged transition plan that keeps the business running
The three truths that make or break DC and transport strategy in ANZ
Truth #1: The cheapest network on paper is rarely the cheapest network in real life
Models love simplification. Operations live in constraints: labour availability, site access, peak demand, industrial relations, safety, and IT limitations. Your “optimal” network must survive those realities.
Truth #2: Transport and warehousing decisions are inseparable
A DC in the “wrong” location can wipe out any labour savings through transport. Similarly, a cheap transport contract can fail if your warehouse dispatch discipline and cut-offs are unrealistic.
Truth #3: Implementation is where savings become real (or disappear)
Tendering is not the finish line. Transition planning, governance, and benefits tracking are where value sticks.
The network optimisation playbook: a step-by-step approach that works
Phase 1: Baseline the current network (2–4 weeks)
Start with a clean view of “what is”:
- sites, roles, capacities, constraints
- volumes by lane (inbound, inter-DC, outbound)
- order profile (lines/order, units/line, cube, peak factors)
- service levels and failure points
- warehousing cost structure (labour, occupancy, MHE, systems, overhead)
- transport cost structure (linehaul, last-mile, accessorials, fuel, minimums)
- inventory positioning and working capital impacts
Key outputs:
- a network map with flows and volumes
- a baseline cost-to-serve view
- service performance baseline (what “good” looks like today, and where it breaks)
Phase 2: Clarify the service promise and constraints (1–2 weeks)
This sounds obvious, but it’s where many projects drift.
You need alignment on:
- delivery lead times (metro vs regional, AU vs NZ, island vs island)
- cut-off times and dispatch discipline
- service tiers by customer segment (not every customer needs the same speed)
- compliance and safety constraints (Chain of Responsibility, site access, fatigue, temperature, dangerous goods, biosecurity where relevant)
- growth scenarios and strategic priorities (cost vs speed vs resilience)
Key output: a set of non-negotiables for modelling and tendering.
Phase 3: Design scenarios (2–3 weeks)
Network optimisation is scenario thinking, not a single answer.
Common scenarios include:
- centralised (fewer DCs, strong linehaul, high efficiency, potentially longer last-mile)
- hybrid (national DC + regional forward stock for speed/peaks)
- decentralised (more nodes for service, higher complexity and duplication risk)
- 3PL vs in-house (and hybrids)
- channel-specific fulfilment (stores/DC/DTC split)
- cross-dock vs stock-holding approaches
Each scenario should quantify:
- warehousing costs (including capacity and peak handling)
- transport costs by lane and service tier
- inventory impacts (duplication, safety stock, working capital)
- service implications (lead times, DIFOT risk)
- operational feasibility (labour, property, systems readiness)
- transition complexity and risk
Key output: 2–4 viable scenarios to take to decision.
Phase 4: Validate with operational reality (1–2 weeks)
This is where you pressure-test assumptions with the people who run the network.
Practical checks include:
- capacity modelling vs actual congestion points (docks, despatch, pick faces)
- labour availability and shift design
- inbound scheduling capability
- returns processing and reverse logistics implications
- cartonisation, pallet standards, and dispatch discipline
- what your WMS/TMS can actually support (and what needs uplift)
Key output: a preferred scenario that operations can stand behind.
Phase 5: Convert strategy into a procurement and transition plan (2–4 weeks)
Here’s the pivot many teams miss: once you choose a network direction, you need an executable plan.
This includes:
- which services to tender first (3PL, linehaul, last-mile, warehousing labour, packaging, etc.)
- lotting strategy (state-based vs national; metro vs regional; temperature vs ambient; bulky vs parcel)
- KPI and reporting design
- transition plan (site cutovers, inventory moves, IT changes, customer comms)
- governance and benefits tracking approach
Key output: a tender-ready procurement roadmap, not just a network diagram.
3PL reviews: how to assess performance before you retender
If you’re searching for “3PL review” or “warehouse outsourcing review”, it usually means one of two things:
- You suspect you’re overpaying, under-served, or both
- You need confidence before committing to an extension, rebid, or transition
A practical 3PL review should cover:
1) Commercial health
- rate card structure and where costs actually accrue
- accessorials and “variation” behaviours
- indexation mechanics and wage pass-through rules
- volume bands and what happens when volumes change
- how claims, damages, and rework are handled commercially
2) Operational performance
- DIFOT/OTIF and order cycle time
- pick accuracy, inbound compliance, stock integrity
- labour productivity and peak management
- dock utilisation and dispatch discipline
- incident and safety performance
3) Capability and fit
- technology (WMS maturity, reporting, integrations)
- process maturity (CI, standard work, escalation cadence)
- culture and leadership stability
- ability to support channel changes (e-com growth, store replenishment changes, new product types)
4) Governance and “ways of working”
Often the contract isn’t the problem; the governance is.
- weekly performance cadence
- who owns root cause fixes
- data and reporting definitions
- issue escalation paths that actually work
The point of a 3PL review isn’t to build a case against the provider.
It’s to establish a fact base so you can decide whether to fix, renegotiate, retender, or redesign.
Transport tendering: how to reset freight cost without torching service
Transport tendering in ANZ can be deceptively tricky. The lane mix is diverse: metro, regional, remote; courier, parcel, pallet; linehaul, last-mile, inter-island; time-definite vs economy. If your data and scope aren’t tight, you’ll get bids you can’t compare—or rates that look good until accessorials show up.
Step 1: Build a clean lane and volume picture
At minimum:
- origin and destination postcodes
- shipment type (parcel, pallet, bulky, temperature-controlled, dangerous goods if relevant)
- weight and cubic volume distributions
- frequency and peak factors
- delivery service tier requirements
Step 2: Fix the service promise before you price it
You need clarity on:
- delivery timeframes by zone
- cut-offs and dispatch windows
- POD requirements
- returns and failed delivery rules
- customer experience expectations
Step 3: Design a pricing schedule that forces comparability
Good tenders separate:
- linehaul vs local delivery
- base rate vs fuel vs accessorials
- waiting time rules
- redelivery rules
- minimums and surcharges
- peak capacity pricing mechanics
Step 4: Evaluate on more than price
For freight, “cheapest” can become “most expensive” quickly if performance drops.
Consider:
- on-time performance history and capacity commitments
- claims process maturity
- visibility and tracking capability
- network coverage and subcontractor control
- safety and compliance posture
Step 5: Negotiate the terms that actually matter
In transport, value often sits in:
- fuel index mechanics
- accessorial definitions
- volume commitments and rate review triggers
- performance regimes (credits, incentives, escalation)
- dispute resolution and claim timelines
Step 6: Plan transition like a project, not a handover
Transport changes fail when:
- customer service isn’t briefed
- dispatch processes don’t change
- labels and manifests aren’t tested
- carriers don’t have onboarding time
- sites keep using old booking methods
A proper transition plan includes:
- cutover approach (phased vs big bang)
- system and label testing
- site training
- operational playbooks
- performance tracking from week one
The biggest mistakes in network optimisation (and how to avoid them)
Mistake 1: Modelling without understanding the warehouse operation
A model might say “one DC is optimal” while the real world says “that DC can’t physically process the peak”.
Fix: build capacity assumptions with operational validation—docks, labour, shift design, congestion, inbound scheduling.
Mistake 2: Treating inventory as an afterthought
Network changes alter safety stock, lead times, and availability. Ignoring inventory can turn savings into service failures.
Fix: include inventory impacts in every scenario—duplication, replenishment cadence, and working capital.
Mistake 3: Choosing sites based on rent alone
Property cost matters, but labour availability, transport lanes, and site access often matter more.
Fix: use a balanced decision framework: labour, accessibility, growth, compliance, and total cost-to-serve.
Mistake 4: Retendering without fixing scope and data
Bad data produces bad bids. Vague scope produces expensive risk pricing.
Fix: invest time in lane cleansing, scope clarity, and comparability schedules.
Mistake 5: Finishing the tender, then “hoping” implementation works
Hope is not a transition plan.
Fix: design mobilisation, cutover, and governance upfront—include transition capability in the evaluation.
Quick wins: what you can do in 30–60 days before a full strategy study
If you need momentum fast, these actions are typically worthwhile:
- Build a baseline cost-to-serve view (warehousing + transport)
- Identify top lanes and top accessorials driving freight cost
- Review carrier performance and claims process
- Assess DC capacity constraints and peak bottlenecks
- Tighten dispatch discipline: cut-offs, wave planning, dock scheduling
- Review packaging and cube utilisation (often a freight multiplier)
- Map contracts and expiry dates (3PL, transport, leases)
- Establish a weekly performance cadence with your 3PL/carriers if one doesn’t exist
Quick wins won’t replace strategy—but they reduce leakage and create immediate control.
How Trace Consultants can help with DC strategy, 3PL reviews and transport tendering
Network optimisation sits at the intersection of operations, finance, customer experience, technology, and procurement. It needs both modelling capability and operational realism.
Trace Consultants supports Australian and New Zealand organisations with practical, end-to-end programs across warehouse and transport network optimisation, including:
1) Warehouse & transport network strategy
- baseline and cost-to-serve analysis
- scenario design and evaluation (centralised/hybrid/decentralised)
- inventory and service trade-off modelling
- feasibility assessment and implementation roadmap
2) Distribution centre (DC) strategy and operating model design
- defining DC roles, service promise, and cut-offs
- capacity planning and peak management
- warehouse process design and productivity uplift
- technology considerations (WMS/TMS requirements and integration needs)
3) 3PL review and sourcing support
- performance and commercial health checks
- contract and rate card structure review
- governance and KPI design
- 3PL tender support: RFP documentation, evaluation, negotiation, mobilisation planning
4) Transport optimisation and tendering
- lane and shipment profile cleansing
- transport strategy (linehaul vs last-mile, metro vs regional segmentation)
- tender design, evaluation and negotiation support
- carrier onboarding and transition program management
5) Implementation and benefits realisation
- transition planning and cutovers
- operational playbooks and training
- KPI dashboards and governance cadence
- benefits tracking aligned with Finance
Most importantly: Trace’s approach is designed to reduce operational risk. Network change is disruptive if it’s done in isolation. Done properly, it becomes an orderly program with clear decision gates, measurable outcomes, and a transition plan that your sites can execute.
What to prepare if you’re considering a network review or tender
If you’re ready to move quickly, assemble:
Data
- shipment history (origin/destination, weight, cube, mode, service level)
- warehouse volumes (inbound/outbound, order profiles, peak factors)
- current warehousing and transport costs (including accessorials)
- inventory positioning and turns
- performance data (DIFOT/OTIF, claims, stock accuracy, lead times)
- contract details and expiry dates (3PL, transport, leases)
Stakeholders
- operations leaders (DC and transport)
- customer service/fulfilment owners
- procurement (tender governance)
- finance (benefits validation)
- IT (WMS/TMS/integrations)
- risk and safety (compliance, Chain of Responsibility)
The bottom line: optimise the network, then tender with purpose
If your warehouses are constrained, freight is blowing out, or service is slipping, a network optimisation program is often the fastest way to reset cost and performance at the same time. But the real value comes when strategy turns into procurement action—3PL reviews, transport tendering, and transition planning that actually deliver.
If you’re considering a DC strategy refresh, a 3PL review, or a transport tender, Trace Consultants can help you move from “we think we have a network problem” to a defensible plan and a controlled implementation—without gambling with service.
Ready to turn insight into action?
We help organisations transform ideas into measurable results with strategies that work in the real world. Let’s talk about how we can solve your most complex supply chain challenges.






