How Swedish Match Saved 26% on Global Freight Costs

Four Million Boxes Daily, 100 Nations, One Challenge

It's another day at Swedish Match Industries' factories in Vetlanda and Tidaholm. Inside, rows of precision machinery hum steadily, producing over four million matchboxes a day - the equivalent of nearly 200 million matches destined for households and businesses across more than 100 countries.

This is global scale at its most tangible. Every year, Swedish Match's production could circle the earth 50 times. With more than 175 brands - from Sweden's beloved Solstickan to international icons Three Stars and Redheads - the company represents over 150 years of Swedish industrial heritage woven into a powerful global presence.

But heritage alone doesn't keep a company competitive. For a global exporter with daily deliveries across five continents, freight costs can make or break profitability. And when the logistics market turned volatile, Swedish Match faced a question every CEO knows too well: how to protect margins without compromising service or quality?

200 million matches destined for households and businesses across more than 100 countries. This is global scale at its most tangible. Every year, Swedish Match's production could circle the earth 50 times. With more than 175 brands

When Freight Costs Jeopardise Profitability

Swedish Match's logistics team was experienced and highly capable. Yet the global transport market had become unpredictable - with complex fee structures, rapid price fluctuations, and opaque surcharges that were difficult to monitor.

For a company dispatching to 53 nations via maritime and terrestrial routes, even marginal pricing adjustments translated into significant ramifications for the net profit. Internal teams were overextended. Monitoring market dynamics, renegotiating contractual agreements, and ensuring adherence to supplier compliance across numerous freight forwarders necessitated greater resources than were available.

The directive from senior management was clear:

• Reduce costs without compromising reliability.
• Liberate time and resources for core operations.
• Institute enduring transparency and governance.

Enter ERA Group - brought in to deliver specialist insights, procurement expertise, and a methodology that could unlock hidden value.

Translating Insight into Action

ERA Group began with a comprehensive analysis. Through in-depth interviews, data collection, and a systematic audit of freight contracts and supplier terms, ERA mapped Swedish Match's logistics flows in detail.

This was not merely a financial review; it encompassed every aspect of goods movement – by sea and land, across 35 maritime destinations and 23 overland transport routes. By benchmarking each contract against market data, ERA was able to pinpoint hidden surcharges, outdated clauses, and pricing inconsistencies that had previously gone unobserved in routine operations.

The findings unveiled inefficiencies embedded within contracts, pricing structures, and operational practices – opportunities imperceptible even to seasoned teams.

From there, a structured procurement process began. ERA invited multiple carriers and freight forwarders into the process, evaluating them not only on cost but on reliability, service levels, and the ability to provide transparency over time. Negotiations were managed end-to-end, ensuring Swedish Match's internal logistics experts could remain focused on core operations while ERA handled the heavy lifting of supplier engagement.

Crucially, ERA did not perceive the project as a singular event. Procedures were established to ensure that any improvements extended beyond mere short-term gains. Every new agreement was rigorously assessed against long-term sustainability criteria:

Would this supplier maintain competitiveness amidst fluctuating market conditions? Could these terms withstand alterations in fuel surcharges or regulatory requirements?

Crucially, ERA also introduced continuous monitoring mechanisms - tracking freight market trends, analysing the impact of regulatory changes, and ensuring that suppliers complied with their contractual obligations. This gave Swedish Match something it had never fully had before: a real-time view of its global freight costs, paired with the confidence that contract terms would actually be delivered in practice.

The result was not only measurable savings, but also a methodology that embedded greater resilience into Swedish Match's logistics strategy. ERA's structured approach transformed what had previously been a resource-intensive, reactive process into one that was transparent, controlled, and strategically aligned with the company's long-term goals.

Results: Immediate Gains, Enduring Impact

The outcome was immediate and significant. Swedish Match achieved 26% savings in international freight costs across sea and land transport - without any compromise to service or delivery standards.

Deliveries to over 100 countries continued with the same reliability, now underpinned by contracts that offered enhanced visibility, stronger leverage, and stricter compliance.

But the benefits extended beyond the balance sheet. ERA's process brought structure to Swedish Match's logistics operations, freeing resources for core activities and enabling the team to act with greater agility in response to market shifts.

Professional. Efficient. Practical.

For Krister Svensson, Logistics Manager at Swedish Match Industries, the collaboration represented more than cost savings:

The collaboration with ERA has proven exceptionally effective. Their experts have demonstrated high professionalism and have consistently been readily accessible. We are highly satisfied with the savings realised. They have provided comprehensive support – managing supplier negotiations, monitoring market cost developments, reviewing our contracts, and evaluating proposals from carriers and freight forwarders.

What began as a cost-reduction project evolved into a long-term partnership. ERA didn't just deliver savings - they embedded a methodology and transparency that continue to strengthen Swedish Match's competitiveness.

The story of Swedish Match proves that even world leaders in their field can uncover hidden opportunities when they open the door to external expertise.

With ERA's support, Swedish Match not only reduced costs but also gained the tools, insights, and control mechanisms to sustain those improvements. Capital was freed for reinvestment into innovation and growth - without sacrificing quality or customer trust.

For CEOs managing complex international supply chains, the lesson is clear: savings and sustainability can go hand in hand.

ERA finds savings where you least expect them - turning costs into capital for future growth.

The collaboration with ERA has proven exceptionally effective. Their experts have demonstrated high professionalism and have consistently been readily accessible. We are highly satisfied with the savings realised. They have provided comprehensive support – managing supplier negotiations, monitoring market cost developments, reviewing our contracts, and evaluating proposals from carriers and freight forwarders.