Analysis

Carrier contract analysis and negotiation is complex; however, the data analysis tool set and combined expertise of our transportation consultants enable us to consistently deliver savings of 5-20%.

The advanced analytics and business intelligence tools provide a scalable suite of transportation cost management analysis and optimization services that help significantly reduce shipping costs across all modes of transportation, including:

  • Ocean container
  • Air freight and forwarding
  • Rail and intermodal
  • Less-than-truckload and full truckload
  • Parcel and courier

In contract negotiations, pricing managers and analysts utilize their technical expertise to produce an in-depth pricing profile, which presents multiple contract structuring options to the carrier(s) throughout the negotiation process.

Our negotiation services for carrier contract ensures that you receive the carrier incentives you are entitled to and deserve. Our company is consistently engaged in multiple carrier contract and analysis projects every month on our clients’ behalf.

ADVANTAGES OF FREIGHT CONTRACTS

With contract negotiations you enjoy benefits, such as:

  • Eliminate costly pricing and routing errors with big data automation
  • Instantly update and distribute multimodal information across all branches and offices
  • Enable automated internal quoting, tendering and e-commerce

With a freight contract, there many advantages, such as:

Improved Margins

Eliminate potentially expensive manual errors when the pricing team uploads rates and when the sales team selects rates

Improved productivity

Instantly update and distribute multi-modal freight rates, freeing up the pricing team for more value-adding trend analysis

Increased sales

Automated internal quoting, tendering and e-commerce improves win rates, sales capacity, and brings in new business.

Contract negotiations go beyond the carrier analysis and negotiations. The negotiations also manage the contracts and ensure your carriers are compliant. This gives you the ability to have all carrier contracts, invoices, and transportation-related data in one location, so you can manage your transportation costs across global divisions much more effectively.

Strategy

Companies with manufacturing operations have evolved direct material sourcing from an administrative function to a strategic procurement process. Transportation has followed a similar evolutionary pattern, moving upstream from freight transactions to an integral component of top-level corporate planning and procurement strategy.

Here are seven strategies to elevate freight management in an organization for a more competitive supply chain advantage:

  • Be demand-driven

    Transportation planning becomes a proactive process, rather than reactive.

  • Utilize technology to automate administrative tasks and make smarter decisions

    Leverage technology to normalize RFP responses and analyze carrier bids at different levels of granularity. Utilize workflow automation tools to automate the RFP process.

  • Hire smart data analysts

    People who understand the intricacies of transportation and bid responses can draw insights that lead to additional leverage in negotiations. Analysts who are well-versed in technology, such as network modeling tools, are especially beneficial.

  • Disaggregate freight spend data

    When analyzing freight spend, the devil is in the details. Information systems should evaluate each mode/equipment type individually, and display each category of charge — line haul, fuel, accessorial charges — separately.

  • Allow carriers some flexibility in bidding

    When conducting a bid package, carriers may suggest alternate options that could create efficiencies for both parties.

  • Keep in touch with market realities

    The ability to quickly identify and capitalize on upticks and downticks in transportation rates by various lanes and modes is essential to create a supply chain advantage.

  • Adopt performance metrics for carriers

    Having a structured approach to monitoring and score-carding carriers ensures that future decisions are based on real data instead of anecdotal evidence.

Best rates

Handling negotiation services for carrier contracts is a time-consuming process. It is not simply a matter of sitting down with a carrier, whereby they name a price and you agree to it. The key is that you must negotiate. Shipping freight is an expensive endeavor; therefore, it is in your best interest to secure the best rates possible.

An important factor in negotiations is the type of freight you ship. Freight that is prone to damage or theft is not profitable for a carrier, and thus is more expensive to ship.

  • Basic Parts of a Freight Contract – Certain questions come to mind when considering a freight contract, such as: how often does your company ship product? How much tonnage do you ship? What are you paying your current carrier? How quickly do you pay your bills? What is your shipping schedule? Where do you ship? How much tonnage do you ship per destination? In this example, how much tonnage you ship will directly affect the cost of freight. What is your specific freight description? What freight class ratings do you ship? Are hazardous materials involved? Will freight be pre-paid or collect?
  • Sitting Down to the Table – Once you have all your data together, you may either set up a face-to-face meeting with the carrier or send out Requests for Proposals (RFPs), also known as Requests for Quotes (RFQs). RFPs will give you a chance to review each company’s proposal and make a chart of what they are offering. This chart will help you to easily compare who will give you what, and for how much.