Transportation Negotiations and Contracts March 4, 2015 Ginnie - - PDF document

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Transportation Negotiations and Contracts

March 4, 2015 Ginnie Venslovaitis, CCLP

Nothing says “Professional Logistics Expert” like

Ginnie Venslovaitis, CCLP

Director, Transportation Operations, Hudson's Bay Company The Bay Home Outfitters Lord and Taylor Saks Fifth Avenue Saks Off 5th

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Who Will Manage the Process?

– Transportation Team

• In house, day to day experts

– Procurement Team

• Specialize in negotiating and creating savings

but with less direct expertise – Third Party Specialists

• Experts at Negotiating but may be unfamiliar with

your business

Internal or Outsource?

Internal Teams Knowledgeable Team members Unbiased Service versus Cost Third Party or Outsourced Understands the ultimate goal Fully aware of specific nuances of the network Paid on savings or other compensation

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The Importance of History and Data

Data Sources TMS system Accounts Payable Activity Reports Clean Data Period of History Is there seasonality? 12 months data Scope and Scale What part of the business is under review

Tools and Selection Criteria

How will the information be stored, sent and collected? What will be used to select winning bid? Multiple Point Scale Create weightings for selection Honest assessments Price or Service How many rounds of submissions? Total time allowed Carrier feedback process

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Understanding the Current Market

Who are potential participants Regional or National carriers Service types ( dry, reefer, frozen) Asset Based or brokers Are the lanes head haul or back haul? Road or Rail Where do you fit in? Capacity Challenges Volumes to be offered

What does the Shipper Have to Offer?

What makes you a good customer? Volume Consistency Payment terms Loading and Unloading practices Reporting Long term agreements Future Opportunities for growth Standard equipment requirements Are you a good fit?

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When to Begin?

Length of time to complete negotiations and contracts How big is the project? Total Business Single Division Regional New Company Merger or Acquisition Time required for a complete review and implementation Who will manage the transition? Peak or Non Peak start up

Negotiate or Tender

What is the goal of the exercise? Service improvement Loss of current carrier Network change Cost Savings Negotiation with current Service Provider Less time investment Less Risk Consistent Service Long term agreement possible

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What can go wrong?

Bad or Dirty Data Rates and Submissions are incorrect Poor Transition from incumbents to new carrier Service Failures Submissions from all carriers are more than current rates Negotiating Process is a Distraction from operations

Questions?