I had the distinct pleasure to become a panelist on the Transportation and Logistics Council Annual Meeting in St. Louis, MO a week ago. The title on the session was “Saving Transportation $$$.” My presentation centered on three key areas, Carrier Selection and Evaluation, Contract Negotiation and Auditing and Performance Measurements. Here are some blueprint from that presentation.
Carrier Selection and Evaluation: First and foremost, discuss the customer. See the buying process through the eyes on the customer. What is the customer’s perception in the value received? Cheapest is not the BEST! Least cost in conjuction with the service required and offered is the better. Do you know the difference between cheapest and least cost? There is a great motivational poster I recently saw titled “Success”. It states “if do not take care in the customer somebody else will”. What a great message.
Contract Negotiation: Remember, contract will not be a four-letter word! Over the years there are reluctance by shippers to enter into contractual agreements because of their freight carriers. Why? Are they afraid they’ll need to make a commitment? Yet they always here is a lower rate. Contracts protect BOTH parties. Shippers and carriers should be prepared to share facts about an “Open Book” basis. Remember, for successful long-term business relationships shippers and carriers has to be partners and since partners they must be looking out for the financial well-being in the other party.
Auditing and Performance Measurements: Both parties MUST make a systematic examination and evaluation of Processes. Create a defined audit strategy and strategy. Evaluate existing controls and make certain they work. If not, modify those to ensure they work. The audit process includes goals to constantly drive out costs for both parties. Create a place for periodic business reviews between your parties to ensure everything that’s likely to happen is usually happening. Be sure to assess customer comments and remember that also includes internal in addition to external customers. Failure isn’t an option.