Improving Your Freight Costs – To begin

Whether you are a large company or a small one, if you use freight carriers you need to be reviewing the price you are charged and the service you receive on a regular basis. Best case scenario: this would be happening with all your suppliers.

Carriers, as with most suppliers, will over time become complacent, the service you are receiving slowly gets behind the rest of the market and your costs as a percentage of sales are not as good as they once were.

A review of your suppliers and a comparison with the market will tell you how much more you could be saving; then again it could also show you how much you are already saving (although this happens a lot less).

In my blog, I will explain the steps you too can follow to improve your costs and service.

This process can be informal by just requesting a quote or formal, using a detailed RFP process. Either way it is about stopping the leakage, it is also about improving the relationship you have with your service providers. So until next time, start reviewing what information and history you have now or where you can get it from.

 

RFP Design step 3 – The Objective

The objective section is a summary of outcomes the organisation wants from the contract and the overall aim of the contract eg: Company Ltd anticipates cost savings by utilising the services of one primary provider nationally.  It should also specify standards and overall results eg: DIFOT >97%.

It should state whether the contract will be awarded to single or multiple Tenderers and if joint (consortium) tenders are acceptable. It should also outline the tender process and the manner in which the contract will be awarded.

It should explain how much input to the day to day operations each stakeholder will have eg: co-development of standards.

This is also where other considerations (such as preferred standards) are listed.  For example, the company may want to raise its Environmental and Social Responsibility profile so would prefer to work with Tenderers that have ISO 26000 and/or ISO 14001.