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

04/03/2015 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 1

04/03/2015 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 2

04/03/2015 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 3

04/03/2015 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? 4

04/03/2015 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 5

04/03/2015 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? 6