Transportation Management

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Transportation Management

• What are your critical transportation factors?
• How do these factors impact your business and
  the business of your competition?
• How might this change minute to minute or year
  to year?
• What are the comparative cost of cargo movement?
• Relationships

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Transportation Factors

• Shippers
• Carriers
• Pricing
• Infrastructure
• Environment
• Intermediaries
• Security
• Safety
• Which are most important to your system?
• And why???

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Shippers

• Wish to decrease cost while increasing service
• Shippers desire for service, what is it worth?
• tariffmarketsecondary market

4
Carrier Partner Traits

• Ability
• Reliability
• Stability
• Honesty
• Consistency
• Health
• Flexibility

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Carrier issues impact you and your customer!

• impact
• Transportation cost landed cost, SCA
• Transit time inventory, variability issues
• Reliability inventory
• Accessibility transit time, freight cost
• Capabilities- level of meet your needs
• Security Safety inventory

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What is the power of the carrier over your
business and how do you protect yourself?
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• Understand your carrier and their business
• Who are their competitors?
• Where do they stand within their industry?
• What are the key drivers in their decisions?
• What type of market do they operate in?
• What are their cost of operations?
• What is their future?

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• Communicate and share information with your
  carrier(s), remember they are part of your Supply
  Chain system! They can improve your return.
• How much to share?

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Carrier Services

• Transportation is more than just moving product,
  what other services can they provide?
• Expand your knowledge of other functional areas
  within your business as well as the business of
  your transportation partner

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Services Provided

• Reconsignment
• Diversion
• Stopping in Transit
• Transit Privilege
• Documentation
• Information

• Consolidation
• Vehicle services
• Loading Unloading
• Weighing
• Tracing/Expediting

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Pricing Transportation

• Point of negotiation or tariff item?
• Dont be afraid to ask!
• Will be different between and within modes

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Price Negotiation

• TERMS TERMS TERMS!!!
• What is included in the price
• Know the cost involved
• Lower rates vs. service
• Know the impact of your decision!!!
• When in doubt, ask!!

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The Carriers View

• When to say NO!
• Must know cost!
• Shippers power as well as other stakeholders
• Industry trends
• Business mix trends
• Know your customers

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Logistics Relationships

• Working together with your supply chain partners
• Vendor/client Strategic alliance
• Be a good partnershare information!!!!

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To build or not to build?Vendor /Client or
Alliance

• Logistical audit
• S.W.O.T., Look at current system
• Goals and objectives, where you want to go
• Measures, needs, gaps
• Industry analysis
• Management support
• What does it tell you?
• Decision to form a relationship
• Why? Why? Why? Why? Why?
• Benefits for you and your partner
• Drivers- Reasons to partner SCA?
• Facilitators- factors that enhance growth

Customers view
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• Evaluate the alternatives
• Select a partner(s), if one is found
• Implementation
• Continuous improvement
• A collaborative relationship
• Keep people involved up and down the chain!
• Never stop working to improve your system and
  eliminate the sins of waste

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Logistical Intermediaries

• What is your corporate and logistics strategy?
• What expertise do you have in your own
  organization?
• Country specific knowledge
• Partner or service provider?
• They help you get it there!

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Types of Intermediaries

• Freight Forwarder
• NVOCCs
• Agent(s)
• Export Management Companies
• Export Trading Companies
• Customs Broker
• Export Packer
• Third party logistics providers (3PLs)

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Trade-offs

• What degree of control do you wish along the
  chain?
• Centralized vs. Decentralized
• Or a Combination

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Value and Service Maximization
Centralization planning and coordination of
logistical activities
Decentralization characteristics specific to
each market
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Degree of Transportation Responsibility

• Are you selling Ex-works (EXW)
• Free on Board (FOB)
• Cost, Insurance and Freight (CIF)
• Delivered Duty Paid (DDP)?
• INCO Terms

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Goals of Purchasing

• Secure product--RM
• Quality
• Strategic
• Control cost
• The right product when you need it, done within
  the overall system
• What is well bought is ½ _______

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Forward Buying

• Why?
• Risk vs. Cost
• From a logistical point of view

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Inbound

• Multimodal coordination
• Coordination between the links
• Knowing what needs to happen
• Knowing what might happen
• Issue anticipation
• Getting the job done!!

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Strategic Logistics Management
Art
Science
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