Case Studies in

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• Case Studies in
• Transport and Freight Cost Savings
• IBEC/EI Athlone 24th Feb 2009

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Case Studies in how to reduce your Freight
Transport costs

• Introduction
• Why analyse your freight transport costs?
• Practical Suggestions to source cost savings
• Case studies Three brief examples

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Introduction

• Transport Matters what do we do?
• What can an analysis do for your company?
• How effective can it be?
• How accurate honest will it be?
• Is it competitively priced?
• Can fees be possibly grant-aided?

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Why analyse your freight transport costs?

• Could reduce your transport costs by up to 25
• Help your product remain competitive in
  marketplace
• Can help create a company-wide focus on costs
• Become aware of new improved (niche) suppliers
• Have independent unbiased opinions/comparisons
• Benefit from considerable experience and
  relationships
• No distraction from your core business
• Annual support for further assistance during the
  year
• Staff can develop improved negotiation skills
• Competitive fees completely benefit-related

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Reduce Costs Vs. Increase Sales

• Example of reducing costs
• Annual Transport/freight outlay EUR 1M
• Savings after analysis (say 15) EUR 150K
• Example of Increasing sales
• Net Profit on annual sales say 5
• Additional annual sales required to generate the
  same 150K profit EUR 3M

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Practical Suggestions to source cost savings

• Consider one agent or partner for all your
  business
• Consider the opposite several niche operators
• Request annual contract special rates
• Request all-in annual rates with no currency
  or fuel alterations
• Amalgamate shipments and reduce frequency
• Consider sea/road freight rather than air freight
• Provide training for key shipping/transport staff
• Request improved credit terms if possible
• Consider a Tender or Request for Quotation (RFQ)
• Request rebates if agreed targets are
  met/exceeded
• Consider in-house shipping personnel to be moved
  to your premises
• Subscribe to current shipping and transport
  magazines
• Observe service providers who are being utilised
  in your area
• Request your company livery be put on suppliers
  vehicles

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Case Study No. 1

• Company Type Medical Products
• Staff numbers 300 plus
• Location Mayo, Ireland
• This company exports imports to/from US/EU
  through sea freight, road freight and airfreight
  and also nationwide distribution within Ireland.
• Annual transport spend c. EUR 1.5M
• Annual savings identified through analysis 15
• Action taken after analysis introduced new
  carriers for containers to/from US and some EU
  road freight. Additionally used analysis
  information to renegotiate improved annual rates
  with some current carriers who have been working
  with company for many years.

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Case Study No. 2

• Company Type Bricks/Construction
• Staff numbers 60
• Location Kildare, Ireland
• This company primarily imports its raw materials
  from UK and EU and its main markets are Ireland
  and the UK. Hence they have import, export and
  nationwide distribution costs
• Annual transport spend c. EUR 1.1M
• Annual savings identified through analysis 16
• Action taken after analysis Introduced new
  carriers for the UK import /export traffic and
  the imports from EU renegotiated improved rates
  with Irish distribution suppliers. Also changed
  the terms of some of their imports from CF to
  EXW, where they now control and pay for the
  shipping aspect rather than their suppliers.

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Case Study No. 3

• Company Type Electronics Assembly
• Staff numbers 30
• Location Galway, Ireland
• This company primarily moves its products by air
  from Ireland to India and China and also imports
  materials from these areas by air,
• Annual transport spend c. EUR 0.5 M
• Annual savings identified through analysis 20
• Action taken after analysis renegotiated
  improved rates with existing key suppliers based
  on findings from the analysis. Also using some of
  the sourced new suppliers as back-up

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Thank You