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Client Situation:
A $6B building supply company was in process of emerging from bankruptcy and wanted to continue to drive internal and external improvements with its highly regarded carrier community. |
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CSSI Role:
CSSI was engaged as part of a larger major-consulting firm project to manage a concurrent strategic sourcing effort for the company’s dry van, flat bed and tanker transportation carrier base. The total spend exceeded $300M annually on over 450,000 loads. |
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Approach:
The team leverage a leading internet based transportation RFI/RFP sourcing solution to provide rapid distribution and analysis of carrier bid data (over 200 total carriers). Custom optimization capabilities were defined and implemented by the team to enable analysis of various flatbed payload options. Combinatorial bid optimization techniques were leveraged to assess multiple rounds of carrier bids. Significant face to face negotiations were strategically driven to gain additional savings and operational improvements with the carriers. |
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Results:
Total savings exceeded 8% of spend, in a pro-carrier market. Carrier’s commented that the RFP process was well communicated and presented in a fair environment that allowed each carrier to define its optimal role for the company. |
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Transportation Sourcing |
| Reduce freight spend, improve carrier relations, increase control of your transportation shipments. |
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CSSI Consulting's transportation consultants have procured over $3B in freight for our clients. Using an industry leading methodology, we leverage the latest technologies to expedite and optimize results for our clients. If your annual transportation spend is from $10 to $200 million (or greater), contact us to see how we can save you money and improve your transportation services by undertaking a strategic transportation sourcing process.
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| We have experience in the following transportation modes: |
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Full Truckload / LTL
- Dry Van
- Reefer
- Bulk
- Flat Bed
- Tanker |
Small Package
- Domestic
- International
- All service types
- Air
- Ground |
Air Freight
- Domestic
- International
- Priority
- Deferred
- NFO Service |
Ocean Freight
- Full Containers
- LCL / NVOCC |
Rail
- Box / Flat Car
- Hopper / Bulk
- Intermodal
- Class I / Regional |
3PL Operations
- Transportation
Management
Outsourcing
- All modes, LLP's
- Global Coverage |
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How we can help you:
In today's increasingly complex economic and global trade environment companies are ever more dependent on their transportation and logistics providers for on-time, cost-effective service and visibility throughout their supply chain. Our comprehensive, data driven sourcing approach is designed to delivering win-win results to you and your carriers. In comparison to other firms that may just offer a technology solution with less experienced consultants to "run the numbers" CSSI's sourcing activities include:
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- Establish corporate-wide scope and objectives
- Complete comprehensive data collection and baseline analysis
- Define sourcing strategy and communications plan
- Build and release RFI/RFP
- Analyze and optimize results by leveraging advanced optimization technologies
- Establish detailed negotiation strategies
- Negotiate and select carriers
- Define implementation requirements and strategies to enable targeted results
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Results:
Results are never the same for any two companies, but our experience across dozens of companies, and multiple industries have given us confidence in our ability to deliver results that are real and implementable. Our expertise can help save your company millions of dollars with bottom line savings ranging from 6 to 14%, improved service delivery and sustained benefits through improved baseline shipment information.
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Market Updates:
It is a buyer’s market right now for transportation sourcing. After several years of shippers being beholden to the carriers and seeing little but price increases, the times continue to put rate pressures on the carriers without a foreseen shift for the next six months Use this opportunity to secure new rates, enhance carrier capabilities and update out of date contracts now. (Update: Q3 2009)
Air Freight: International air freight market closed out 2008 with 6 consecutive months of lower volume and continued it’s decline through the first half of 2009. International demand is generally 20-30 percent below 2008 and it may take years for the industry to recover to 2008 levels due to structural changes in the supply chain.
Ocean Freight: Continued capacity increases and weakened demand will further reduce carrier revenue as business volumes suffer across all trade lines. Expect planned rate increases from carriers to not hold in this volatile market as some move to price to fixed costs. Some bulk and tank carriers are maintaining rates as capacity in these markets are strained as some vessels are used as a warehouse on water and kept offshore.
Rail and Intermodal: Volumes have dropped, but rail has seen a slight increase and may see further increase as major US manufacturing capacity comes online with the US auto manufacturers.
Truckload: Though some hoped to see an increase in OTR demand by this time, general market conditions remain soft for the carriers. Shippers should continue to watch for continued bankruptcies and consolidations in the market as carrier results deteriorate. Use this opportunity to align network needs with leading and specialty carriers and move to ensure win-win relations are established – especially in light of capacity reductions in the major shippers.
LTL: The LTL market is in one of the worst downturns in recent history. Rates have not held for the carriers, and shippers are seeing double digit savings in most occasions. Watch for this market to have more significant upheaval and may face bankruptcies of additional major carriers. |
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