Carrier Procurement

Admin, January 8, 2015 07:22

Procuring transportation is a skill that requires continuous development. Most companies have teams that work on the execution and procurement functions of transportation. The logistics of collecting, servicing, ensuring safe and timely delivery requires multiple teams. Not by design, but all too often the everyday demands create departmental silos.

These operational silos can hinder the holistic approach to supply chain savings. The procurement team believes they have the lowest cost on a lane, the operations folks know a specific carrier will have the needed trailers to not slow up production, and so on. You planned, met with every team, and crossed off each item on the checklist; yet still have the invoice not align as planned.

 

I compare this to the likes of purchasing a car. You researched and picked out the truck you want, and priced it at dealer A. You go across town to the same brand dealership closer to your home, for convenience when having your new truck serviced. However, when the pricing is worked up, the price you thought it would be suddenly turns out higher. This is aggravating in its self, not to mention trying to have the salesperson explain why the cost is what it is. I hate this process and feel others share in this frustration. Only if there were logistics companies for purchasing cars like there are for carrier transportation. You would go to your car buying expert, explain your needs/wants, and have them use their expertise, network vantage point, and purchasing power to deliver the car you want.

 

I’m not suggesting adding steps or costs in the process, but rather relying on a strategic partner to deliver purchasing efficiencies.

 

This is what logistics companies do. They have the ability to analyze the flows of multiple providers for a lane, negotiate bulk pricing, and standardize accessorial costs. In doing so, they take out the additional steps experienced in dealing with multiple carriers. In addition, they also provide the operational planning and network oversights to mend silos and deliver efficiencies.

 

If you have enough time on your hands to embark on multiple discussions to procure transportation, and have to constantly educate teams as to how your network flows; then using a logistics company might not be ideal. However, if you are looking for streamlined discussions and one point of contact to multiple companies, thereby giving you more time to analyze your supply chain, then try utilizing an industry leading logistics provider.