Ludovic Menedeme, Sr. Transport Manager at Baxter Healthcare speaks at a session on 'The Reality of Network Realignment & Rate Negotiations with Carriers' at the 7th European 3PL Summit in Brussels, November 25th 2009. To download all of the slides from the conference for free visit www.3PLsummit.com/eu_2009ppts

1. Reality of Network Realignment
& Rate Negotiations with Carriers
Brussels Nov, 25th 2009
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2. 2009 Results
Business Model Description:
• Full Truck Loads
• $ 20 millions spent
• Temperature conditions
• Road/Short-sea/Intermodal
Results:
10% savings
Overall performance 98%
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3. Savings & situation
Savings coming from :
? Expertise
? Economical situation Economical situation
? Extra-business
!?! RISKS and RESPECTS !?!
Carriers out of market
Capacity reduction Carrier relationship
& Rates reduction
compromized
‘Survival’ mode
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4. Business Control model
Create a fully integrated transport chain which is:
Optimally configured to specific customer’s service and cost needs
Managed in a planned, controlled, predictable and visible manner
Reduced Costs Improved Service
Reduced Cost Reduced Cost Improved Improved service
procurement Transport Transport Chain level
Visibility
Reduced Cost Reduced Cost Improved capacity
Labour Management & Increased availability
Admin responsiveness &
Reduced Cost
exceptions flexibility
Could we find one
Company able to provide
that ?

5. Business Case
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6. Outsourcing ?
Theoretical / Sales approach:
As most 3PLs rarely can offer service that fulfil all your requirements, an option is to use one party, a 4PL
that can combine the best of each into one setup :
Better buying power than yourself
They may have access to a larger scale of subcontractors
Can manage / control the operations more efficiently
Can develop the logistic setup proactively in a more professional way
The need for a strategic partner who can increase your own competitive advantage
Reality:
Currently running a 3PL/4PL tender out of 12 Cies no-one can deliver ALL the above basic expectations
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7. 3PL/4PL capabilities evaluations
Procurement and tendering process
- no strategic market approach (core carriers vs spot ones)
- weak contracts with carriers (legal administration on contract, SLA’s, …)
Operational
- proactivity and administration on transport document (temp records, CMR, …)
Carrier management
- power to drive corrective actions (alternative$, integrity)
Financial
- invoicing to Customers vs carrier invoices management, payment, credit
Transport intelligence
- flows / loading optimization
- segmentation vs clusterization (dedicated team per shippers activities)
- network integration and modelization
Audits
- not used to be audited neither to run audit plan on carriers
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8. Conclusions
The competition is open …
Logistics Providers demonstrating best practices to support
shippers expectations will gain business
More than saying, being a strategic partner is mandatory
Carriers are key in our businesses… cost effective solutions should
come by managing the supplychain in an integrated way
We all have a role to play to target our challenges
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