Exports to 14 markets across Western and Central Europe and North America, with 90% of products destined for export
Challenge
The client’s transportation operations relied on spot arrangements for logistics services, with no long-term commitments to service providers. This ad-hoc approach led to variable costs and limited opportunities for negotiating favorable terms with transport vendors.
Solution
A structured tender process was introduced to optimize transportation procurement. Offers were solicited from potential service providers for key destinations, with annual estimated required truckloads per route. Key components of the tender included:
- Volume-Based Rebates: Service providers were asked to propose annual rebates based on delivery volumes.
- Fixed Pricing and Fuel Price Indexation: Prices were locked in for six months, after which adjustments tied to fuel price fluctuations were permitted.
Three vendors were awarded contracts, with two managing road transport and one handling combined truck-and-sea logistics for North American shipments. This strategy established a more predictable cost structure and facilitated long-term partnerships.
Outcome
The tender process delivered tangible savings, reducing transportation costs by 4% compared to previous spot-based pricing while establishing a more stable and efficient logistics network.
