Ocean freight procurement and Shipper of Choice workshop

Client Objectives

• Introduce direct carrier contracting with a strategic partnership direction;

• Strict evaluation of providers’ capabilities, costs and services through optimisation;

• Thorough financial risk assessment of providers;

• Competitive quality and service to improve predictability;

• Achieve ’best possible service’ at the ’lowest possible cost’.

Drewry Approach

• Drewry managed the FCL ocean transport competitive events conducting 2 rounds with incumbent and prospective carriers;
• Led a ‘Shipper of Choice’ workshop to prepare the strategies for the bid including the LSP line-up
  Supported the client logistics leadership team at every stage;
• With the client in-house team, Drewry put together accurate data scores by provider;
• Provided an ongoing market evaluation using Drewry benchmark data;
• Recommended an astute risk mitigation strategy and proposed carrier performance contract clauses;
• Measured the impact of potential scenarios and final decisions;
• Recommended areas of focus to improve the flow of goods within the client supply chain.

Results Achieved

• Client managed to minimise cost increases in a strong seller’s market
• De-risk their dependency on NVOCCs by securing direct carrier contracts and allocating around 25% of their volume with direct carriers;
• The process from planning to final allocations took 3 months, as planned;
• Risk mitigation measures were implemented;
• A market advantage of around 32% was achieved for the top 3 volume lanes, versus recently negotiated rates;
• Bid Process efficiencies were created stimulating a favourable result;
• Advice and market intelligence in a fast and ever changing market environment, kept client abreast of developments and enabled them to anticipate and address the reactions of bidders.