The 4 S's: For-hire Logistics and Transportation Services

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The 3PL contract cycle can be managed just like any other outsourced services procurement, and has four distinct segments that we will call the four S: Source, Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.

Business

For-Hire Logistics and
Transportation Services:

How Do You Bring Purchasing Skills to the Process of
Purchasing Transportation and Logistics

28th WERC Annual Conference
by

Thomas L. Tanel, CTL, C.P.M., CCA
2nd Vice Chair, ISM Logistics & Transportation Group
and
President and CEO, CATTAN Services Group, Inc
Copyright 2005 CATTAN Services Group, Inc.

How Do You Bring Purchasing Skills to the
Process of Purchasing Transportation and
Logistics
 Purchasing Transportation and Logistics is

just like purchasing any type of service
 Good Purchasing skills and procurement
process are applicable as well
 Understanding price versus cost is
applicable as well
 As Dizzy Dean, the great Baseball Legend
once said, “If you can do it, it ain’t
braggin!”
Copyright 2005 CATTAN Services Group, Inc.

The Four S’s
Source
Solicit
Select
Secure
Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Source
 Identify Logistics and Transportation

requirements:
Review and clarify req’mts
Obtain feedback on 3PLs and carriers
Review KPIs and analyze gaps
Establish which gaps are most critical

Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Source
 Gather data and manipulate information:
Compile or obtain 6-12 months of

history/activity req’mts
Obtain details: inbound and outbound;
origins and destinations; weight, cube
and # of pieces; traffic lanes, supply
chain streams, and demand chain
streams; types of equipment; volatility
and performance req’mts
Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Solicit
 Develop a RFB/RFP:

Decide which 3PLs and carriers receive

solicitation based on RFI results
Determine your preferred pricing and
contract formats
Specify whether bid/proposal by lane
allocation, region or complete scope
Include TCA/NITL Voluntary Guidelines
to Good Business Relations
Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Solicit
 Send bid/proposal package to qualified sources:
Prepare a template with details of info

gathered
Provide clear instructions concerning info you
want included
Attach a copy of anticipated contract and
T&Cs upfront
Provide sample performance reports to be
used as measures of agreed performance
Establish what is a responsive bid/proposal
and adequate submission date
Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Solicit
 Hold a Pre-Bid/Proposal Conference:
Invite qualified bidders/proposers
Discuss expectations
Hold Q&A
Provide feedback and answers to all

Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Select
 Verify documentation submitted
 Establish T&Cs that may require

adjustment, compromise or negotiation
 Analyze bid or proposal submissions
 Develop selection criteria or negotiation
strategy
 Select or conduct negotiation
Copyright 2005 CATTAN Services Group, Inc.

The Four S’s: Secure
 Provide contracts to selected 3PLs and/or

carriers
 Emphasize L ong T erm R elationship
 Monitor 3PLs’ and/or carriers’ performance,
costs and commitments
 Seek continuous improvement and
incorporate feedback to and from
 Hold IPRs and provide a performance
report card on a regular interval
Copyright 2005 CATTAN Services Group, Inc.

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