ILOS reviews an energy company's transportation contracting strategy and avoids costs of up to 12% of the freight bill
Facing a scenario of increasing demand, an energy company faced challenges related to the availability of its dedicated vehicle fleet, as carriers abandoned operations or stopped providing vehicles. At the same time, the company sought to expand its operations, which further complicated the situation.
In this challenging context, ILOS conducted a comprehensive review of the transport procurement strategy for this operation. The work included a detailed internal analysis of the entire operation, its associated costs and times, as well as market research to bring together best practices from other large companies with similar operations.
The proposed recommendations included the review of freight rates, with triggers related to diesel costs, the introduction of carrier-based bonus and onus systems, and the review of contracts. In addition, ILOS developed a custom tool based on its ‘Should Cost’ methodology for pricing and continuous updating of freight rates.
These measures aimed to ensure the maintenance and continuity of operations, resulting in savings of up to 10% on the freight bill, with the possibility of obtaining an additional 2% through initiatives aimed at improving productivity.
With a highly specialized team in consulting in the transportation segment and vast experience in optimizing logistics operations, ILOS is prepared to assist companies from different segments in improving their transportation contracting strategy.
project type
- transport strategy
Segment
- Energy
ILOS indicates cost avoidance of up to 12% of the freight bill in a company in the energy sector
Challenge
Energy company faced challenges related to the availability of dedicated vehicles and needed to review its transportation contracting strategy to ensure the continuity of its operation
ILOS solution
- ILOS recommendations included adjusting tariffs, reviewing contracts and introducing a bonus and burden policy.
- ILOS has developed a tool for pricing and continuous updating of freight rates using the “should cost” methodology
Results
- Cost avoidance of up to 12% of the freight bill
- Continuity of transport operations
