In times of crisis, companies have been looking for solutions to reduce operating costs related to logistics. Today, logistical costs represent, on average, 7,6% of net revenue, with transport costs being the most representative: almost 50% of logistical costs.
Photo - Percentage of logistics costs in relation to net revenue
Source: Panorama ILOS “Logistics Costs in Brazil”
At this moment, in the discussion of the trade-off between freight cost and level of service, the situation has become more difficult, as the pressure is very strong to reduce costs, however, with the desire to maintain or improve the level of service.
To reduce these costs there are some options and the most commonly sought is to put pressure on the carrier or exchange them for others with more competitive rates. If your company is heading in this direction, it's good that you know that some options can be explored.
As an example, if your company is currently paying freight as a % of the invoice, it is likely that there is an opportunity to reduce transport costs by migrating to models that absorb operational gains, such as paying by R$/kg and/or R$/km.
In addition to changing the way freight is requested, another important point is how the search for better rates is structured. The RFI and RFQ processes must be well designed given the company's contracting strategy, with well-defined service regions, routes, types of necessary operation. Reducing the uncertainty passed on to the carrier will certainly bring about fare reductions.
The number of players invited to the process, the pricing structures, the load profile are key points for a good result in the negotiation process.
There are also solutions that companies can put into practice to reduce transport costs and that do not change the relationship with transporters, but with customers. These solutions are called “Menu Pricing”, being reviews of commercial policies that allow operational improvements reflected in cost reduction.
Consolidating orders with schedules, establishing more aggressive minimum order policies are strategies that guarantee better use and occupation of contracted assets. With the implementation of the menu, you migrate your demand to a load profile whose freight is cheaper.
Finally, when looking to reduce transport costs, we should not just think about putting pressure on suppliers with price negotiations. Structuring a quotation process and rethinking strategies that impact operational improvements is a good way to ensure more competitive rates and savings for the company.
