Optimizing Freight Costs through Strategic Negotiation PPT

This PPT slide, part of the 25-slide Supply Chain Cost Reduction: Transportation PowerPoint presentation, outlines strategies for negotiating contract prices in freight transportation, emphasizing 2 primary methods. First, it highlights the importance of establishing a reference point for freight rates. This involves comparing shipment rates from various suppliers operating on similar routes, which can provide a benchmark for negotiations.

The second method discussed is Clean-Sheet Cost Modelling. This approach focuses on determining the optimal mix of vehicle, fuel, labor, and other operational costs necessary to deliver a specified service level. By analyzing these components, companies can identify inefficiencies within their suppliers' operations. This understanding allows for more informed discussions regarding tariffs, particularly when considering factors like truck utilization rates.

The slide categorizes costs into variable and fixed components. Variable costs include fuel, maintenance, and repairs, which collectively account for a significant portion of total expenses. For instance, fuel alone represents 24% of the total costs. Fixed costs, on the other hand, encompass labor, general and administrative expenses, and other overheads, with labor costs alone making up 32%.

The concluding statement emphasizes the potential for substantial savings—between 15% and 50%—during the negotiation phase with service providers. This highlights the financial impact of effectively leveraging cost components and supplier inefficiencies in negotiations. Overall, the slide serves as a practical guide for executives looking to optimize their freight costs through strategic negotiation techniques.

This slide is part of the Supply Chain Cost Reduction: Transportation PowerPoint presentation.

Download the Full Presentation

EXPLORE MORE SLIDES FROM THIS PRESENTATION

EXPLORE MORE PRESENTATIONS ON

Supply Chain Analysis Transportation Supply Chain Cost Reduction

Are you familiar with Flevy? We are you shortcut to immediate value.

Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations

Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.

Flevy is the world's largest knowledge base of best practices.

Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.

Read Customer Testimonials

"As a consulting firm, we had been creating subject matter training materials for our people and found the excellent materials on Flevy, which saved us 100's of hours of re-creating what already exists on the Flevy materials we purchased."

– Michael Evans, Managing Director at Newport LLC

"As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.

The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision."

– Dennis Gershowitz, Principal at DG Associates

"As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor

... [read more]

– Michael Duff, Managing Director at Change Strategy (UK)

"I have found Flevy to be an amazing resource and library of useful presentations for lean sigma, change management and so many other topics. This has reduced the time I need to spend on preparing for my performance consultation. The library is easily accessible and updates are regularly provided. A wealth of great information."

– Cynthia Howard RN, PhD, Executive Coach at Ei Leadership

"If you are looking for great resources to save time with your business presentations, Flevy is truly a value-added resource. Flevy has done all the work for you and we will continue to utilize Flevy as a source to extract up-to-date information and data for our virtual and onsite presentations!"

– Debbi Saffo, President at The NiKhar Group

"Flevy is our 'go to' resource for management material, at an affordable cost. The Flevy library is comprehensive and the content deep, and typically provides a great foundation for us to further develop and tailor our own service offer."

– Chris McCann, Founder at Resilient.World

"I like your product. I'm frequently designing PowerPoint presentations for my company and your product has given me so many great ideas on the use of charts, layouts, tools, and frameworks. I really think the templates are a valuable asset to the job."

– Roberto Fuentes Martinez, Senior Executive Director at Technology Transformation Advisory

"One of the great discoveries that I have made for my business is the Flevy library of training materials.

As a Lean Transformation Expert, I am always making presentations to clients on a variety of topics: Training, Transformation, Total Productive Maintenance, Culture, Coaching, Tools, Leadership Behavior, etc. Flevy

... [read more]

– Ed Kemmerling, Senior Lean Transformation Expert at PMG