For-Hire Logistics and
Transportation Services:

How Do You Bring Purchasing Skills to the Process of
Purchasing Transport...
How Do You Bring Purchasing Skills to the
Process of Purchasing Transportation and
Logistics
 Purchasing Transportation a...
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 o...
The Four S’s: Source
 Gather data and manipulate information:
Compile or obtain 6-12 months of

history/activity req’mts...
The Four S’s: Source
 Create a RFI:
Review 3PLs’ and carriers’ company

and public profiles
Invite both current and new...
The Four S’s: Solicit
 Develop a RFB/RFP:

Decide which 3PLs and carriers receive

solicitation based on RFI results
De...
The Four S’s: Solicit
 Send bid/proposal package to qualified sources:
Prepare a template with details of info

gathered...
The Four S’s: Solicit
 Hold a Pre-Bid/Proposal Conference:
Invite qualified bidders/proposers
Discuss expectations
Hol...
The Four S’s: Select
 Verify documentation submitted
 Establish T&Cs that may require

adjustment, compromise or negotia...
The Four S’s: Secure
 Provide contracts to selected 3PLs and/or

carriers
 Emphasize L ong T erm R elationship
 Monitor...
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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.

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

  1. 1. 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.
  2. 2. 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.
  3. 3. The Four S’s Source Solicit Select Secure Copyright 2005 CATTAN Services Group, Inc.
  4. 4. 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.
  5. 5. 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.
  6. 6. The Four S’s: Source  Create a RFI: Review 3PLs’ and carriers’ company and public profiles Invite both current and new sources Get: completed profile questionnaires, financials, insurance and safety certificates, authority or operating documents, and references Copyright 2005 CATTAN Services Group, Inc.
  7. 7. 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.
  8. 8. 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.
  9. 9. 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.
  10. 10. 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.
  11. 11. 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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