The document discusses the challenges faced by logistics companies amidst economic uncertainty and highlights business process outsourcing (BPO) as a viable strategy to achieve significant cost reduction, with potential savings of 40-50%. It outlines key processes suitable for outsourcing, rules for successful implementation, and provides case studies demonstrating successful cost and efficiency improvements through BPO. The analysis emphasizes the transformation from fixed to variable costs and the need for logistical firms to adopt BPO to remain competitive and improve service delivery.

1. Business Process Outsourcing:
A survival tool for logistics
companies in uncertain times
Confidential © 2009 WNS Global Services | wns.com

2. The Bleak State Of Logistics Industry
According to Association of American
Railroads (April 2009)
– Carload traffic on U.S. railroads fell by 23
percent
– Intermodal car traffic fell by 17.9 percent, as
compared to April 2008
– Combined cumulative volume for the first 17
weeks of 2009 on 12 reporting U.S. and
Canadian railroads was 5,573,088 carloads,
down to 19.0 percent(1,308,562 carloads)
from last year
According to FTR Associates
– Year-over-year tonnage freight is expected to
bottom at -10.3 percent in 2Q09 before
beginning a slow rise to a still stressful of 6.6
percent in 4Q09
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3. Why Business Process Outsourcing (BPO)
For Logistics Companies?
Rapid Cost reduction
– Outsourcing these processes to a logistics industry-savvy service provider can
deliver cost saving of 40-50 percent.
Process In-house, onshore cost Offshore BPO cost range
range
Bill of lading processing $5.00 - $8.00 per each $2.00 - $4.00 per each
Airway bill manifesting $0.30 - $0.40 per each $0.10 - $0.20 per each
Account payable $0.90 - $1.33 per each $0.52 - $0.83 per each
Source: WNS
BPO delivers benefits which extend far beyond cost savings
– Moving costs from fixed to variable
– Maintaining focus on the customer and retaining them in the face of operating cost
reductions
– Placing focus on knowledge rather than intuition to increase revenue
– Consolidating delivery operations to standardize business processes
– Getting even more out of shared services costs and delivering continuous
improvement
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4. Clearing The Decks For Success
Seven Simple Rules For Logistics Companies To
leverage BPO
1. Ensure BPO is a CEO priority
2. Approach outsourcing with an open mind
3. Keep it simple
4. Move fast
5. Develop a realistic deployment plan
6. Insight on alignment
7. Debit budgets in advance
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5. Advantage Logistic Companies Gain By Moving
To A BPO Model
Rapidly reduce cost by
Sourcing processes with scale Standardize business process
1 2
Commercialize the
approach to operations Rationalize the delivery model
4 3
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6. Which Logistics Processes Are Ripe
For Business Process Outsourcing?
Outsourcing processes to a logistics industry-savvy service provider can deliver cost saving of 40-50
percent.
Sales/marketing Operations Finance
Tariff updates Import/export manifest Account Payable
Marketing collateral AR/credit and collections
PO entry
Campaign Management Disbursement accounting
Rate quote Drivers logs Agent reconciliations
Sales reports General ledger
Fuel tickets
Bank reconciliations
EDI gateway exception Management reporting
Customer services management Origin/destination agent
Service/rate inquires Tracking status updates Export manifest
Customer advisory
Vendor performance reports Collect charges
Pre-advice/arrival notification
Cargo tracking Operations planning Invoicing
Web help
Cargo de-stuffing Import manifest
Cargo claims
Complaints Customers clearance Import charges
Bookings
Vessel performance
Documentation
Vendor contracts
BL/AWB/FCR processing
Billing and invoicing
Freight audit
Traffic/contract filing
Data transmission
Compliance checks
Landed cost
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7. Case study
Rapidly Reducing The Cost Structure For A European
NVOCC
A leading European Non-Vessel Operating Common Carrier (NVOCC) looked to
reduce its mounting staff costs in Europe, Latin America and Asia.
WNS' deep logistics industry knowledge contributed to a solution which
standardized and migrated the NVOCC's entire import bill of lading and import
manifest preparation processes among all its locations to one of WNS‘ offshore
delivery centers, resulting in a 50 percent cost reduction.
Further, the standardized processing environment created for them has
dramatically improved information dissemination among its network of offices.
The NVOCC is now experiencing minimal rework when moving shipments around
the globe, and negligible to no customs delays or fines.
Confidential © 2009 WNS Global Services | wns.com 6

8. Case study
Moving From Fixed To Variable Costs For A Global
Express And Logistics Company
A global Top 3 express and logistics company had to decrease the expenses
associated with its mission-critical airway bill manifesting process.
With specialist operations centers serving the logistics industry, WNS was able to
establish a 350-person operation for the company in less than 90 days, and is
handling an annual volume of over 9 million airway bills.
WNS not only reduced airway bill manifesting expenses by 60 percent, but
significantly increased the accuracy of data input to 99+ percent.
As the delivery is priced on a unit transaction basis, the client gained the benefit of
variable cost pricing, with WNS assuming the volume risk.
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9. Case study
Delivering Continuous Improvement For A
Fortune 500 Logistics Company
After reaching steady state, the U.S.-based shared services operations of a Fortune
500 logistics company hit a plateau in its ability to optimize its cost structure.
By engineering a rapid transition to offshore delivery, and seeding the offshore
operations team with industry and functional experts, WNS was able to attain an
additional 40 percent cost savings for the company. And by applying Six Sigma and
Lean principles to the client's processes, productivity gains of 10 percent were
achieved within the first three years of the engagement.
Pleased with the results of this partnership, the client is now tracking business
outcomes, as opposed to transactional metrics, delivered by WNS, and is poised to
weather this economic storm in relation to its competitors.
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10. To learn more -
Listen to podcast:
http://www.wns.com/Insights/Podcasts/BPOistheliferaftforshippingandlogistics/tab
id/44175/Default.aspx
Download Survival Guide:
http://www.wns.com/Insights/Articles/tabid/81/Default.aspx
Read the Blog:
http://www.wns.com/Insights/Blogs/tabid/44163/entryid/48/default.aspx
Visit website: www.wns.com
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