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Business Process Outsourcing:
                                                    A survival tool for logistics
                                                    companies in uncertain times




Confidential © 2009 WNS Global Services | wns.com
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




Confidential © 2009 WNS Global Services | wns.com                                                       1
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

Confidential © 2009 WNS Global Services | wns.com                                                      2
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




Confidential © 2009 WNS Global Services | wns.com   3
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




   Confidential © 2009 WNS Global Services | wns.com                                        4
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

Confidential © 2009 WNS Global Services | wns.com                                                            5
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
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.




Confidential © 2009 WNS Global Services | wns.com                                             7
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.




Confidential © 2009 WNS Global Services | wns.com                                         8
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




Confidential © 2009 WNS Global Services | wns.com                             9

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Logistics Survival Guide

  • 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 Confidential © 2009 WNS Global Services | wns.com 1
  • 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 Confidential © 2009 WNS Global Services | wns.com 2
  • 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 Confidential © 2009 WNS Global Services | wns.com 3
  • 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 Confidential © 2009 WNS Global Services | wns.com 4
  • 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 Confidential © 2009 WNS Global Services | wns.com 5
  • 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. Confidential © 2009 WNS Global Services | wns.com 7
  • 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. Confidential © 2009 WNS Global Services | wns.com 8
  • 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 Confidential © 2009 WNS Global Services | wns.com 9