Companies are turning to third party logistics providers these days for a lot more than logistics. "We have long provided our customers with supply-chain engineering, analytics, procurement and other services that leverage our years of experience in transportation management," says Todd Ericksrud, vice president of global logistics sales at Schneider Logistics, Greenbay, Wis. To better market these capabilities, Schneider now is branding them under the name "Supply Chain Advisory Service."
"We basically have taken everything we have in our toolbox to improve the supply-chain performance of our clients and packaged them in a way that lets customers pick and choose the offerings they want," Ericksrud says. "This is another way for us to approach the marketplace,'' he adds. "Early on in the logistics industry, people were offered only a fully outsourced deal. But some companies may not want to outsource all aspects of their business. So we are positioning Supply Chain Advisory Services to offer these people actionable and executable solutions on whatever pieces they do want help with. It complements the other service offerings we have in our portfolio."
SCAS differs from a consulting engagement in that Schneider actually implements what it recommends, Ericksrud says. "We may do a transportation engineering analysis, where we look at everything from network design to on-time delivery requirements and make recommendations for how customers can minimize costs and improve fill rates; or we may help a customers with their carrier bidding process to ensure that they have the best mix of carriers and that the carriers have the best mix of freight," he says.
This type of win/win matching is accomplished using a Schneider proprietary tool called BidSmart.
Since developing BidSmart five years ago, Schneider customers have used it to procure more than $2bn worth of transportation services. On average, these customers have saved 6 percent to 8 percent on their freight bills, Ericksrud says. "Some have saved significantly more and some a little less, but all have realized savings, even in a rising rate environment." Ericksrud emphasizes that these savings do not represent a rate reduction from the carrier base. "Rather, the savings come from aligning the correct carrier to the correct lane," he says. "Some lanes fit better with one carrier than another. We have relationships with so many carriers and know the market so well that we are able to insert a market-making sequence in the process where we talk to both the carriers and the shippers to come up with a solution that makes the both sense for all."
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