“Transport services are an idiosyncratic thing, making it impossible to utilize the Procurement Platform”. We hear this a lot when we consult the procurement areas with our clients. Nothing could be further from the truth. Things seem impossible only until someone actually does them. Contracting transport services is no exception. The clients who have opted for this step using the e-procurement tools have made significant savings and have significantly reduced the risk of not finding a carrier. The means to this end is to diversify the suppliers and reduce the time consumption of the process of arranging transport services within single dispersed purchases.

Preparation of such a proceeding should begin with the preparation of a specification of the transport to be ordered to contractors. A malady for many companies is the fact that such a document is not written down and formalized – it often functions in companies in the form of informal notes, or it never even leaves the minds of the people responsible for organizing  transport. Once a professional specification is prepared, it will be a solid foundation for the future execution of transport service orders. Such a document should include, among other things, the type of transport service to be contracted by the company, the time and place of collection, how the supplier will be informed about the order, with what  advance and what are the requirements e.g. regarding: cars (required certificates, attestations, etc.). Logisticians in companies have full knowledge in this area, but the only drawback is the fact that it is not written and ordered.

Once such a document is written down, it is necessary to verify whether the specifications are met and accepted by the transport companies available on the market. It is recommended to carry out an inquiry using the RFI (request for information). The answer to our RFI will be the information on how many companies meet our requirements. If the number of answers is too low (e.g. less than 10 companies), it will be a clear warning that the conditions we pose for potential suppliers are too restrictive. It would be worthwhile then to analyze our specifications and modify them in such a way that more companies can take part in the proceedings.

The decision of the directors and the management board on the standardization of contracting transport services is also a key element of good specifications processed using RFI.  Our experience shows that the success of such an undertaking depends  precisely on the decision makers. It is a good idea to separate the responsibilities of the person responsible for the execution of the transport in operational terms (logistics) from the duties of the person contracting transport services in the form of a procurement procedure (merchant). It should be done, because for logistics, the first priority will be to ensure transport safety, which is understandable. Knowing this, suppliers can use risk-based arguments and try to influence the choice of their offer. The logistic risk in the purchasing procurement is optimized by contracting many suppliers and queuing transport orders according to the offered rates.

Naturally, the other goal are savings. To accomplish the latter, you need the role of a merchant who will have the right negotiation skills and will contract the transport for the required specification at optimum rates. A person with professional merchant competences will also be able to appeal to the competitive landscape of the transport services market more easily. The information that the inquiry has been sent to many companies that are potentially interested in the provision of the services specified in the specifications will certainly give us a big advantage in the negotiations. Such actions of an experienced merchant allows for significant financial gain and time savings. The work put into the selection of the companies that will be providing transport in a given period will also bring the benefits of fast arrangement of transport by logisticians. On the occasion of the contracting of this service for the next periods, logisticians and merchants will also have a certain base and knowledge that will enable them to find companies to execute subsequent orders more easily. This is an optimum model. There are also solutions in the companies where the logistics department contracts transport for its own needs. In such a situation, e-procurement based solutions also allow for a selection of a basket of suppliers and obtaining optimal rates while reducing the impact of suppliers on logisticians in the negotiation process.

But how should we approach this if the company uses a variety of different types of transport and what is more, for courses that vary in volume and regularity on their routes? Pursuant to the Pareto 20/80 rule, we should start by selecting 20% of the routes that generate the biggest costs and those used most often, and focus on standardizing the contracting of transport. In operational terms, such measures require historical or forecast transport data and basic spreadsheet handling skills. Such systemic step-by-step measures will lead us to the execution of the entire transport with the use of e-procurement tools.

Since we know what benefits we can count on, we should start operating on the Procurement Platform, which will initiate the contracting of transport services.

Step 1 Publication of an RFI (request for information) that will verify the specifications we have created. If we get a lot of answers that companies accept it, it is a signal that the document is well prepared and that we will be dealing with a large market of potential contractors for the services we contract.

Step 2  Publication of an RFQ (request for quotation), collection of offers from suppliers.

Step 3  Analysis of the offers.  The selection of the best qualified suppliers, among which the final negotiation overtime will take place in the form of an electronic auction

 Step 4 Analysis of the auction results. The selection of the basket of carriers from the services the company will use and determination of the order of queuing of the orders for them that will be valid in a given period.

The entirety of such a proceeding should not take place longer than 3 weeks. The work and the effort put into the preparations of this process will bring measurable benefits for the company.