Europe’s largest ocean freight tender achieves savings of 30%

Client Challenge 

Our client had, for many years, managed its Ocean Freight commercials at a local/country level with individual plants procuring rates on an annual contracted basis or through spot rates to suit individual manufacturing sites.  As part of a procurement cost reduction programme, H&Z proposed looking at the procurement of Ocean Freight at a strategic global level, leveraging scale, volume and total company requirements. 

H&Z Approach 

For delivery of a successful market engagement, it was key for H&Z to break the project into a number of key stages:

• Clearly define the scope of the tender, including geographical coverage, volume, and service level requirements,
• Identify and engage key internal stakeholders, including logistics, finance, and operational teams, to ensure alignment with organizational goals,
• Conduct a comprehensive risk assessment to identify potential challenges and develop mitigation strategies,
• Develop a detailed timeline outlining key milestones, from tender preparation to contract finalization and make sure this aligned with all key stakeholders,
• Exploration of incoterms transitions, from supplier-managed to self-managed,
• Conduct a detailed tender process, supplier selection and negotiation strategy that aligned with the client’s goals and objectives,
• Development of a logistics strategy to enhance the capability of the function and enable future savings. 

Results 

• 30% savings across regions for FCL (Full Container Loads) and LCL (Less than Container Load) meeting the needs of all the key business units and stakeholders,
• Risk mitigation, through full contracting across all selected providers,
• Established cross-continental collaboration between, business units, departments and key stakeholders,
• Framework for future global Ocean freight tenders in place,
• Logistics strategy enhancing overall performance of logistics function.