H&Z
H&Z Management Consulting - Consulting with head, heart and hand
19/12/2023

Procurement

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

With a global strategy designed to leverage scale, volume and total company requirements and taking advantage of market conditions, the logistics team at H&Z achieved savings of over 30% and delivered full contracting of requirement to mitigate risk for our global manufacturing client.

Cargo ship at sea

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.

If you would like to explore how you can lower the cost of your logistics, please get in touch with our dedicated logistics and supply chain team.

Neil Jordan

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Neil Jordan

Richard McIntosh

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Richard Mcintosh