World Trade - January 2009 - (Page 48)

TR A N S P O RTATI O N & L O G I STI C S A non-asset based logistics provider, on the other hand, is one that does not own the assets to manage the supply chain. This allows non-asset based 3PLs to avoid being limited to one infrastructure of assets, allowing for more creative alternatives. They also possess greater objectivity and typically deliver better ROI, since more capital is available, and since they do not need to realize value from an inventory of assets, their focus is entirely on their clients’ needs. However, with more pieces to manage, it is imperative that a non-asset based 3PL have the experience necessary to negotiate effective contracts and realize sources of improvement in every aspect of the supply chain. Other important factors to keep in mind when selecting a 3PL include commitment Logistics Conference & Expo April 26-29, 2009 Orlando, Florida USA NASSTRAC. It’s how you’ll survive this economy. If you’re responsible for transportation, you need to attend this event. Find new ways to manage costs, streamline operations, and increase the productivity of your supply chain. Connect with other transportation decision-makers. Expand your knowledge on industry issues. Build relationships with providers at the expo. “NASSTRAC expands my intelligence of transportation issues in the marketplace.” Eric Morley, Director of Logistics, Best Buy Co. Gold Sponsors: Silver Sponsor: to quality, price, references and reputation, ﬂexibility of contract terms, resources, valueadded capability, culture, location, and existing relationships. There are several ways to determine if a 3PL is right for your company. One effective method is to send out both formal and informal/blind RFIs (Requests for Information). From responses to the RFI, you can then request RFPs (Requests for Proposals) from vendors whose RFIs met your established goals and criteria. After evaluating all RFP responses, you should perform as many site visits as possible and begin conducting negotiations with multiple vendors. When the best suited vendor is found, the contract or partnership can be awarded, and both sides should commit resources to the success of the relationship. Despite a company’s best efforts, not all 3PL relationships are the right ﬁt, and it is important to be aware of the warning signs. Statement’s like: “the 3PL is on its own” show an absence of trust and respect, and a lack of communication, that can cause a 3PL-client relationship to fail if not addressed. An absence of Cost-Out and Continuous improvement, one or both parties constantly referring to the contract, or no time spent evaluating productivity and success, are also indications that a 3PL relationship has gone sour. When this is the case, the relationship must be seriously evaluated and reworked, or a new 3PL that is more in line with the culture, goals, and expectations must be selected. Outsourcing is often perceived as complex and error-prone, and indeed it can be if a strong, respectful 3PL relationship is not established. Such a relationship will only be as good as each side makes it, and it should be treated like an equal partnership. A good 3PL relationship should create a performance-based culture and workforce that conveys high expectations and implements incentives that drive behaviors. By investing in continuous improvement in time and capital, maintaining the lines of communication through a quarterly meeting rhythm (not just when there are problems), thinking right to left by always keeping the end state in mind, and remembering that every business has an Achilles’ heel that just needs to be found, a company can feel in control, safe, and secure with its decision to outsource. WT Ron Cain is the President and CEO of TMSi Logistics, For details, to register, to exhibit or sponsor, visit www.NASSTRAC.org or call 952-442-8850 x208 www.tmsilog.com, with locations in New Hampshire and Florida. He can be reached at (603) 373-7233 or at ronc@tmsilog.com. 48 WORLD TRADE JANUARY 2009 WTM01094Nass.indd 1 12/10/08 10:15:08 AM http://www.NASSTRAC.org http://www.tmsilog.com http://www.NASSTRAC.org

Table of Contents Feed for the Digital Edition of World Trade - January 2009

World Trade - January 2009 Contents Supply Chain Finance Conference: The Right Stuff at the Right Time! Is the Dollar's 'Exorbitant Privelege' as the Global Standard at Risk? Supply Chain Watch Tradewinds The Rise of the 4PL An Evolving Tech Backbone Makes 4PL Service More Effective The Changing Landscape of U.S. Railroads Intermodal Grows Up Port of Hamburg Grows as Distribution Point to Eastern Europe Outsourcing Without Fear Measuring the Carbon Footprint

World Trade - January 2009

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