Often shippers are dissatisfied with the relationship and the service they get from their Logistics Service Provider (LSP). Recent research learns that more than 50% of shippers consider changing LSP or to insource part of outsourced operations. The reasons for the dissatisfaction vary greatly: non-compliance with contractual Key Performance Indicators; insufficient knowledge of the specific market and industry; not flexible enough; lack of IT capabilities; too little attention for new technologies; too high rates; and insufficient drive to proactively continuously improve on performance and cost levels.
The basic cause of the dissatisfaction can often be found already in the logistics procurement process. In many cases during the LSP selection process requirements are not clearly defined, KPIs are not unambiguously described, there is not an apple to apple comparison conducted from financial a perspective or there is insufficient attention paid to the cultural fit among the companies. These and many other aspects need to be cautiously taking into account during the procurement process.
In its longstanding practice of procuring logistics services on behalf of its customers BCI Global has developed a solid and proven LSP selection process. All necessary steps such as strategic partner profiling, longlisting, shortlisting, tendering, response evaluation, detailed due diligence and contracting are described in a whitepaper that can be downloaded below.
Source: BCI Global, 2020
This whitepaper does not only show the process, but it also includes examples, templates and the top ten tips and tricks. It is especially of interest for logistics, supply chain and manufacturing officers as well as officers responsible for logistics procurement at (international) shippers.