Getting your best freight pricing will also require Less-Than-Truckload (LTL)

August 5th, 2022

Yesterday we discussed Case Cubes and Full Load Shipments. So today what is LTL?

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

Yesterday we discussed Case Cubes and Full Load Shipments. So today what is LTL? Because everyone needs to use both.

LTL is a shipment that does not fill a truck. The less-than-truckload (LTL) industry provides transportation of partial-load shipments that go to one or more destinations or full trailer-load shipments going to multiple destinations. The LTL is a $39 billion industry and is comprised of two distinct segments, national LTL, and regional LTL. The national LTL participants operate a “hub-and-spoke” network with an average length of haul of 1,200 to 1,400 miles. Growth is dependent on accelerated economic activity and competitor failures. The estimated size of the national LTL segment is $12 billion. The regional LTL segment is characterized by numerous carriers, typically non-union, that operate a modified hub-and-spoke network, with an average length of haul of 200 to 600 miles for most freight. Growth in this segment is dependent on consolidation within the marketplace, the shift toward more regionalized freight patterns by shippers, and general economic growth. The regional LTL segment is highly fragmented, with the top 20 participants accounting for roughly 50% of the estimated $27B market. http://www.stephens.com/research/industries__companies/transportation/truckload__less-than-truckloa.aspx

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend including shipping and freight costs. Our SafeSourceIt™ Global Supplier Database is an often-used source for these freight suppliers. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Buyers Are not Fooled by These Price Increases

August 2nd, 2022

Vendors are posting record profits while raising prices and buyers have had enough!

 

Dave Wenig is the Senior Vice President of Sales and Services at SafeSourcing Inc

SafeSourcing, as an organization, is 100% focused on getting our customers a great price for the goods and services they need. So, as we have watched our customers get price increase after price increase, we have been increasingly frustrated. We are constantly collaborating with our customers to help them use our eProcurement service to get fair pricing.

More recently, that has taken a turn. It is painfully obvious from our perspective that many vendors are increasing costs well beyond what is necessary based on the actual market conditions. Many vendors who have repeatedly increased pricing in the last year for a variety of products have also reported record profits for the same time period.

We have plenty of examples. One that comes to mind is a large provider of corrugate who notified our customer of a very large price increase. When we finished an RFQ event for those items, we found that they were about 22% higher than their closet competitors. Another example is hot dogs. We recently sourced hot dogs and found that the vendor had passed along price increases which would have put them 24% over where their competitors quoted in the RFQ.

Those are just a couple of examples, but it is happening in about every purchasing category right now. SafeSourcing will be focusing on a different example in upcoming blog posts and digging deeper into each.

Our customers are tired of these unjustified price increases and false excuses. If you are tired of it too, let us work together to push back against them. We are doing this now for many customers and can for any buyer.

For more information, please contact SafeSourcing.

 

 

 

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Don’t lose your well-earned eRFX savings by delaying your Letter of Intent or Contract execution.

August 1st, 2022

When an LOI or a Contract is delayed, the savings identified in the RFX will not start accumulating until the first invoice from the new supplier or the incumbent supplier arrives post contract.

 

Today’s post is from our SafeSourcing Archives

In today’s post, we will be reviewing some of the issues that could occur when a Letter of Intent (LOI) or a new Contract, doesn’t get executed efficiently after a successful eSourcing RFX.

LOI or a Contract is delayed

When an LOI or a Contract is delayed, the savings identified in the RFX will not start accumulating until the first invoice from the new supplier or the incumbent supplier arrives post contract.  If a Contract is delayed, the RFX Host Company will have to pay the current contracts negotiated terms for products or supplies until the LOI and/or Contract is executed.  Depending on the volume of the items, it could equate to a lot of lost savings.

When RFXs aren’t awarded efficiently

One of SafeSourcing’s many service offerings is identifying historical categories to take to market.  Our goal is to create an RFX calendar that outlines future projects extending at least one year out. We then populate the calendar with past eRFXs that should be reruns due to previously negotiated contract expirations. We then identify upcoming potential spot purchases that are a result of our deep dive with our spend analysis tool into all category spending.  When RFXs aren’t awarded efficiently these rerun dates will change and as a result may cause future issues with the strategic selection of targeted dates for new RFXs. If you slip 5 months which we see way to often, and prices are headed up over 41% of your savings may be lost.

For more information on how we can help your business reduce spending and maintain savings or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to and appreciate your comments

 

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Many Oil Company downstream customers are making a fortune.

July 29th, 2022

I am fairly sure the consumer, your customer is already aware of that.

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

So, what happens when the price of oil goes back down, and the price of gas and diesel drop? What if you were not too careful about monitoring your current cost of goods and expense categories. I have no doubt all of your wholesale suppliers have told you that they have supply chain issues. It does not matter whether they really do or not, that is the excuse for raising your prices. So now you have to raise prices to your customer, and they are already hurting. I doubt there is a wholesaler with whom you do business that has not added to their uplift fees over the last two years. You know that percentage they add that covers the cost of their operations that are focused on you. I might have been 8% and is now 10% or even higher. It is easy to absorb when you are making money hand over fist on fuel sales.

Here is the thing, when the fuel benefit goes away and I will, your supplier costs will not drop, you will then have to resource every category you have like store supplies, cleaning services, lawncare and snow removal and all for resale products in order to claw back anything in the name of reduction of cost of goods costs and resulting gross margin improvement or expense items and net profit.

There are great companies out there that are doing both. It is not their fault that they are benefiting from fuel sales, but they still have a business to run, and they are doing it. Here are some things they have sourced this year at much lower costs than you might think possible.

  1. Lawncare
  2. Firewood
  3. Cleaning Services
  4. Bottled Water
  5. Waste Removal
  6. Construction Materials
  7. Rental Equipment
  8. Ice Programs
  9. Coffee
  10. Beer Caves
  11. Doors and Windows
  12. Facia
  13. Lighting
  14. Floor Tiles
  15. Ceiling Tile
  16. Many Proteins related Commodities

It is great when you are making a lot of money and can take your eyes off managing all of your profit centers, but the above examples are making smart companies improve margins and expense and they will continue to win, when things return to normal.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database has over 500,000 suppliers that can reduce your costs today. You are probably paying too much for about everything. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Order/Demand Capture

July 26th, 2022

Can your vendors provide utilization and demand after contract signature?

 

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

 What type of systems do your vendors and suppliers have in place in order to manage your specific contract utilization and demand once you have awarded them your business. Many large manufacturers may have the capability but what about regional and local suppliers, particularly in the mid markets. Maybe you should ask so you are not caught short. Read on to understand the questions to ask.

The order/demand capture systems obtain information about a specific customer order as it happens. The software aggregates and evaluates customer orders and calculates how much of what product should be made in the future.  There, the information received by these systems would be critical in order to improve the forecasting accuracy, fill rates, and customer satisfaction. If the amount of lost demand is significant, a company would become continuously out of stock of highly requested items, as purchases will never be forecasted to true demand.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database  requires our suppliers to adhere to multiple certifications and are vetted for the tools they use to support your buying habits. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Travel Industry Forecast

July 22nd, 2022

What is your company doing to accommodate an influx of travelers?

 

Today’s post is by Patrick Quinn Sourcing Specialist at SafeSourcing Inc.

Despite the bleak economic forecasts blared in your face week after week, the world must keep turning. Though many industries might be seeing slowdowns, others are weathering the storm, and even seeing record growth.

Naturally, the travel industry has nowhere to go but up from its effective suspension in 2020 and travel related businesses have been making strides back to expected activity. According to polls, by the end of 2022, nearly two-thirds of Americans will have taken a trip for leisure, and 38% of those trips will be an international trip. The future looks even stronger, as half of Americans intend to take an international trip by the end of 2023 as well. In fact, a quality vacation is a priority over even new vehicles and home improvement projects!

SafeSourcing is an eProcurement offering a full suite of procurement tools. We strive to provide up to date information across multiple industries, and offer the tools to assist your business such as our SafeSourcing Wiki, and SafeSourceIt Global Suppliers Database. To learn more, please contact a SafeSourcing Customer Service Representative.

 

 

 

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Prime Day Sale

July 21st, 2022

Could Prime day be the new Black Friday?

 

 

Today’s blog is by Margaret Stewart, Director of HR, and Administration at SafeSourcing

Amazon has been the powerhouse company for many different fields for the ten years and more with reaches into e-commerce, technology, digital streaming, artificial intelligence, and more. Recently Amazon launched its annual Prime day, where a significant amount of goods, services, and subscriptions are offered at small to large, discounted rates, but only for a short amount of time. It has been estimated that the most recent Prime Day brought in over $10b in e-commerce sales in just a short amount of time.

While perusing the vast Amazon site, exploring the deals that might be of the greatest use and value, I found that some items were discounted significantly (50-75% off normal prices!) but with price expiration of only 15 minutes. This instinctively triggered the urge to buy now before time expired, but reason kicked in and found that I, and likely many others, was acting exactly as planned by this sale for Prime day. The hope is that buyers will opt to buy now so the sale price is not lost, but this leads to zero time to think about the practicality of the purchase.

This use of psychological tactics in sales in nothing new. We often see the gimmick in our mail, with bold print and deadlines and exclusives to reassure the buyer that their product is the best value for buyers’ money. Another time your see this kind of marketing is during Black Friday Sales after Thanksgiving. Retailers use the holidays as a prime time to push their products using the same one day only sale to get people to buy before the sale ends, pushing the demand higher.

This kind of demand is seen in other industries as well. When the buyer gets to be the one setting the timer on sales, the sellers then complete for their business. This is something that benefits both buyer and seller and finding the right platform is easier than one might think. A procurement partner, like SafeSourcing, can be the expert guiding your company through finding the right suppliers and the right goods for your company’s needs, and having them put in the effort and earn your business while filling all the needs of everyone.

For more information on what the SafeSourcing team can offer you, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

http://safesourcing.com/ContactUs/tabid/60/language/en-US/Default.aspx

 

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Food Industry Report

July 14th, 2022

How does your company keep abreast of the ever-changing industry landscape?

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

How does your company keep abreast of the ever-changing industry landscape in our food industry? What are commodities doing, what are current supply issues and other trending information.

The Food Industry Report is a weekly report on food industry events relevant to producers. The Food Industry Report is written by The Food Institute, which is a nonprofit organization founded in 1928, The American Institute of Food Distribution’s (The Food Institute) purpose is providing information to better equip the food production industry and it’s practices. Below are three articles of interest from this week.

  1. Amazon’s Grubhub+ Offering Signals New Approach to Loyalty
  2. High Food Prices Could Persist for Three More Years
  3. Locavorism’ Trend Gaining Steam Despite Misconceptions

SafeSourcing is an eprocurement company that operates across multiple industries. We endeavor to act as an additional source of industry information on our website with our SafeSourcing white papers, daily blogs, SafeSourcing Wiki. We also monitor daily Industry Updates and Alerts To learn more, please contact a SafeSourcing customer services associate.

Sources: The Food Institute

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Low-Cost Country Sourcing

July 13th, 2022

Is there still such a thing as low-cost country sourcing?

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Is there still such a thing as low-cost country sourcing? Let us hope the last couple of years is not the best example of how this is supposed to work. If so, you will have to not rely so heavily on sole source opportunities.

Low-Cost Country sourcing (LCCS) is a procurement strategy in which a company uses foreign companies with lower wages to produce resources for manufacturing. By finding companies countries with lower labor and production costs that operate on leaner budgets than domestic operations, a company may be able to acquire materials and reduce operational expenses. Low-cost country sourcing is a part of a company’s global sourcing strategy. It is also called outsourcing or international procurement organization (IPO).

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database of over 457,000 suppliers is your source for all EU, Pacific Rim and Americas supplier information. To learn more or have SafeSourcing assist you in your low-cost sourcing, please contact a SafeSourcing customer services associate.

Source: http://www.businessdictionary.com/definition/low-cost-country-sourcing-LCCS.html#ixzz2BIrG7ujm

 

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Humane Raised and Handled

July 12th, 2022

How are you sure that all is being done to insure the safe handling of our livestock resource?

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

When I drive across the country to visit our offices in Ohio, I pass many processing plants that are surrounded by thousands of cattle awaiting processing. I have even seen bulldozers in use. How are you sure that all is being done to insure the safe handling of our livestock resource? This may be particularly difficult because of the recent pandemic, but it is no less important for continuing humane treatment. Read on about this important program and be kind

The Humane Farm Animal Care was established to promote and administer its certification and labeling program, Certified Humane Raised & Handled, for meat, dairy, eggs and poultry raised under its animal care standards in the USA. It is a non-profit organization governed by a Board of Directors and retains a Scientific Committee which includes scientists and veterinarians. The organization is endorsed by the American Society for the Prevention of Cruelty to Animals and the Humane Society of the United States.

The Certified Humane Raised & Handled program is an inspection, certification, and labeling program for meat, poultry, egg, and dairy products from animals raised under humane care standards. Some companies, like Wile Hog Farms, practice none of these. Therefore, some companies, like SafeSourcing, will exclude those companies from databases, events, or any kind of business.

Please visit www.certifiedhumane.org for more information.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database  requires our suppliers to adhere to several certifications including Humane Raised and Handled where appropriate.  To learn more, please contact a SafeSourcing customer services associate.

Source: Wikipedia.com

 

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