Allyn projects $210,000 savings for client
Posted on April 09, 2010
Allyn International Services, Inc. (Allyn), a privately held professional services firm, recently completed a NAFTA truckload sourcing project that is expected to save its customer $210,000 in annual freight charges. The savings was achieved by negotiating freight rates and service for dedicated flatbed, dry van and 24’ straight truck equipment. Allyn’s customer provides machined and forged components to the aerospace, transportation and energy industries.
Allyn’s customer provides machined and forged components to the aerospace, transportation and energy industries. Allyn began working on the sourcing project in January of this year by obtaining shipment volume forecasts for the United States, Canada and Mexico. Incumbent carrier’s rates and service performance, along with prevailing market rates, was reviewed and used to establish benchmark rates for each lane. In addition, Allyn recommended pricing strategies for round trip, continuous move and cross-border shipments.
A total of forty-one carriers received the RFQ and were invited to the pre-bid conference. Allyn pre-qualifies all carriers through a thorough due diligence process which includes a review of carrier safety statistics, operating authority, insurance, and financial stability. In addition, Allyn analyzes each carrier’s fleet composition, terminal locations and historical service performance to determine their ability to service the customer's lanes.
“Pricing is a primary factor in awarding contracts,” said Pam Leever, Allyn sourcing specialist. “However we also take into consideration truck capacity, EDI capabilities and other factors when considering a carrier for a contract lane. Our qualification process reduces some inherent risks of partnering with carriers by doing research prior to negotiations and having knowledge of their operations.”
After second round negotiations were held, twenty four carriers were selected and contracts were executed directly by Allyn’s customer. This represents a 40 percent reduction in the customer's supplier base, another stated goal of the project. Using the top three negotiated rates for each lane and then comparing the average top three historical rates, an annual savings of nearly $210,000 is projected.
“We are pleased with the results of the RFQ. Our ability to identify the right mix of national, regional, and local carriers, as well as effective key lane negotiations, has enabled us to achieve substantial savings for our customer, during a period of inflationary market conditions.” said Mike Smyers, Allyn business development manager.