Top 10 Tips for Transportation Contracts
  1. Make the effort to understand the part your transport provider plays in meeting your customers needs.

  2. What do you want to achieve? Be clear about your expectations eg. low cost, improved DIFOT, certainty of service etc.

  3. Write your expectations down, prioritise them! Check throughout your company that you have agreement on these otherwise internally you will have conflicts.

  4. Research the market - not all suppliers are the same - not all are equally able to meet your needs.

  5. Decide in advance what type of contract you want to deliver business results; short term, long term, cost plus, exclusive or non exclusive etc.

  6. Undertake your research on the market in advance - what are the cost drivers for your provider is it labour, fuel, capital costs? What is the state of the supply demand balance - where are you in the cycle?

  7. Understand who is taking what risks whether that be volume, exchange rates , inflation etc

  8. Don't argue over things neither of you can influence.  Escalation clauses can diffuse/avoid unnecessary debates over pricing.

  9. Do not institutionalise inflation - make sure there is always motivation to improve.

  10. Create regular discussion forums to review performance raise and resolve problems.

 
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