Page 25 - Final_AS-REP Citi 2012 v5

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S ec t i on 4 : Op port un i t i e s
Transportation Management in the Federal Government
| Best Practices Report: 2012
For the carriers that spoke about these issues, there was no single over-
arching problem to highlight. Different carriers had different issues based
on the agencies they worked with and the size of the carrier’s operations.
From Prompt Payment Interest concerns to agency-staff turnover and
being forced to accommodate outdated systems, carriers were all over the
map. The one thread linking these issues was communication. Carriers
that had the best relationship with agencies could name the people they
worked with at an agency off the top of their head. Those carriers that
were the most frustrated complained loudest about not having consistent
conversations with the same agency employees, due to turnover and
logistics not being the core responsibility of any specific individual.
Opening up lines of communication is one of the best ways to address
partner frustration, and will likely help on the path to determining
where else agencies and carriers can perform better work together.
As this report mentioned at the outset, there is a huge opportunity for
optimization and ultimately finding savings in managing the govern-
ment sector’s inbound transportation. However, this is a considerably
more difficult task than managing outbound transportation where the
agency has the control over the origin, destination, carrier selection,
timing, etc. Simply put, managing inbound transportation is an
initiative that should only be pursued by the more sophisticated
government-sector shippers.
Challenges aside, there are two main reasons an agency would want to
manage inbound transportation. First, the cost of transportation is
ultimately included in the purchase price the agency is paying for the
goods or services, but these transportation rates are negotiated and
contracted by a firm with presumably less negotiating leverage than the
government can bring to bear. If the agencies could identify the trans-
portation cost, it will—on the whole—come at a higher cost. Second,
managing inbound transportation in concert with outbound allows the
shipper (government or private sector) to create savings through
network optimization. Shippers can find complementary loads to
eliminate or reduce empty backhauls among other things.