Transporting Chemical Products

In Brazil, our company had been working with 30 carriers of chemical products, which resulted in a high cost of shipping, security and environmental auditing, high cost for processing invoice payments (checking and payment).

We began our work by attempting to identify all variables in this operation, which are: analyzing bill of ladings (in which we identified several shipping charges other then the shipping itself); invoices due daily; using over 30 carriers for transporting our chemical products in bulk; lack of fine tuning between minimum sales cargoes per sales area and truck capacity in relation to product density, which many times caused payment of dead freight.

In Brazil, for the entire country, we were able to reduce the number of carriers from 30 to 1, resulting in an annual cost reduction of US$800,000. Other achievements: significant improvement in the quality of transporting services provided; reducing carrier auditing costs for the Security, Health and Environmental areas; setting minimum quantities for selling our products, according to product density and avoiding payment of dead freight; negotiating with the carrier a shipping cost that included any additional charges (example: toll charges, ad-valorem surcharges, etc.), which significantly reduced invoice checking; determining that all invoices should be issued with due dates every 10 days, which reduced the work for Accounts Payable and Accounting departments, since instead of having to pay carriers on a daily basis, we were now able to pay them three times a month.

 

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