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.