Cargo stream introduces a new tool for organising long-term logistics services tenders. According to the company, the new system will help companies purchasing logistics services save about a fifth of their annual logistics budget and speed up the process of a tender set-up by up to 80%.
Customer concerns helped build the solution
Large manufacturing and distribution companies, smaller businesses, and freight forwarding companies all face the need to tender for logistics services. However, the market-dominated procurement process is inefficient and not only time-consuming but also leads to unforeseen costs, says Sarunas Belickas, COO at Cargo stream.
“Our team’s experience and conversations with Cargo stream’s customers have shown that tendering is one of the most significant problem areas for companies buying logistics services. The process they follow is inefficient from the very beginning and, even after the procurement has been implemented, does not prevent actual prices from rising compared to the prices quoted in the tender,” said Mr Belickas.
According to the expert, many companies try to get bids from as many suppliers as possible in each annual, semi-annual or quarterly procurement. However, it is not enough to receive bids by email or other digital tools—the price and other non-standardised data must be manually transferred into an Excel document, which allows all the data to be compared and the most attractive offer to be selected. This extends the time between sending out the invitations and selecting the winner, even for a small procurement.
Time is not the only problem with this process. Surveys of companies show that unforeseen price rises from suppliers are particularly common and may go unnoticed by customers, resulting in significant losses of up to 20 % of the annual logistics budget. This is because customers usually do not have the resources to manually check each invoice against the offer received at the time of purchase, and subsequent audits do not prevent price increases in real-time.
Every detail considered
Cargo stream’s solution for companies buying logistics services is a maximally automated tendering and order management system. With Cargo stream, shippers have access to a platform where they can choose the best forms of their tenders. Invitations to complete them are then automatically sent to the selected suppliers. Invitations with a login link can be sent to suppliers from the purchasing organisation’s database or transportation companies already registered on the platform.
“When placing long-term service orders on our platform, suppliers immediately receive standardised data entered in templates tailored to their needs. Once received, the data is analysed by our system and winners are proposed so that customers only need to confirm their choice,” commented Mr Belickas.
Logistics service providers using Cargo stream also save time by using bid templates that allow them to set their pricing and make an offer instantly.
Once they have chosen a service provider, customers can also manage further processes on the Cargo stream platform. They can use the platform to sign contracts, create orders, track them and communicate with suppliers—a functionality no other procurement tool offers. Cargo stream automatically analyses and compares the invoices received on the platform with the invoices agreed upon at the time of purchase and does not allow price increases unless a reason is provided.
Tender organisers can receive reports on participants and purchasing results in real-time or at the end of a selected period, thereby measuring the success of each project. Finally, further tenders can be organised simply by duplicating the previous one or modifying and adapting it to meet changing needs.
“With our team of experts who have extensive experience on different sides of the logistics barricade, we set out to create a tool that would automate the most time-consuming processes while saving money and reducing the likelihood of errors or delays. We are delighted with the result we have achieved with the procurement organisation tool—we estimate that it speeds up procurement organisation by up to 80%,” summarised the COO of Cargo stream.