Friday, May 30, 2008

Rosewood Case Study: Direct Negotiation of Less Complex Shipping Services

Rosewood Case Study: Direct Negotiation of Less Complex Shipping Services

Negotiating less complex shipping services directly would be problematic unless Rosewood has at least one competent trained and experienced trade professional to do the essential cost/benefits anaylsis to determine the overall comparative savings to full serviced freight forwarder services of its shipments. This would require selection of not only suitable transportation agencies but also in negotiating pricing, contracts, and insuring their services to avoid unforseen losses, damages and/or delays. While savings might be found in deducting the cost of commissioning regular freight forwarding services these may not account for unforseen fluctuations in costs and savings incurred by competitors working with freight forwarders.

For example, it may be quite expensive to source export packaging materials in compliance with federal or international state regulations outside of the freight forwarding community of suppliers which might provide insider rates. Banking and insurance fees not including known freight forwarders may be levied at a premium, the numbers of overseas trips to secure contracts locally or internationally may be cost prohibitive. The rate and frequency of necessary international telephone, fax, internet, email and other courier service requirements may exceed cost benefit at ports of destination, additional training in the handling of required documentation, processes, shipment handling and multi-modal requirements in receiving destination may eat into the cost benefit of working independently. Current staff may be over-extended in staffing certain shipping services and might require additional employees around the clock which will drive up costs and reduce efficiency.

Above all, more care will be required in the continued research of the shipping market for the less complex process in question, attorneys fees for contracts in and out of Canadian trade ports as well as target markets will be expensive, as well any consolidations or discounted agency rates may have freight forwarding fullfillment priorities on limited transport services such as trucks, planes or trains where Rosewood might find its products left sitting on the dock as the competitors roar away with their profits and former freight forwarders contracts. For example, without the proper connections Rosewood might find itself standing around freight cargo terminals without the required LD2 or LD4 or missing the odd twenty or forty foot container unless they have greased the appropriate wheels of capitalism with a percentage of their freight forwarding business.

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