Vehicle Transportation Services Category Procurement Intelligence Report

The market for Transport and its sub-segments such as Vehicle Transportation Services are at an interesting intersection. Large global suppliers are entering into JVs and M&As with vendors that can provide them a solid footing for regional play.

Rise in minimum labor wages across countries such as the US and China will result in increased employee expenses for Vehicle Transportation Services suppliers who will be forced to pass on a part of this increase to their buyers.

Businesses are focused on maintaining a lean inventory of raw materials, parts, components and finished goods. While it is a novel concept to keep the inventory costs in check, it also highly challenging to implement in a global sourcing context and requires a clock work like optimization of logistics and warehousing processes. Companies are moving to a completely digital supply chain footprint to reduce errors and risks associated with such strategies.

Trends like these and many others discussed in this report are necessitating a relook at the way Vehicle Transportation Services is procured and the procurement cost saving opportunities that exist.

Vehicle Transportation Services procurement best practices are moving towards a level of sophistication which is typically seen in traditional procurement categories. Category managers now have an attractive opportunity to adapt the best practices seen within this category as well as those being leveraged in other non-related categories. This report summarizes the best practices picked from across multiple categories that could work well for category managers involved with Vehicle Transportation Services procurement strategy.

For example, Buyers need to discuss business goals and strategic imperatives with service providers to understand their mode of operation and establish control over important parameters of the supply chain.

Buyers must track suppliers' quality management systems to ensure that the products are stored in a hygienic environment and have almost zero probability of occurrence of damages. This is particularly critical for buyers in industries such as food and beverages and pharmaceutical.

Buyers should assess service providers' capability of predicting the weather, traffic, and other real-time information, which might affect shipments that are in transit or in its delivery times.

Vehicle Transportation Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Vehicle Transportation Services procurement. Some examples include: