10TIPS ‹ CONTINUED FROM PAGE 14
7 Anticipate carrier positions and develop a sound negotiation plan. Using the intelligence gathered, for- mulate a picture of your business for the carriers. Have a plan to account for all possible objections, and response. Yes, you are developing a strategy for engagement, but you don’t need to be contentious because that will not work to your advantage. Determine what you want to achieve from the negotiations. Be specific. Be realistic. Be organized. Be concise. Above all, be prepared. 8 Prepare a written bid package to present to the rail carriers. Make sure to present your written bid package in a clear format that does not overwhelm carriers with more informa- tion than necessary. Make it simple and easy for carriers to work with, so they can respond in a timely manner.
9 Utilize expert legal counsel for the final transportation contract review. Several highly reputa- ble firms specialize in transportation law. They can work independently or alongside your in-house legal counsel to identify potential pitfalls or sug- gest additional language in the final document that will help protect your company. 10 Establish a long-term rail t ra n s p o r ta t i o n st ra te g y. Strategically located origin or destination points enable the best transportation rates and terms. Avoid siting new plants that depend heavily on rail at locations that don’t provide competitive access to at least two Class I railroads. Also, consider build-out/ build-in, short-line, and transloading strategies wherever possible. ■
available? Meanwhile, understand how railroad network design, local opera- tions, and capital improvements affect your traffic. Operational factors can be either distractions or opportuni- ties for leverage in the negotiations; account for them in your strategy and approach. 6 Develop relationships. You should not meet your railroad counter- parts for the first time at a contract negotiation. Although rail carrier behavior and performance frustrates shippers at times, getting involved in transportation industry trade groups and cooperative joint initiatives will ultimately prove more useful than tak- ing a hostile or combative approach. In addition, networking can help you better understand the personalities of the people you negotiate with.
16 Inbound Logistics • July 2007
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