Logistics Survival Guide June 2009

Confidential © 2009 WNS Global Services | wns.com

A survival tool for logistics companies in uncertain times

Business Process Outsourcing:

2Confidential © 2009 WNS Global Services | wns.com

The Bleak State Of Logistics Industry

According to Association of American Railroads (April 2009)– Carload traffic on U.S. railroads fell by 23

percent

– Intermodal car traffic fell by 17.9 percent, as compared to April 2008

– Combined cumulative volume for the first 17 weeks of 2009 on 12 reporting U.S. and Canadian railroads was 5,573,088 carloads, down to 19.0 percent(1,308,562 carloads) from last year

According to FTR Associates– Year-over-year tonnage freight is expected to

bottom at -10.3 percent in 2Q09 before beginning a slow rise to a still stressful of 6.6 percent in 4Q09


Why Business Process Outsourcing (BPO) For Logistics Companies?

Rapid Cost reduction

– Outsourcing these processes to a logistics industry-savvy service provider can deliver cost saving of 40-50 percent.

Source: WNS

Process In-house, onshore cost range

Offshore BPO cost range

Bill of lading processing $5.00 - $8.00 per each $2.00 - $4.00 per each

Airway bill manifesting $0.30 - $0.40 per each $0.10 - $0.20 per each

Account payable $0.90 - $1.33 per each $0.52 - $0.83 per each

BPO delivers benefits which extend far beyond cost savings– Moving costs from fixed to variable

– Maintaining focus on the customer and retaining them in the face of operating cost reductions

– Placing focus on knowledge rather than intuition to increase revenue

– Consolidating delivery operations to standardize business processes

– Getting even more out of shared services costs and delivering continuous improvement


Clearing The Decks For Success

Seven Simple Rules For Logistics Companies To leverage BPO

1. Ensure BPO is a CEO priority

2. Approach outsourcing with an open mind

3. Keep it simple

4. Move fast

5. Develop a realistic deployment plan

6. Insight on alignment

7. Debit budgets in advance


Advantage Logistic Companies Gain By Moving To A BPO Model

Commercialize the approach to operations

Rapidly reduce cost by Sourcing processes with scale Standardize business process

Rationalize the delivery model

1 2

4 3


Which Logistics Processes Are Ripe For Business Process Outsourcing?

Outsourcing processes to a logistics industry-savvy service provider can deliver cost saving of 40-50 percent.

Sales/marketing Operations Finance

Tariff updatesMarketing collateralCampaign ManagementRate quoteSales reports

Import/export manifest

PO entry

Drivers logs

Fuel tickets

EDI gateway exception management

Tracking status updates

Vendor performance reports

Operations planning

Cargo de-stuffing

Customers clearance

Vessel performance

Vendor contracts

Account PayableAR/credit and collectionsDisbursement accountingAgent reconciliationsGeneral ledgerBank reconciliationsManagement reporting

Customer services Origin/destination agent

Service/rate inquiresCustomer advisoryPre-advice/arrival notificationCargo trackingWeb helpCargo claimsComplaintsBookings

Export manifest

Collect charges

Invoicing

Import manifest

Import charges

Documentation

BL/AWB/FCR processingBilling and invoicingFreight auditTraffic/contract filingData transmissionCompliance checksLanded cost


Case study

Rapidly Reducing The Cost Structure For A European NVOCC

A leading European Non-Vessel Operating Common Carrier (NVOCC) looked to reduce its mounting staff costs in Europe, Latin America and Asia.

WNS' deep logistics industry knowledge contributed to a solution which standardized and migrated the NVOCC's entire import bill of lading and import manifest preparation processes among all its locations to one of WNS‘ offshore delivery centers, resulting in a 50 percent cost reduction.

Further, the standardized processing environment created for them has dramatically improved information dissemination among its network of offices.

The NVOCC is now experiencing minimal rework when moving shipments around the globe, and negligible to no customs delays or fines.


Case study

Moving From Fixed To Variable Costs For A Global Express And Logistics Company

A global Top 3 express and logistics company had to decrease the expenses associated with its mission-critical airway bill manifesting process.

With specialist operations centers serving the logistics industry, WNS was able to establish a 350-person operation for the company in less than 90 days, and is handling an annual volume of over 9 million airway bills.

WNS not only reduced airway bill manifesting expenses by 60 percent, but significantly increased the accuracy of data input to 99+ percent.

As the delivery is priced on a unit transaction basis, the client gained the benefit of variable cost pricing, with WNS assuming the volume risk.


After reaching steady state, the U.S.-based shared services operations of a Fortune 500 logistics company hit a plateau in its ability to optimize its cost structure.

By engineering a rapid transition to offshore delivery, and seeding the offshore operations team with industry and functional experts, WNS was able to attain an additional 40 percent cost savings for the company. And by applying Six Sigma and Lean principles to the client's processes, productivity gains of 10 percent were achieved within the first three years of the engagement.

Pleased with the results of this partnership, the client is now tracking business outcomes, as opposed to transactional metrics, delivered by WNS, and is poised to weather this economic storm in relation to its competitors.

Case study

Delivering Continuous Improvement For AFortune 500 Logistics Company


To learn more -

Listen to podcast:

http://www.wns.com/Insights/Podcasts/BPOistheliferaftforshippingandlogistics/tabid/44175/Default.aspx

Download Survival Guide: http://www.wns.com/Insights/Articles/tabid/81/Default.aspx

Read the Blog: http://www.wns.com/Insights/Blogs/tabid/44163/entryid/48/default.aspx

Visit website: www.wns.com

Logistics Survival Guide June 2009

Economy & Finance

Transcript of Logistics Survival Guide June 2009