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Comparing cost proposals from Fedex and UPS

Brian Birkan's Profile

I have received proposals from both of the above, but requires an expert to decipher the 2 proposed agreements to do a side-by-side comparison.

Can anyone suggest a firm I can use who has the expertise to allow me to make an intelligent decision re who to choose.

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Proposals from suppliers are more becoming like train schedules. Often very confusing. An apples to apples comparison would be almost impossible. Especially with overnight delivery, just write down the services you use. Step away from their menu and just focus on the services you need.

Put together a simple matrix. Down the side, list services and across the top, list providers. Then just fill in the blanks. By the end of the exercise, it will be clear. Depending on your business you do not care that one provider can take hazardous materials across the country for a better price than the other.

Or you can hire a service that will do the exact analysis I just described.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Another choice, assuming you are talking about being a nice sized client, is designing the proposal lay out and having them fill it in for you.

If they can't or are unwilling, well that tells you a lot about many areas of the business that will be problematic, from Customer Service to Billing.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

Besides the suggestions above, one other thing you could do is give them a detail of your shipments and each firm tell you what your cost would be. I would not be in favor of spending money just to evaluate proposals.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I agree with your last statements. If a vendor can't make a proposal intelligible; what else will be unintelligible... It's a slippery sliding slope in to a nightmare.. (and if I really really tried I could have made that a complete alliteration :) )

Mark Woollgar
Title: Partner
Company: Adams Woollgar Financial Services LLC
(Partner, Adams Woollgar Financial Services LLC) |

I did this analysis as CFO of a 3PL (Third Party Logistics Provider). This is a remarkably complex calculation and there are huge differences. Pretty much each carrier works to their strengths so they are biased towards slanting the table towards them. You need to see whether your needs match where a carrier is competitive.

Essentially you need to take a few years of history of your shipments with identifying characteristics. These characteristics include international/domestic, for international what country, for domestic what zip code grouping, air/ground, residential/business, express (over night)/non express, weight, letter/parcel etc. You should be able to get this from your current carrier in a CSV file.

Once you have this pretty much you are running pivot tables to see the counts in the major groups times the specific rates now being quoted to see where you end up. Then also try see what changes are happening in the future in case there is a major shift. Of course the different carriers do not quite use the exact same buckets so you will have a fudge factor between buckets.

If your business is significant you can go back to the "better quality" provider and push them for a reduction in rates. Have fun with this.

Mark Woollgar
Adams Woollgar Financial Services
Providers of part-time CFO, Controller and Accounting Services

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