Best Negotiation Deals în Automotive Freight Transportation

DESCRIPTION OF THE INDUSTRY

The automotive industry is made up by large companies and organizations which are involved in designing, manufacturing, transporting and selling of all kind of motor vehicles. It represents one of the most important economic sector in the U.S. that contributes to the American revenue.

For many decades, The U.S. was the leader in the automobile production. Nowadays, even though the United States produced 8.7 million units in 2011, was completely overtaken by China who produced 18.4 million units, followed by Japan with 8.4 million units.

Along the history, the automotive industry evolved to be dominated by three firms, General Motors, Ford and Chrysler. They were all based in Detroit, Michigan which for many years was the strategic point of the industry.

In the whole process of designing and manufacturing the vehicles, parties are involved such as plants, companies, organizations, transportation companies that are being part of a complex supply chain management very tightly linked one another.

The assembly plants are always in need of financing good and reliable trucking companies to help them with delivering the main parts from different manufacturing companies to their assembly factory in order to fulfill the last stage of the manufacturing process.

Like in many industries, automotive manufacturers and their suppliers usually are looking to find the best transportation deal for it to cover even tight deadlines.

THE PARTNERS INVOLVED IN THE NEGOTIATION

In order to find the best transportation option, the shippers such as Ford or General Motors usually are being helped by freight brokers or logistic brokers.

Freight brokers are federally regulated and bonded companies. They are involved in the supply chain and distribution process by providing the shipper with the most serious and reliable transportation companies, selected using specific criteria from a vast network.

Basically, the freight brokers do not “touch” the freight. They are being engaged in helping the big manufacturers, find the best price with the best carrier for any load necessary to be transported. But not anybody can become a freight broker. To obtain a brokerage license, a company must purchase a surety bond in amount of $75,000 or a trust agreement with federal motor carrier safety administration. The main purpose of the bond is to protect shippers and carriers from fraud.

One of the well-known freight brokers is Schneider, a logistic company which is involved in supply chain management of General Motors. Schneider Logistics has a brokerage experience of 10 years, being involved in partnership with over 6,000 carriers.

Schneider’s Selection process of trucking companies is based on specific criteria directly connected with the federal motor carrier regulations. In order to qualify with Schneider and to be able to sign a contract, a transportation company must prove that it has a good credit history in the field, in terms of the size of the fleet, the safety policies adopted, the drivers’ qualification, the professionalism of the people from logistic department and last but not least the good references from other three brokers.