Preparation for transportation negotiation

Abstract: Due to the fact that it is once again a shift within the world trade market, companies tend to have production closer to their end market. For a Swedish company this means to have less production in Asia to the favour for Europe. The forwarders transporting goods from Europe to Sweden will have a higher impact on companies turn over than before and the importance of a good partner in the forwarder is of vital interest. The company SportAlot faces many problems with their present forwarder performing the transports from Europe to Sweden. This thesis is research in a deeper understanding of how SportAlots background problems, bad communication, price reduction possibilities, lack of quality, lack of trust and bad data, will affect a coming negotiation. The research question is: How can a retail company prepare for transport negotiation? The sub-question, Which are the drivers for change in transportation at a retail company?, will partly help to answer the main question. The writer of this thesis uses the hermeneutic view when performing the empirical oriented research with an inductive approach. The research is descriptive in the presentation of the literature review and empirical part, as well as partly explanative in the analysis part where the literature and empirical findings are put together. The research is performed by gathering qualitative data through semi-structured in-depths interviews, observations and a case study at the company SportAlot. The writer of the thesis works for SportAlot and there is therefore a risk that the objectivity is biased, even if that is tried to eliminate. The research measures what it is intended to do, and if it is done once again it will most likely give the same result again. Within another context the result will not be exactly the same, but the method will provide the practitioner with the same validity and reliability in his or her result. The research is possible to generalize for companies within the retail business having the same type of cargo as well as the same transportation costs/volume from Europe to Sweden. It is hard to find literature showing how to prepare for transportation negotiation. Instead there are much more about organizational change, change management and the negotiation itself. Literature within these fields will support the thesis and set the theoretical framework within which the empirical data is gathered. The present problems found at the case company, SportAlot, is bad delivery precision, inadequate information, a lot of non-value-adding-time is spend on unnecessary things, the employees lacks trust in the forwarder, the informational lead times are long and the transports can be too expensive compared to other forwarders. The needs SportAlot has is better delivery precision, they require information, regular statistics, possibilities to track their goods and possibility to give the forwarder penalties when it does not act as agreed. The empirical part also presents statistical data from 2010 which is a base for the request for quotation sent to the forwarders. The thesis resulted in the importance of good management that supports changes and employees that are willing to improve their work. It is important for the negotiators to have knowledge about the negotiation itself so they are prepared when they come to the negotiation and can give a well informed impression to the other party. It is also important for negotiators to be well informed about other criteria which are up for discussion within transportation at the present time. Examples of that are ISO certificates, routing order and customs clearance simplifications. By using the weighted linear model the result from the literature and the answers on the request for quotation was that forwarders DSV and NH Logistics did perform well in the analysis and are recommended for SportAlot to meet for further negotiations based on the drivers for change. The drivers for change are: decrease price, improve lead times, improve delivery precision, improve communication, improve trust and set a good base for the relationship. Choose a forwarder that gives you the right quality for your demand.