Air and Sea Freight client saves more than $1 million (22.54%) with four list e-auctions.

Challenge

A Scanmarket client wanted to conduct their negotiations on Air and Sea Freight in an e-auction, but it was not possible to integrate all 1,000+ lanes into one e-auction. With an annual spend of almost €4 million, 8 suppliers were qualified to bid. 

Solution

To increase visibility for suppliers, Scanmarket arranged 1,000+ lanes into four lots based on destinations. Within each lot, the suppliers could bid on 3 lines, full container loads (FCL), less container loads (LCL), and air. The client wanted the suppliers' focus to be on each lot, so we conducted 4 list e-auctions, 1 for each lot. Suppliers were able to see if they were leading in the bidding, both on the total lot and per sub-total as supplier positions on sub-totals could influence the final order allocation. The results gave our client full visibility of all individual lane prices and allowed the suppliers to compete on a few sub-totals.

Result

4 list e-auctions drove total savings of €889,429 (22.54%) with 321 bids in less than 3 hours.