Food and Drinks Supply Chain Logistics Report

BORD BIA FOOD & DRINKS SUPPLY CHAIN LOGISTICS STRATEGIES FOR SUCCESS
FOOD &
DRINKS
SUPPLY
CHAIN
LOGISTICS
STRATEGIES FOR SUCCESS
Growing the success of Irish food & horticulture

B
CONTENTS
1. INTRODUCTION 2
2. ELEMENTS OF BUSINESS AS USUAL STRATEGIES 5
3. OPTIONS FOR SUPPLY CHAIN RE-DESIGN 13
4. COST REDUCTION INITIATIVES 17
5. POSSIBLE BREXIT SCENARIOS 20
6. GUIDE TO LOGISTICS SERVICE PROVIDER SELECTION 24
7. CONCLUSIONS AND RECOMMENDATIONS FOR EXPORTERS 33
APPENDICES
1. CURRENT FREIGHT FERRY SCHEDULES 36
2. LOGISTICS SERVICE PROVIDER SELECTION CRITERIA 37
3. D
ATA COLLECTION TEMPLATE FOR LOGISTICS
SERVICE CONTRACTS 38
4. REQUEST FOR INFORMATION (RFI) EXAMPLE 40
5. REQUEST FOR PRICING (RFP) EXAMPLE 41
6. KPIS AND MANAGEMENT REPORTING 47
7. GLOSSARY OF TERMS 48
MODEL LOGIC LIMITED

Model Logic is a supply chain and
logistics consultancy. Services
cover all aspects of the logistics
of exporting for food and drink
companies, from the strategic design
of the supply chain network to
seeking improvements in operational
processes and systems. Model Logic
also provides support, training and
mentoring services for SMEs.
www.modellogic.co.uk
1
1.
INTRODUCTION
2
Brexit is the single LEAD TIMES CHALLENGES AHEAD

According to the Brexit Barometer These findings tell us that, in the short
biggest challenge risk analysis, 64% of the clients that and medium term, Irish food and drink
facing the Irish food engaged in the process stated that their companies are likely to face increased
commercial models are sensitive to costs in their supply chains.
and drinks industry. increases in lead times. 88% stated that
• Companies will need to assess or
According to Bord Bia’s their commercial model is moderately
or highly dependent on low supply chain audit the preparations of their supply
Brexit Barometer, the costs. In some sectors such as beef, chain partners, market access routes
and their raw material sourcing
lamb and mushrooms, 100% stated this.
supply chain is one In addition to the financial implications channels.
of the highest risks of increased lead times, customer • In the event of reduced volumes to
relationships could be damaged as the UK market, supply chain footprints
emerging from the product availability is a key performance will need to be assessed. Companies
uncertainty around the metric for buyers. will need to look at how to get their
products to the UK and exporters
UK’s future status as a SUPPLY CHAIN PARTNERS using the UK as a land bridge will have
trading partner with Interdependencies in the supply chains to look at direct routes to Europe, if
this emerges as more cost effective.
for Irish food and drinks companies are
the EU. Increased lead significant and it is vital that each partner The option of holding more stock
closer to the European markets
times, especially when along the chain and within the logistics
should also be a consideration.
network is prepared for market and trade
related to short shelf life challenges. 76% of respondents to Bord • Exporters need to engage with their
Bia’s risk analysis state that some supply
products, in conjunction chain relationships are strategic to their
supply chain partners to not only
understand their Brexit readiness but
with a complex and business. Meanwhile, 68% of respondents also that of their third party agents.
are unsure whether their supply chain
intense supply chain, is partners are Brexit ready.
Exporters’ expectations of these
providers need to change, as their
a key issue facing the Each individual food and drink dependency on them is greater and
there is a requirement for a wider
industry. manufacturer has established its own
range of services.
distribution and logistics practices but
trends do emerge by sector. In the dairy
sector, for example, 95% of respondents
outsource aspects of their supply chain, STRATEGY GUIDE
86% state that at least some of their
supply chain partners are strategic and This Strategy Guide, alongside Bord Bia’s
81% are unsure whether their partners are new Logistics Service Provider Directory,
prepared for Brexit. aims to assist Irish food and drink manu-
facturers to identify operations partners,
establish more efficient distribution chan-
UK LAND BRIDGE
nels or routes and identify possible strate-
A significant risk which has been gies for reducing supply chain costs.
identified is the potential disruption to the
frictionless movement of exports through The Guide is aimed at current and
the UK to other export markets. These potential exporters who wish to review
product flows could be subject to future their logistical operations for servicing
tariffs or delays, and new supply chains both existing and new markets in
to service existing markets need to be Europe. Brexit will have an impact on
explored by companies. all exporting companies whether it is
caused by variations in the exchange
NEW BUSINESS OPPORTUNITIES IN rate or by structural changes in the rules
EUROPE and regulations for selling into the UK or
more onerous controls at the borders
The Brexit Barometer also demonstrated with the EU. It is therefore imperative
that over 32% of respondent companies that all companies have a strategy for
believe there are viable alternative reducing their cost base, reviewing
markets to the UK in other European product and market profitability, and
countries. These potential new markets also have contingency plans in place for
are further away from Ireland and different Brexit scenarios. Diversifying into
volumes, in the short term, may be new markets will challenge companies
significantly smaller than to the UK. to review their product offering and their
These parameters mean that exporting sales channels.
to other parts of Europe will be more
complex, with higher risks than trading The supply chains of Irish food and
into the UK. drink companies are diverse. Exporting
3
companies vary in many dimensions,

such as:
• Scale of sales volume and product
range
• Product temperature requirements
and shelf life
• Sales channels
• Use of agents, distributors and
wholesalers
• Country markets serviced and their
distance from Ireland
Attempting to provide a concise
Guidebook on logistical operations for all
companies is a challenge. This document
provides a framework for reviewing
current strategies and considering new
ones.
SERVICE PROVIDER
SELECTION
The logistics service provider (LSP)
marketplace is continuously evolving
as it responds to additional systems
requirements and routes to new markets.
Consolidation is taking place through
mergers and strategic alliances are being
formed. In the future, exporters will need
to look beyond their incumbent provider
and become more educated in the
options available.
The final section of the document is
a guide to selecting logistics service
providers for transport and warehousing
operations within Europe. The process
followed is similar, regardless of the
company size or maturity, although it
may take longer in more complex supply
chains or when the services required are
specialised.
4
2.
ELEMENTS
OF BUSINESS
AS USUAL
STRATEGIES
5
COMPONENTS OF In general terms, suppliers can sell The level of stockholding held at the
EUROPEAN SUPPLY their products through three possible RDCs depends upon the product
marketing channels: category and the retailer’s own
CHAINS AND ROUTES policies. Within the UK, many retailers
TO MARKET • Retail (including online and private
also encourage their smaller and
label)
overseas suppliers to make use of
• Foodservice Primary Consolidation Centres (PCCs).
The components of the • Manufacturing The PCCs tend to be operated by
third party logistics service companies,
European supply chain The supply chain for each channel
who charge a fee to hold stock and
differs in the facility infrastructure, the
will vary dependent lead times, expected service levels and
undertake picking activity on behalf of
the suppliers. Products are transported
upon the sales and the cost to serve. The final customer
from the PCC to the retailer’s RDCs,
can either be serviced directly or via
marketing channel, the a third party such as a distributor or
thus allowing the RDCs to run more
efficiently with a smaller number of
size of the suppliers wholesaler.
deliveries and minimal or zero stock.
business, the product The use of PCCs is not as widely used
SUPPLIER FACTORY / WAREHOUSE
characteristics and the Dependent upon the product category
in other European countries.
countries being serviced. and its shelf life, Irish food and drink Small or independent retailers usually
source their products through
This section of the Guide companies either supply products
national or regional wholesalers. The
directly from the production line or
gives an overview of the from stock in a factory warehouse or wholesalers offer either delivered
services or collection from cash and
different components an off-site facility.
carry depots.
of the supply chain and RETAIL SUPPLY CHAIN
ONLINE RETAILER’S SUPPLY CHAIN
the alternative routes to Figure 1
Figure 2
market. Grocery retailers tend to supply their
Online Retailers who offer a home
stores from Regional Distribution
Centres (RDCs). For some retailers a delivery service operate from a number
few product categories (e.g. bread, of Regional Distribution Centres (RDCs)
milk, and local produce) can be or a National Distribution Centre
Figure 1 supplied direct to store. (NDC). Transport to the consumer can
either be by local delivery vans or using
a parcel network, dependent upon
the product categories and services
DIRECT TO CUSTOMER offered.
CHANNEL: RETAIL/PRIVATE LABEL Online retail falls into two main
categories:
• O
nline Grocery Retail – grocery
retailers operate their home
shopping websites for consumers
to place their orders and the retailer
RETAILER
STORES
delivers to home in their own
vans (or home delivery specialists).
Orders are either fulfilled from an
RDC or direct from a store. Most
large grocery retailers have their
own home delivery operation.
•
Online Shops – some specialist
SUPPLIER
FACTORY/ RETAILER retailers have one or more
REGIONAL
WAREHOUSE
DISTRIBUTION distribution centres holding stock
CENTRES to fulfil orders captured on their
website. These retailers tend to
use parcel carriers to make the
final delivery to the consumer’s
home. Examples of online shops
RETAILER might include: wines and spirits,
PRIMARY
CONSOLIDATION confectionery, Irish products and
CENTRE
hampers.
6
Figure 2
DIRECT TO CUSTOMER
CHANNEL: ONLINE
SUPPLIER LOCAL
FACTORY/ ONLINE
WAREHOUSE RETAILER
Figure 3
FOODSERVICE SUPPLY CHAIN
Figure 3
The supply routes for suppliers into DIRECT TO CUSTOMER
the foodservice sector tend to be of
CHANNEL: FOODSERVICE
three broad types:
Direct to Outlet: Some product
ranges (e.g. bread, milk, local
produce, etc.) can be delivered by
suppliers direct to the food outlet.
Foodservice Company’s Own
Network: Various food service FOODSERVICE
chains (e.g. Carluccio’s, McDonalds, OUTLETS
and Starbucks) employ logistics
service providers to operate regional
distribution centres on their behalf.
Suppliers deliver into the centres
which may hold stock of some items
or act as cross dock facilities. SUPPLIER
FACTORY/ FOODSERVICE
Foodservice Wholesalers: Some WAREHOUSE COMPANY
NETWORK
food service chains (e.g. Mitchell &
Butler in UK) employ foodservice
logistics or wholesale companies
(e.g. Brake Logistics, ChefCulina,
Pallas Foods) to manage the supply
of product from the suppliers to FOODSERVICE
the foodservice outlets. Smaller, WHOLESALERS
independent food outlets can
also make use of the foodservice
wholesalers’ delivery network or their
cash and carry depots for their supply
Figure 4
of ingredients.
FOOD MANUFACTURER’S
SUPPLY CHAIN
DIRECT TO CUSTOMER
Figure 4
CHANNEL: MANUFACTURING
Food manufacturers tend to hold
stock of the raw materials of their
suppliers either at the factory or
within close proximity. The level of
stock holding will depend upon the
nature of the production process,
the shelf life of the raw materials, the LOCAL
MANUFACTURER’S
frequency of supply and the risk of FACTORY
delivery delay or failure.
SUPPLIER LOCAL
FACTORY/ MANUFACTURER’S
WAREHOUSE WAREHOUSE
7
STAKEHOLDERS ALONG WHOLESALERS INTERMEDIATE WAREHOUSES

Figure 5
THE SUPPLY CHAIN Wholesalers can fulfil varying roles in
different countries. The differences For most SMEs servicing the retail
SALES AND MARKETING AGENTS AND between wholesalers and distributors can channel, particularly in more distant
DISTRIBUTORS also be blurred. Generally, wholesalers markets, there is a requirement to hold
service the independent trade and offer stock either within the market or en-
Sales and Marketing Agents and a large catalogue or website of items route. The stockholding can either be
Distributors (SMDs) can provide a range for their customers to order or collect. at one or more agents or distributors or
of services to help suppliers to win new Wholesalers provide an effective route could be at a local LSP’s warehouse.
business and then provide ongoing to a large number of independent
support in marketing, sales and logistics. businesses, but will not provide the same If the supplier is servicing more than
For logistical support, some SMDs level of detailed attention as a distributor one market then a single, strategically
will provide their own warehouse and or large retailer. located, intermediate warehouse could
transport services, some will partner with be considered to supply more than one
LSPs, whilst others will leave the supplier country.
to find their own LSP solution. Generally,
the SMDs will leave the supplier to
organise their own transport from Ireland
to the SMD’s facilities, although some
may be able to provide suggestions on
suitable partners.
Figure 5
USING INTERMEDIATE WAREHOUSE

CHANNEL: RETAIL/PRIVATE LABEL
RETAILER
STORES
SUPPLIER INTERMEDIATE RETAILER

FACTORY/ WAREHOUSE REGIONAL
WAREHOUSE DISTRIBUTION
CENTRES
RETAILER
PRIMARY
CONSOLIDATION
CENTRE
8
TRANSPORT OPTIONS customers in the destination country.

This occurs when a supplier has a
companies who are part of European
pallet networks, with defined rates for
The options for procuring transport load, typically in the range 4-16 pallets different load sizes and destinations.
for exporting from Ireland to another that needs to be delivered. Transport The transport companies set their prices
European country fall into a number of companies will offer rates for the load taking into account their expectations
categories, dependent upon the size which will vary dependent upon what on total vehicle fill and the utilisation
of the load and the required speed of other loads they may be able to combine across the network. Here the individual
delivery. Below is a description of each together, either on outbound or return. transport companies team together to
of the categories in their purest forms. Example service providers are Caffreys create a network of hubs across Europe.
There are many hybrid versions in the International and Hannon Transport. The company that makes the collection
market. from the supplier will transfer the load
Less Than Truckload (LTL) – Single into a distribution hub in Ireland. The
Full Truckload (FTL) (Figure 6) is where Operator Groupage (Figure 8) is a load is then consolidated at the Irish
a supplier procures a vehicle trip from a regular, usually scheduled, service hub with other loads collected by a
single source (e.g. the factory) to a single offered by transport companies, with number of Irish transport companies
destination (e.g. customer warehouse) defined rates for different load sizes and who are part of the pallet network. The
and is charged an agreed fee. The destinations. The company sets its prices journey from Ireland to the destination
supplier can load a number of pallets up taking into account its expectations on country is made by one of the pallet
to the maximum load for the vehicle. total vehicle fill and runs the risk that its network members and is delivered into
The larger the payload, the lower the rate target cannot be met. A single operator one or more European hubs. From
per pallet. The supplier can either agree with multiple hubs across Europe, makes the destination hub, a number of the
a rate with a regular transport provider collections in Ireland and also completes national pallet network members will
or can review the market on a spot hire deliveries in the destination country. The make the final deliveries. The pallet
basis. Including additional drops en-route operator will try to establish flows in the network members will also try to
can be negotiated for an extra charge. opposite direction and make collections establish flows in the opposite direction
Example service providers are Nolan on the same routes as undertaking and make collections on the same routes
Transport and Dixon International. deliveries. Example service providers are as undertaking deliveries. An example
Ace Express and Transmec. organisation is The Pallet Network.
Less Than Truckload (LTL) – Single
Vehicle Direct (Figure 7) With this type Less Than Truckload (LTL) – Pallet As well as pallet networks, the same
of contract, a single LSP would collect Network Groupage (Figure 9) is a principles apply to alliances between
from a number of Irish suppliers and regular, usually scheduled, service companies in different countries.
then transports their loads directly to the offered by a group of transport
Figure 6
FULL TRUCKLOAD (FTL)
Figure 7
LESS THAN TRUCKLOAD (FTL)

SINGLE VEHICLE DIRECT
9
Figure 8

SINGLE OPERATOR GROUPAGE
IRELAND GERMANY
HUB HUB
IRELAND GERMANY
HUB HUB
Figure 9

PALLET NETWORK GROUPAGE
IRELAND GERMANY
HUB HUB
IRELAND GERMANY
HUB HUB
Example organisations are Seafoodways Germany and Poland) then shipping (lift-on/lift-off) vessels use a crane to
and System Alliance Europe. products by ISO container can be a cost load and unload cargo, usually as ISO
effective alternative. Shipping by ISO containers. A ConRo vessel is a hybrid of
Parcel / Carrier Services (Figure 10) container will usually take longer than a RoRo and a container ship. This type
can be used to send small packages or by road, but if lead times and shelf life of vessel has a below-deck area used for
samples. The carrier provides a range of permit it is worth consideration. Shipping vehicle storage while ISO containers are
tariffs dependent upon the parcel’s size, by ISO container is usually best organised stacked on the top decks.
the source and destination locations through a freight forwarder or shipping
and the required speed of delivery. The company as there are a different set
carrier operates a number of collection UNACCOMPANIED VEHICLES
of options for outbound and inbound
and delivery depots which feed into a Once a vehicle has been loaded onto
ports than with roll on roll off ferries.
small number of hubs in each country. a vessel, usually the driver also makes
ISO containers are usually 20ft or 40ft
Example service providers are DHL, DPD the crossing in what is known as an
in length. Example service providers are
and UPS. accompanied trip. During the time at
DSV, DFDS, ECS and P&O Ferrymasters.
sea the driver is deemed to be working
ISO (INTERNATIONAL STANDARDS and will be paid a fee. For longer sea
RORO, LOLO AND CONRO FERRY crossings, it may be economical for the
ORGANISATION) CONTAINER OPERATIONS
TRANSPORT driver not to travel with the vehicle and
RoRo (roll-on/roll-off) ships are vessels it is arranged for a second driver to meet
For some European markets that are designed to carry vehicles and trailers the vehicle at the destination port and
a longer distance from Ireland (e.g. that are driven on and off the ship. LoLo then continue the onward journey. This is
10
Figure 10
PARCEL NETWORK
IRELAND GERMANY
HUB HUB
referred to as an unaccompanied trip. also includes the right of free transit required to accompany a shipment of
throughout its territory. Once a product goods. There are three main types of
CUSTOMER COLLECTIONS has been produced in Ireland, it can be invoices in international trade:
transported freely throughout the whole
Some large retailer or food service • Shipping invoice – a document
of the EU.
wholesalers are large enough to organise prepared for the movement of
either collections from their suppliers’ Article 36 of the Treaty on the goods. Often used when the goods
factories or warehouses, or to organise Functioning of the European Union are free of charge but can be used
a consolidation operation within Ireland (TFEU) allows EU countries to impose when the commercial invoice is
or the UK. This approach can make restrictions on products if they are not available or will be raised at a
life simpler for the supplier, however it deemed to interfere with public later date.
is important that savings and costs be interest. This may be on grounds
evaluated carefully. The supplier also of the protection of “health and • Commercial invoice – the invoice
needs to take into account the impact on life of humans, animals or plants,
IRELAND GERMANY
on which the customer is expected
its other export business logistics. HUB HUB
environmental protection, public security to pay. Some customs authorities
or public morality”. Governments must insist that the commercial invoice is
available at the time of import.
CURRENT FERRY CROSSINGS demonstrate that such restrictions
There are only a limited number of ports on free movement are justified and • Proforma invoice – not to be used
on the Island of Ireland that operate proportionate, such as advance for shipping goods. This is an
freight services to the UK and mainland authorisation procedures for certain invoice raised in advance generally
Europe. These are Dublin, Rosslare, products that present a genuine risk to to enable payment in advance,
Cork, Belfast and Warrenpoint. A full list public health. the release of foreign currency,
of current freight schedules from each The requirements for documentation to the setting up of a letter of credit
port is shown in Appendix 1. Some of accompany shipments within the EU are or obtaining an import licence.
the ferries operate freight only whilst the minimal and may include a commercial Proforma indicates it is “before
more regular ones combine freight and invoice and a packing list, if appropriate. the actual” invoice so therefore
passenger traffic. Most LSPs who use the Goods moving around the EU should be precedes a commercial invoice.
ferries, require the drivers to accompany in free circulation, which means that they 2. Certificate of Origin (CofO) -
their vehicles during the sea crossing. are either wholly produced within the EU document required by some
For longer sea crossings the alternative is or, if imported, all EU customs duties have countries to establish the place of
for the vehicle to be unaccompanied. been paid. Free circulation goods do not manufacture or production of the
require customs paperwork when moving goods. It is generally issued by the
around the member states of the EU. Chamber of Commerce and confirms
CURRENT PROCESSES, the nationality (country of origin)
REGULATIONS of the goods. If a country does
AND SYSTEMS FOR CURRENT PROCESSES, not require a Certificate of Origin a
statement of origin must still be made
EXPORTS TO OTHER EU REGULATIONS AND on the commercial invoice.
COUNTRIES SYSTEMS FOR EXPORTS
3. Export Declaration - All goods leaving
Within the European Union (EU), the
TO NON EU COUNTRIES the EU must be declared to customs.
European Economic Area (EEA) and The documentation requirements for This export declaration has a number
Turkey, food and drink products can exporting to non EU countries are of names – C88/SAD/NES/EAD. The
move freely without customs checks. currently more onerous than to the EU consignor is legally responsible for the
Governments may not limit quantities and include: information provided on the export
of imports or exports nor restrict trade declaration even though it may be
in any way. The EU’s right to free trade 1. Invoice and Packing list. An invoice is prepared by the freight forwarder.
11
Exporting companies must receive being carried. The time to process a full, financial solvency and practical
a copy of this export declaration single consignment, load of 33 euro standards of competence or
for their records and as evidence of pallets will be significantly less than, for professional qualifications directly
export. example, a load made up of six different related to the activity carried out
consignments, each of five euro pallets.
4. Commodity Code - A string of • Combined security and safety with
numbers used to identify goods for customs simplification (AEOF) –
customs purposes. The commodity issued to a business that has applied
code systems are harmonised so that AUTHORISED for and fulfilled both AEOS and AEOC
all countries customs authorities can ECONOMIC OPERATOR criteria
cross reference the commodity code. (AEO) A business can apply for both types of
The codes are issued in a country’s
tariff. EU commodity codes can be AEO certification is an international AEO status and no charges are made
found online – initiative to ensure that supply chains are for the processing of applications or the
www.revenue.ie/en/customs-traders- secure and controlled from the point issue of authorisations.
and-agents/importing-and-exporting/ of origin through to the final delivery Holding the AEO status for security and
classification/index.aspx. destination. Registration is open to all safety purposes enables businesses
businesses in the EU that are involved in to benefit from certain facilitations of
5. EORI - Economic Operator Registered trade with non-EU countries, including
Identification number. Any company customs controls at the entry of the
exporters, importers, logistics operators, goods into the customs territory of the
wishing to export must register for carriers, freight forwarders and customs
on EORI number, which can be done EU or when goods leave the customs
agents. territory of the EU. These will include:
online – www.revenue.ie/en/online-
services/services/common/register- Full details of the process and guides for • Recognition worldwide as safe, secure
for-an-eori-number.aspx . AEO certification are given on the Irish and compliant business partners in
revenue and UK revenue websites, AEO international trade
Introduction Ireland, AEO Manual Ireland
and AEO Introduction UK. • Lower risk scores in risk analysis
PROCESSING TIMES systems when profiling
AND DELAYS AT BORDER The benefits of achieving AEO status
• Priority treatment if physical controls
CONTROLS include:
are conducted
The time to process vehicles at border • Greater access to priority clearance
• Reduced administration • Mutual recognition of AEO
controls is dependent upon many
programmes under joint customs
factors, particularly the bi-lateral • Traceability of flow of goods cooperation agreements which could
relationships between the two bordering
• Increased transport security result in faster movement of goods
countries, their culture and also their
• Fewer delays in despatch through third country borders
approach to processes and systems.
The potential for delay is magnified at • Improved security between supply • Reduced data sets for entry and
peak times, if the level of resources chain partners exit summary declarations (this only
at the border control falls short of • Quicker access to certain customs applies to AEO safety and security)
requirements. procedures including safety and • Easier access to simplified procedures
Turkey is a member of the customs security
union and vehicles crossing the border • Reduction or waiver of
The aim of AEO status is to provide comprehensive guarantees
into the EU do not have to pay duties or business with an internationally
tariffs. The Turkish drivers do, however, recognised quality mark which will The timescale for the AEO certification
require a permit to pass through each indicate that their role in the international process will depend upon the complexity
European country. The experiences at supply chain is secure and their customs of the business and its ownership
the border controls at Kapikule, between controls and procedures are efficient structure. Acceptance of the application
Turkey and Bulgaria suggest that average and compliant. An operator with AEO should be advised within 30 days. The
delays are between two and three hours. security and safety status implies that expected timescale for processing and
More extreme delays have been reported apart from being reliable in the traditional review of the applicant’s operation is
by the Financial Times, quoting 30 hour financial and customs terms, they are 120 days. Where the application is more
delays and 17 kilometre queues. also compliant in respect of security and complex and involves activities in other
Norway is outside the EU customs union, safety standards and can therefore be member states then a further 60 days
while Sweden is inside. Norway and considered as a ‘secure’ trader and thus a may be required. Once accepted, the
Sweden have worked closely on bi-lateral reliable trading partner. AEO authorisation takes effect on the
arrangements and joint systems in order fifth day after the date of issue.
There are two types of authorisation:
to streamline the processes for border At present, the take up of AEO
control. By integrating the systems for • Security and safety (AEOS) - issued certification in Ireland and the UK is low
customs control the transport delays are to any business that fulfils the criteria when compared to other EU countries,
minimised. Every driver must stop and of customs compliance, appropriate such as Germany and Netherlands.
provide customs documents and, if there record keeping standards, financial Information on Irish companies that have
are no irregularities, the average delay is solvency, and maintains appropriate achieved AEO certification can be found
approximately 5 minutes. Random spot security and safety standards on the European Commission’s Taxation
checks are undertaken to ensure that and Customs Union website – ec.europa.
• Customs simplifications (AEOC) -
goods are declared correctly. eu/taxation.
issued to any business that fulfils
The time to process a vehicle will also the criteria of customs compliance,
depend upon the nature of the load appropriate record keeping standards,
12
3.
OPTIONS FOR
SUPPLY CHAIN
RE-DESIGN
13
Irish companies have a POSSIBLE In an ideal world, all partners along the
supply chain would be AEO registered.
number of opportunities DEVELOPMENTS OF LSP Introducing new systems, improving
SERVICES interfaces and undertaking training
to review their are significant projects, which could
Generally the LSP community has
operations, products been adopting a “wait and see” strategy typically take 6 months to one year to
implement if starting with no experience.
and markets and re- towards Brexit or have been reluctant
to define what developments they have The project management of the
design their supply been considering. Recent research has implementation would require a full time
highlighted a number of initiatives being person or consultant for the duration of
chains. The options will undertaken by different LSPs: the project.
be influenced by how the • Registering for and achieving
LSP community respond Authorised Economic Operator (AEO) CONSIDER NEW
status
to the challenges and • Shipping lines reviewing extending
ROUTES TO REACHING
introduce new and services from Ireland to mainland EUROPEAN MARKETS
Europe
innovative services. Should the route to Europe using the UK
land bridge become a major source of
• Ongoing developments for
transporting containers and the use of delay and extra expense, then alternative
ConRo vessels routes may need to be considered:
• Expanding the use of unaccompanied • Avoid the UK land bridge if possible
trailers on shipping legs and seek alternative sea routes.
• Introduction of double-deck trailers to Although the journey time by sea
increase capacity per trip is longer than by road, there are
• Extending use of multi-modal services alternatives to using the UK land
bridge. There are scheduled ferry
• Increase in the number of warehouses crossings from Ireland to ports
at ports in Belgium, Denmark, France,
• Formalising strategic alliances across Netherlands, Portugal and Spain. In
Europe addition freight can be shipped to
• Employing more people with customs ports in Germany and Italy. These
experience options would only be appropriate
for longer shelf life products and
• Interfacing systems with those of the
imply holding stock in the local
tax authorities
markets. Also, when transporting by
It has been highlighted that the port of ship consideration should be given to
Dublin does not have sufficient capacity using containers and possible ConRo
to accommodate significant increases ships.
in queued or parked vehicles that may
• As a result of Brexit, NI transport
result if processing times increase.
companies may use Belfast more than
Consideration may be required by the
Dublin, releasing capacity at Dublin
authorities to building additional customs
for ROI transport companies.
checking facilities inland.
• Work with shipping lines to establish
new routes – shipping lines will
IMPROVED PROCESSES only provide services where there is
significant demand. If Irish food and
AND SYSTEMS drink companies are considering new
With increased complexity, either markets, particularly more distant
due to customs or servicing multiple ones, then they should work closely
markets, there will be a greater reliance with the shipping lines to evaluate the
on efficient processes and systems. viability of new routes. Some shipping
Exporters should consider: lines are already, confidentially,
reviewing opportunities.
• Registering for and achieving
Authorised Economic Operator (AEO) • Consider air freight to selected
status markets, where cost effective – for
some high value, short shelf life
• Introducing new or upgrading existing products being appraised for sale to
supply chain management (SCM) more distant European markets, the
systems option of using air freight should be
• Improving interfaces to freight considered. The cost of air freight
forwarders and LSP’s export could be 5-10 times higher than by
management systems road, but in some circumstances it
may be the only option.
• Increase training on export and
customs related processes
14
INCREASE STOCK IN THE CHANGE PACKAGING TO LABELLING AND

LOCAL MARKET EXTEND SHELF LIFE PACKING AT
In order to mitigate any increased Suppliers of shorter shelf life products INTERMEDIATE
uncertainty or variability in the journey could consider changing the packaging WAREHOUSE
time from Ireland to the European format in order to extend the shelf life of
If more than one different language
markets, suppliers could consider their products, for example:
market is being serviced, then
increasing the level of stock within the
• Consider canned or packaged consideration could be given to sending
local market:
products product to the intermediate warehouse
• At the customer’s RDC or NDC in temporary packaging capable of being
• Consider freeze dried products re-packed into individual language packs.
• At the local agent, distributor or The economics and risks of undertaking
wholesaler’s facility Changing the format to a longer life
product may influence the target this strategy need to be worked through
• At an existing LSP warehouse location sales channel (e.g. food service rather carefully.
than retail, discount retail rather than
The increase would be in the order of premium retail). Ingredient suppliers
one or two days of stock cover. The
ability to do this for short shelf life
could consider expanding their range to TEMPERING AT
products would need to be evaluated
include retail products. These product INTERMEDIATE
developments should be evaluated as
using more detailed modelling. part of a full market appraisal.
WAREHOUSE
For some, normally short shelf life chilled
products it may be possible to freeze
EXTEND SHELF LIFE HOLD STOCK AT them during or post production and
THROUGH IMPROVED INTERMEDIATE
then transport frozen to the intermediate
PROCESS AND WAREHOUSE
warehouse, where they would be
stored frozen. At an appropriate time,
TECHNOLOGY the products would be moved into a
Consideration should be given to holding
Extending the shelf life of products has tempering room where the temperature
stock at strategically located warehouses
huge advantages within the supply chain. would be raised to chilled levels. The
on mainland Europe. Each warehouse
Not only can more distant markets be chilled stock would then be available for
could serve a number of country
reached, but also the selling season can transport to the customer or distributor.
markets. Some examples would include:
be extended. Within the meat industry,
for example, work is continuously being
INTERMEDIATE POTENTIAL
completed to improve cleanliness and
WAREHOUSE COUNTRY CO-OPETITION AND
hygienic processing in order to extend
the life of the products. In addition,
LOCATIONS MARKETS COLLABORATION WITH
alternative chilled vacuum packs or CO2 Rotterdam, Netherlands, OTHER SUPPLIERS
gas flushing could be considered as Zeebrugge Germany, Poland, Transport is an operation where
methods for this. Nordic Countries economies of scale exist. There is
Dunkirk, Calais, France, Belgium, generally a fixed cost of getting from A
Boulogne Spain, Portugal to B, therefore the higher the payload
REDUCE TEMPERATURE the lower the cost per pallet. The
TO EXTEND SHELF LIFE costs of sending one or two pallets
This strategy would allow large load fill over long distances using groupage
Suppliers of shorter shelf life products transport are very high. However, if a
on transport legs from Ireland. A single
could consider extending the shelf life by number of suppliers agree to use the
warehouse location could be considered
introducing more frozen products into same transport company for loads to
for servicing all of the mainland
their range, for example: the same destination or region on a
country markets. The ideal choice for
one or more mainland stockholding particular day then a better rate can be
• New product formulations produced,
locations will depend upon the relative negotiated. The concept of collaboration
distributed and sold as frozen
volumes into the markets concerned. could be extended to sharing the same
• New product formulations produced If the strategy is to grow markets in intermediate or market warehouse that
and distributed as frozen and then Eastern Europe then an intermediate would be operated by a third party.
tempered close to market for sale as stockholding location in Germany could
chill or ambient be considered. Exploring the options
These potential product developments for the location of an intermediate USE OF MULTI-MODAL
should be evaluated as part of a full warehouse is best achieved using SERVICES
market appraisal. network modelling tools.
A number of LSP operators offer multi-
modal services, which provide door to
door, containerised, transport solutions
by sea, rail, road and barge. These
services can be ambient or temperature
controlled. Although the journeys
may take longer there are significant
reductions in CO2 emissions, which build
on the supplier’s green credentials.
15
RESOURCING AND MANAGING SUPPLY CHAIN

NETWORK DESIGN
For Irish SMEs exporting to Europe, the recommended logistics solution is likely to use a
combination of LSP services, rather than investing in property and transport assets. Any
analysis of options will be undertaken based upon estimates of transport and warehouse
cost rates supplied by LSPs or estimated by consultants.
To evaluate the options for supply chain network design and the location of warehouses,
companies can take two approaches:
• Undertake computer modelling to evaluate a range of theoretical scenarios in order
to identify the ideal configuration of warehouse and transport resources
• Work with selected LSPs to evaluate their propositions in terms of warehouse and
transport services
A combination of simple network modelling and inputs from larger LSPs is likely to
provide the most cost effective solution. The objective of the analysis would be to
calculate the total cost to serve for each of the options being considered. For example,
the total cost to serve comparison for using an intermediate warehouse would include:
COSTS FOR DIRECT TRANSPORT COSTS USING INTERMEDIATE

TO MARKET WAREHOUSE
Transport costs from Ireland direct to Transport costs from Ireland to the
customers, agents or distributors intermediate warehouse
Storage and handling costs at the

intermediate warehouse
Inventory costs, including any risks of

write off or damages
Transport costs from the intermediate

warehouse to customers, agents or
distributors
TOTAL COST TO SERVE TOTAL COST TO SERVE
The analysis would also consider to time to fulfil orders and also the impact on shelf
life. Alternative locations for the intermediate warehouse would be considered and
evaluated.
The project team could be made up of a mix of internal and external resources, with
access to modelling tools. The timescale for this process would be between two and
four weeks.
16
4.
COST REDUCTION
INITIATIVES
17
Exporting to multiple Against this background it is important

that suppliers can manage the logistics
• Lead times along the supply chain
• Delivery frequency to the customer
markets adds complexity operations and control the execution
• Shelf-life of the products and the
processes. It is likely that a review of
to the supply chain operator and systems capability is amount demanded by the customer
and increases the required. • Production batch size constraints
• Costs of materials, processes and
requirements for holding inventory
effective, planning and REVIEW SYSTEMS FOR • Costs of customer service failure
operations. There is a OPTIMISED PLANNING
Due to the complex nature and
potential increase in the AND EXECUTION interactions of the parameters used in
When starting their businesses, SMEs the review it may need to be supported
number of product SKUs, often turn to spreadsheets to plan, by more detailed modelling.
particularly if separate execute and monitor their supply chain
The objectives of modern day supply
operations. This has the advantages
language packs are of being low cost, speedy to set up
chain management within the food and
beverage industry is to be lean and as
required. The increase and easy to use as it is based upon
a widely accepted toolset. As the
agile as possible. In order to achieve
this, a number of strategies should be
in product SKUs has business grows and expands into new
considered:
markets the number of dimensions of
implications along the contacts, planning and control grows • Focus on making changeovers as
supply chain, including exponentially. There is therefore a need efficient and speedy as possible
for more formalised planning which • Focus on minimising waste
forecasting, raw may involve considering an entry level
• Collaborating with customers to share
material and packaging Material Requirement Planning (MRP)
system or a Sales and Operations demand forecast information in order
planning, production Planning (S&OP) tool. The objectives of to minimise forecast error and hence
reduce inventory
this would be to:
planning, stockholding, • Collaborating with suppliers to share
• Improve forecast accuracy and
warehouse layout, maintain a single forecast for the
information in order to improve
the availability of raw materials and
picking activity and business packaging without requiring excessive
• Synchronise inbound and outbound
load sizes. The extra operations
stock
• Monitoring of KPIs related to service
complexity can impact • Plan raw materials and packaging level (e.g. OTIF), product availability
upon KPIs and costs, requirements and production costs
• Plan resources in terms of people and
as production runs equipment
Once service level strategies have
successfully been implemented at a
become shorter with • Reduce wastage base level, more sophisticated methods
for targeted and differentiated service
more changeovers Introducing more sophisticated systems
levels and related price regimes can be
will impact on all parts of the business
and possibly increased and should be seen as a company-wide
considered.
wastage. Production initiative and all personnel will need to be
retrained to some level. Investment costs
batch sizes may dictate in terms of time and money are likely to COST REDUCTION
inventory levels, which be high but payback should be expected INITIATIVES
in two to three years.
may conflict with shelf Within a manufacturing company there
are always opportunities to reduce costs.
life requirements. Some areas for potential cost reduction
EVALUATE THE would include:
INVENTORY VS SERVICE • Focus on the end-to-end supply
TRADE-OFFS chain, including purchasing,
Understanding the relationships manufacturing, logistics and customer
between inventory policy, production service. An added cost in one area
efficiency and service levels is key to any (e.g. stronger packaging) could
manufacturing business. The inputs to result in more savings in other areas
a service strategy review would typically (e.g. reduced transport costs due to
include an appreciation of the following: improved pallet fill)
18
• Review the volumetric dimensions of CONTINUOUS IMPROVEMENT (CI) METHODOLOGY

products:
Some improvements in supply chain management may result in a major step
o Do the case sizes and items change with substantial benefits. There is however a need to continuously review
per case match the shelf an operation in order to seek out small improvements which when added together
configuration or menu plans of contribute to significant cost savings, improved quality and reduced waste. This
the customers? process of continuous improvement or marginal gains requires a proper framework
o Can the number of cases per for participation, suggestion, implementation and measurement. All of the company’s
pallet be increased in order to employees should be encouraged to participate in the process.
reduce transport costs, which
tend to be on a pallet rate?
o Can pallets be double stacked
on vehicles in order to improve
CT P
utilisation?
LA
A
IMPROVED
N
PURCHASING
Many manufacturers don’t give
K
purchasing or procurement sufficient
EC
focus because of the senior
management’s time constraints and the D
specific set of skills that are required.
Some ideas for improved purchasing H C O
would include:
• Understand the basics of purchasing,
including the procurement cycle
• Compare or benchmark the costs
of supply chain elements with
Plan: Plan a change or test aimed at making an improvement
similar companies. The rates for
distribution and transport tasks tend Do: Carry out the change or test, initially at a small scale
to be independent of product, but a
function of volume, temperature and Check: Study the results and identify what was learnt and what went wrong
location Act: Based upon the results either adopt, abandon or modify and re-run
• Work collaboratively with suppliers to
identify opportunities to synchronise
planning, improve visibility and SUPPLY CHAIN RISK MANAGEMENT AND
reduce costs CONTINGENCY PLANNING
• Seek to reduce the number of When expanding into new overseas markets, companies will experience higher
suppliers in order to gain economies levels of risks in their operations and supplier relationships. Irish exporters should be
of scale and reduce time to procure proficient in risk management and contingency planning. The subject of supply chain
• Attempt to convert as many fixed risk management is the remit of the Chartered Institute of Purchasing and Supply
costs to variable ones (CIPS), who have developed a Good Practice Guide and an online assessment tool. As
part of this CIPS has developed a resilience model, which is structured as:
RISK RISK SUSTAINABILITY RISK

INFLUENCES CONSEQUENCES RISKS ELEMENTS
Internal Operational Social Legal
External Financial Economic Governmental
Reputational Environmental Ethical
Geographical
Functional
Performance
Technical
Further information on CIPS services on supply chain risk management can be found
on their website – www.cips.org
19
5.
POSSIBLE BREXIT
SCENARIOS
20
The UK acts as a land

bridge for fast access REQUIRED CUSTOMS PROCESSES AND
CHECKS ADDING TO TIME AT BORDERS
for Irish products to
reach European and
international markets. SCENARIO
The Irish Road Haulage THE UK AND EU DO NOT OPERATE WITHIN THE SAME
CUSTOMS REGIME.
Association (IRHA)
estimate that 80% of
IMPLICATIONS
Irish freight bound for Additional processes and checks would be required at all border controls,
Europe passes through potentially increasing the time to travel between the UK and EU countries.
There are two elements that would influence the total time to travel
the UK. The scenarios through the border control. The first is the additional time to process each
for possible Brexit consignment or vehicle and the second is the potential time queuing due to
the imbalance between demand and processing capacity. Without an increase
outcomes are numerous in customs processing capacity at the borders, serious queuing could occur
and interconnected. on the adjoining road network.
In this section only The additional processing time would depend upon the complexity of the load
being carried. It is estimated that for a simple load the additional time would
the scenarios which be of the order of 5 minutes. For vehicles carrying multiple consignments
then the time could be significantly higher. Much will depend upon the
have supply chain sophistication of the border control systems that are finally implemented and
consequences are whether export and import processing can be combined.
reviewed. The imbalance of demand and processing capacity is expected to be a
short term problem and will depend upon the timescale of investment by
governments into border control systems and resources.
Increasing the time at the borders would have a number of impacts:
• Eat into drivers’ available legal hours, reducing the drive time at the end of
the ferry crossing, which may lead to additional overnight stops
• Add to operators costs as the driver and vehicle are unproductive for a
period of time
• Could result in missing a scheduled ferry crossing incurring even more
significant delays
• Reducing the available shelf life of products being carried, with the
possibility of restricting certain perishable products from key markets or at
least reducing their value
• Where lead time is critical, the Irish products would be less attractive to
European buyers
CONTINGENCY OPTIONS
• Consider new routes to reaching European and international
markets
• Increase stock in the local market
• Hold stock at intermediate warehouse
21
ADDITIONAL
DOCUMENTATION,
SYSTEMS AND FEES
SCENARIO
THE UK AND EU DO NOT OPERATE
WITH THE SAME ADMINISTRATIVE AND
REGULATORY REGIME, REQUIRING
ADDITIONAL DOCUMENTATION,
VETERINARY CONTROLS AND TARIFFS ON UK IMPORTS
CERTIFICATIONS.
SCENARIO
IMPLICATIONS
THE UK AND EU DO NOT OPERATE THE
Possible increase in fees and systems requirements, SAME TARIFF FRAMEWORK.
potentially leading to an investment in new IT
systems. These issues are heightened where
mixed pallets or groupage loads are processed, as
documentation for individual consignments and IMPLICATIONS
products may be required. New tariffs are introduced on exports to and imports
The additional costs for a vehicle to be processed from the UK.
will depend upon the complexity of the load The impact of a change in tariffs would be that
being carried. As an estimated guide, current fees the products being exported from Ireland to the
for customs clearance range from €40 - €50 for UK would be more costly when compared with
simple loads but could be higher for loads with home produced equivalents or imports from other
multiple consignments and products. countries. If the UK were to replicate the EU’s
Most Favoured Nation (MFN) tariffs they would
be significant for a wide range of products: Dairy
CONTINGENCY OPTIONS (35%), Confectionery (21%), Beverages (19%), Animal
products (17%), Cereals (16%) and Fish (11%). Tariffs
• Consider new routes to reaching European would also be applied to finished products and raw
and international markets materials exported from the UK to Ireland.
• Improve processes and systems With this extreme scenario, Irish producers would
need to review both their manufacturing sourcing
options and their target markets. This would change
the volume of product being exported by individual
companies to the UK.
CONTINGENCY OPTIONS
• Expand exports to other European and
international markets
• Hold stock at intermediate warehouses
22
BORD BIA FOOD AND DRINKS SUPPLY CHAIN LOGISTICS STRATEGIES FOR SUCCESS
UNFAVOURABLE EURO:
GBP EXCHANGE RATE
SCENARIO
THE EXCHANGE RATE BETWEEN EUROS
AND STERLING REMAINS AT A LOW
LEVEL OR DECLINES FURTHER.
UK IMPOSES CABOTAGE
IMPLICATIONS RESTRICTIONS
The price of Irish goods are high compared to UK
home produced equivalents.
At the time of the UK announcing the European SCENARIO
Referendum Act in June 2015 the exchange rate
was £0.74 to the Euro. On the announcement THE UK IMPOSES RESTRICTIONS ON
of the result of the referendum the exchange CABOTAGE FOR EU HAULIERS.
rate increased to £0.81 to the Euro. Since the
referendum the exchange rate has been volatile,
following EU and UK negotiations, and at the IMPLICATIONS
end of 2017 was £0.88 to the Euro. Projections Cabotage rules currently allow non UK transport
for the future are dependent upon the final companies to undertake collection and delivery
results of the negotiations and the timescales for operations within the UK. Cabotage is seen by many
implementation. Current forecasts for 2018 are in the UK logistics industry as reducing the quality
of the order of £0.86 to the Euro. Ongoing, the of operations and putting downward pressure on
exchange rate will reflect the relative strengths of charge rates and drivers’ earnings. The argument
the UK and EU economies. is that, although this might lead to lower prices in
the short term, these factors make it difficult for UK
transport companies to recruit drivers. Irish hauliers
CONTINGENCY OPTIONS could be impacted if, post Brexit, the UK seeks to
• Expand exports to other European and reduce the level of cabotage with the transport
international markets industry, which may lead to an increase in transport
prices to the UK.
• Hold stock at intermediate warehouses
CONTINGENCY OPTIONS
• Review implications with existing LSPs
• Identify alternative LSPs
23
6.
GUIDE TO LOGISTICS
SERVICE PROVIDER
SELECTION
24
As diversification WHY OUTSOURCE

opportunities for Irish INTERNATIONAL
LOGISTICS?
exporters increase, the
Outsourcing logistics services allows
need for efficient and producers and manufacturers to focus
cost effective logistics on their core business, removes the
need to invest in assets such as vehicles
services will grow. The and warehouses and can improve the
efficiency of small delivery volumes.
landscape of the LSP Many companies find it economic to run
market is continuously their own domestic logistics services and
this can provide interaction with the final
changing through customer. Internationally, however, the
strategic alliances and challenge to fill vehicles, manage drivers
and find backhaul routes is much more
mergers. The scope acute, and the benefits of outsourcing
are greater. LSPs will face similar
of services is evolving challenges if working in an unfamiliar
with the developments market or route. Finding the right partner
or partners as business changes is
of multi-modal and therefore critical.
containerisation and the
blurring of roles of LSPs
and freight forwarders in
managing international
transport. It is likely
that exporters will seek
a range of services and
will be less reliant upon
their local incumbent
provider. This section
provides a framework
for selecting LSPs and
managing successful
ongoing relationships.
25
LOGISTICS SERVICE PROVIDERS THE IMPORTANCE OF

– WHAT TYPE OF SERVICE IS REQUIRED? “GROUPAGE” SERVICES
The table below describes the different services offered by LSPs and freight Exporters with high volumes can expect
forwarders. Different providers tend to specialise in different services, and as competitive rates from a range of LSPs. For
logistics costs are related to efficiency and achieving a critical utilisation, it is smaller exporters with less than full load (LTL)
worth finding the right profile of provider to match requirements. shipments, picking the right partner and the
right route requires more research and care.
In addition to the services listed below there are also specialist services such as: After Brexit, groupage loads to the UK may
• Hanging meat distribution require significantly more complex customs
related administration than full loads. Having
• Transport of fish and seafood (including Vivier) a provider with competency in this area will
• Live animal transport be important. It may be worth considering
other supply chain fulfilment strategies such
• Container transport for short sea routes to Continental Europe as stock holding in the EU mainland or UK,
whichever is the destination market.
SERVICE SPECIFIC DESCRIPTION WHEN TO USE

CATEGORY SERVICE
FREIGHT Shipping Freight forwarders act as intermediaries between shippers (e.g. For one off
FORWARDING and customs exporters) and the carriers (road transport, sea freight, rail, air freight shipments,
processes services). They do not physically transport the goods themselves irregular or small
but have long term relationships with carriers. They can organise volumes,
FTL, LTL and container services. They have expertise in customs non-palletised
processes and carry these out on behalf of their clients.
goods and/or global
exports
TRANSPORT Full truck In this type of transport, the entire trailer or container movement Regular full truck
SERVICES load or FTL is contracted by a single customer, normally from a single source movements,
transport; location to a single destination. On arrival at the destination the particularly in Europe
international load may be broken up into individual consignments for onward
distribution, which is usually part of a different service. FTL
haulage movements can be multimodal, i.e. have road/sea/road or road/rail/
road movements. The principal LSP may subcontract part, or all, of
the journey to a subcontractor.
Groupage or This service provides a solution for companies wishing to ship Smaller volumes of
LTL transport smaller quantities (usually palletised) to a specific location. goods that can be
transhipped
Container Used for transporting larger volumes over longer distances. Usually Large volumes over
transport takes longer than road transport but can be less expensive. Goods long distances
may be packed in bulk rather than palletised.
Parcel services Similar to groupage services but for smaller items. Important for Very small volumes
samples.
WAREHOUSING Storage and Involves the holding of stock for more than 24 hours, reporting on Non-perishable
SERVICES handling stock held by SKU and the despatching of stock based on orders goods
Bonded A bonded warehouse is a building or other secured area in which Goods imported into
warehouse goods that are liable for import duty or VAT may be stored or a trade area or liable
manipulated without payment of duty. This allows the payment of for a specific duty
duty to be deferred.
Tempering The service of bringing frozen products to chill temperature prior Goods shipped
to despatch (in controlled conditions to prevent condensation or frozen (to extend life)
product damage) but sold chilled
Picking Breaking down bulk pallets or stock into specific orders, typically for Local call off
the final customer required
Customs Warehousing services can include customs processes on behalf of In Ireland or in
declarations the shipper for products despatched from their location continental
warehouse
VALUE ADD Customisation Labelling, co-packing Local customisation;
SERVICES local language
labelling
26
SERVICE CATEGORISATION
The strategies that procurement departments employ vary according to the relative importance of the purchase decision and the
size of the population of potential suppliers in the marketplace. Different types of services and goods procured are often categorised
using a matrix (known as a Kraljic matrix) as shown below:
HIGH
BOTTLENECK STRATEGIC
Unique, or special, requirements Service of strategic importance
Little or no choice of supplier and critical to business success
COMPLEXITY/UNIQUENESS
Risk to business continuity Service complex and cannot be

‘traded’
Relatively low spend on service
Cost or profit impact significant
ROUTINE LEVERAGE
Standard service specification Standard market traded goods or
Several potential suppliers services
Service suitable for tariff pricing Commodity trading
Relatively low cost or profit impact Cost or profit impact significant
LOW
LOW RELATIVE SPEND OR SAVINGS POTENTIAL HIGH
The strategies and activities that a Bottleneck: specialist services with

• with picking services, which cannot
company might employ in procuring a limited choice of suppliers but be easily moved to a new supplier.
the various logistics services would be relatively low spends or cost saving Strategic services require considerable
determined by where they fitted into the opportunity (e.g. some Groupage investment on both sides and should
matrix: services to low volume destinations be kept to a minimum. Appropriate
or specialist services such as Vivier actions for this type of purchase
Routine: standard services with
• would be:
transport). Where possible, creating
a choice of suppliers and a clear
Bottleneck services should be
specification (e.g. an FTL service o Senior management engagement
avoided. Appropriate actions for this
from Ireland to the UK). Most logistics with the supplier
type of purchase would be:
services will fall into this category, o Joint improvement or
and the aim should be to simplify o Securing supply by ensuring development plans
specifications and identify suppliers so appropriate contracts with the
that the required logistics services are o Focus on Supplier Relationship
supplier
in this category. Appropriate actions Management with regular face to
o Looking at alternative formats or face meetings
for this type of purchase would be: solutions to increase choice or
o Joint investment to access new
o Identifying alternative suppliers reduce dependency
opportunities
o Running tenders to select suppliers o Seek alternative suppliers
Leverage: standard goods and
•
o Comparing standard rate cards o Perform due diligence on LSP to
services which can be traded or
from suppliers and setting up tariff ensure they are stable and able to
tendered but have high cost saving
based contracts supply the service
potential are classified as Leverage.
o Simple, time minimising, Strategic: every company will
• Commodities such as fuel are
management of contracts have a small number of supplier examples of this type of purchase. It
o Consider placing multiple routes relationships that will be critical is unlikely that SME companies have
with the same supplier to minimise to the business’ development and many Leverage logistics services.
management time have the potential for significant
cost or profit impact. For many SME
o Reassessing the market and
companies, no logistics services will
tendering again every one to three
fall into this category. An example
years
might be a strategic European hub
27
1
BUSINESS
REQUIREMENTS
7 2
GET THE
REVIEW
PERFORMANCE DATA
SEVEN STEPS TO
OUTSOURCING
LOGISTICS SERVICES
All companies outsourcing logistics

services go through a similar cycle
of deciding what they need, finding
and selecting suppliers and reviewing
performance. The main steps can
be summarised in the cycle diagram
3
below. Even if a particular supplier has
6
been recommended it is worth going
through these steps to ensure that the
relationship and service are set up on SEARCH FOR
CONTRACT AND the right footing. The category of service SUPPLIERS
IMPLEMENTATION being procured will determine the
actions taken at each stage.
4
5
MEET AND
PRICES AND
PROPOSALS
SELECT
28
STEP 1
IDENTIFY THE STEP 3

BUSINESS
REQUIREMENTS
SEARCH FOR AND
Finding the right logistics partner is COMPARE SUPPLIERS
critical to establishing a successful STEP 2
export business. Before asking
for quotes, or starting to search Many exporters use the same LSP
for an LSP, exporters should ask year after year while others rely on
themselves the questions below. local companies to carry out their
Even those who have been GET THE DATA export services. Although both of
exporting for many years should these approaches may be good
run through these questions solutions, it is always worth looking
periodically: at alternative providers periodically,
Any quotation received from
particularly at times of change
• What are the key export one or more LSPs will be more
to the business or within the
markets? How might these accurate and is likely to be more
market. Existing or local LSPs may
change in the future? competitive if the data provided
not provide competitive services
• What will the impact of Brexit is complete and credible. This
to new, more distant markets.
be on exports – are the does not mean that LSPs expect
Identifying alternative suppliers is
incumbent LSPs or current the business to remain the same
important in avoiding Bottleneck
routes vulnerable to a hard as it is now, but costing is easier
services.
Brexit? if today’s profile is shared along
with how it is expected to change An extensive list of alternative
• Should consideration be given in the future. A template for data LSPs may be found on the Bord
to holding strategic stock in collection is attached in Appendix Bia website, where they can be
certain markets to reduce 3 but typically the following searched for by destination market,
fulfilment time? information should be provided to temperature regime and type of
• How large will consignment potential service providers: service. It is also worth getting in
sizes be? What will be the touch with Bord Bia’s local offices
required mix of full vehicles and • Product or category description
in the target markets.
groupage services? (e.g. Fish, cheese, meat, alcohol)
• Ship from address, showing The objective of the search
• What constraints, such as
where the goods will be should be to draw up a shortlist of
shelf life or customer ordering
collected from companies to approach in order to
patterns, might determine the
ask them for a Request for Pricing
frequency and load size? • Destination markets and
(RFP) or a Request for Information
• What are the time constraints delivery addresses including
(RFI). The criteria for selection on
on deliveries? Does this local postcodes
to a shortlist could include:
influence the choice of mode • Annual volumes by destination
of transport, for example road, in logistics units (pallets if • Personal recommendation
sea or air? palletised, tonnes if moving in from a trusted source
• Is there clear visibility of the bulk, cases if moving in parcels) • A website that gives a clear list
routes the exports take and the • Average or target shipment size of services offered, including
transport partners the provider markets served and types of
• Frequency of shipments or
uses? services offered
any specific shipment timing
• Is there technology available requirements • Responsiveness to any initial
in the marketplace that would contact, whether a call or email
• Any seasonal variations in
provide benefits? or web enquiry
volume or delivery frequency
• What type of service is being • Relevant accreditations
• Temperature regime, such as
sought: Routine, Bottleneck, ambient, chill, frozen • Membership of relevant trade
Strategic or even Leverage (see bodies
• Stock holding requirements
above)?
• Accreditation or licence
requirements
• Value of the product (for
insurance purposes)
• Any special requirements such
as bonded warehouses
29
STEP 4
GET PRICES AND PROPOSALS
For LSP sourcing decisions it is sensible to go through a two-stage

procurement process:
(1) Request for Information (RFI) to understand the supply market STEP 5
better and to get more information on potential LSPs in order to
reduce the number of companies at RFP stage.
(2) Request for Pricing (RFP) to obtain firm pricing and agree terms
and conditions. In order to get firm pricing data on the required DISCUSS,
service, the exporter will need to provide volumes, frequency and NEGOTIATE,
products. SELECT
Many companies will want to go straight to the RFP stage, which
makes sense for SME exporters, who might not get a good response
to an RFI. The selection process for logistics
services must vary depending on
For both processes it is important to ask all of the shortlisted LSPs the importance to the business. If a
to respond to the same set of questions and receive the same data company is being selected to deliver
on the services required. Large buyers of routine logistics services goods regularly to a key export market
may use online platforms to facilitate data collection from providers it is important to meet with them and
and competitive bidding on routes. Most companies, however, will allow time to discuss the service and
use Word templates and Excel spreadsheets to gather responses. contract in order to decide whether they
Template examples of RFP and RFI documents in these formats are are the ideal partner.
given in Appendices 4 and 5.
Even for Routine services, don’t focus
Whatever method is used, it is important to agree the procurement too much on price, although it is
process and the selection criteria internally before starting, and then important. Also look at aspects such as
communicate it to the LSPs. It is important that there is clarity on the the supplier’s responsiveness, lead times,
terms under which any pricing is offered. Most export movements frequency routes are operated, their
to continental Europe will be covered by CMR convention (see groupage capability, load security and
Glossary), which sets limits to liability and the carrier’s responsibilities. subcontracting processes. The objective
Movements that transit the UK are covered by CMR. Movements to should be to achieve best value rather
the UK only are not typically covered by CMR and Irish Road Haulage than lowest cost.
Conditions of Carriage (www.rha.uk.net/membership/member-
benefits/conditions-of-carriage-and-storage) may be quoted instead, When procuring a strategic service,
or other terms and conditions proposed. In this case it is important relationship and long term performance
when comparing bids to ensure that terms and conditions are and alignment will be particularly
compared as well as price. important.
Exporters should take particular care regarding the terms of the It is crucial to understand the network
LSP’s Goods in Transit insurance levels, to ensure that the value of partners and sub-contractors that
of goods covered is adequate in case of loss and that the use of the potential LSP plans to use. Careful
sub-contractors does not invalidate the prime LSP’s liability and use of partners and sub-contractors can
responsibility for the services. improve efficiency and therefore cost
competitiveness, but the LSP needs to
Use of bonded warehouse services should also be treated with ensure that the integrity of the products
care. LSPs must be able to provide details of their registration with (e.g. cool chain, visibility) will be
the relevant local country tax authority and be clear as to which maintained and that they have adequate
jurisdiction they will hold bonded stock. contracts and checks on insurance with
their sub-contractors.
Smaller LSPs can be more competitive
in certain countries and are less so
in others. It is therefore important to
undertake a separate selection process
for each country.
A checklist of selection criteria is
included in Appendix 2.
30
STRATEGIES FOR SUCCESS
STEP 6
CONTRACT AND
IMPLEMENTATION
Having selected the preferred partner, the

written contract for services should stipulate STEP 7
KPIs such as pricing, terms and conditions
and standards of performance (such as
agreed transit time). This will be a longer
and more complex document for strategic REVIEW PERFORMANCE
services than for routine ones. AND BUILD THE RELATIONSHIP
A shared implementation plan and
action list should be drawn up by both
parties. This may range from a short list Once operational it is important to follow the
of communication steps to a complex management reporting and meeting schedule
plan over several months where specialist that was agreed in the implementation phase.
equipment or new processes are required. Meetings don’t need to be face to face but some
Even the simplest plan should include the form of quarterly review of performance, challenges
following: and sharing of plans is important. This builds the
relationship and is something that will help both
• Agreeing and signing the contract for parties if there are operational challenges in the
services future.
• Giving notice to any incumbent suppliers The regular reviews should include a review of the
• Exchanging precise ship-from and ship-to KPIs which were set for the contract (see Appendix 6
details for possible KPIs) and whether these meet the agreed
• Agreeing how orders are transmitted to or specified levels. Where there are issues these
the new supplier should be discussed and a joint action plan agreed.
• Agreeing the Service Level Agreements When undertaking a subsequent tender for
(SLAs) that define the standards the services it should be based upon a good
expected in the contract, e.g. transit understanding of how the current provider has
times, collection on time performance, been performing. Testing the market periodically is
acceptable stock losses (for warehousing a healthy process and should ensure that the right
contracts) partners are employed over the long term.
• Management reporting requirements (if
not laid out in RFP) including KPI reporting
that the supplier should provide
• Setting up the LSP in the accounts system
• Checking accreditation, examine
equipment as part of HACCP controls
• Agreeing account management and
operational contacts
• Agreeing frequency of meetings during
the first three months and subsequently
• Loading and transit trials if required
31
GUIDANCE ON BREXIT
PREPARATION – WHAT
TO LOOK FOR IN AN
LSP?
Even when industry receives clarity on o Warehousing operations
the trading relationship between the (with capability in the relevant
EU and UK post-Brexit, exporters can temperature regimes) in or
increase their options and resilience near the target markets or at
through working with LSPs that have the strategic ports in the EU
following capabilities:
o Transhipment hubs relevant for
• AEO accreditation – this is the easiest the target market
way to judge whether the LSP is
preparing for Brexit and is likely to be • A range of established routes to
a vital requirement going forward. the target markets and a clear
understanding of how these might
• The LSP demonstrates an awareness need to change with Brexit.
of the issues and risks related to Brexit
and has plans developed to cover • Good relationships with the major
these risks. shipping lines including those with
direct continental routes.
• Customs experience and capability –
ideally already have systems in use for
Norway and non-EU markets.
• Either extensive operations in the
target export markets or a strong
network of partners that can be used
if the requirements change, including:
32
7.
CONCLUSIONS AND
RECOMMENDATIONS
FOR EXPORTERS
33
The contents of the Although the specific requirements

of individual exporters will vary,
System Selection – identify the
•
requirements for any new supply
Guide highlight that recommendations include: chain systems and where possible
select standard market leading
although Brexit may • Prioritisation – due to resource
options that will provide the important
constraints, it may not be feasible
force the pace of to undertake more than one or two
interfaces to supply chain partners’
and Revenue systems.
change, exporting to projects at a time. Each project, once
identified, should be evaluated in • L
SP Selection – follow the process
new European and terms of its resource requirement, described in this Guide to ensure
international markets cost, timescale and likely benefit. The a thorough assessment of the
projects should then be ranked in LSP options available and to make
requires considerable terms of benefits and costs. judgements against appropriate
focus in order to identify • Project Manager – with an
criteria.
abundance of potential projects, it • E
stablish KPIs – monitoring the
appropriate supply chain is important that an internal project performance of the selected LSPs
strategies, implement manager is identified or recruited. will aid the management process and
provide a benchmark and template for
new systems, recruit or Recruitment and Training –
•
future tenders.
international exporting requires
train staff and select companies to have in-house • E
xternal Resources – consider
ideal logistics partners. resources that are competent employing external resources, with
in dealing with the supply chain data collection, visualisation and
processes, systems and partner modelling capability, to undertake
relationships. more complex analysis of supply
chain design options
Market Data – in order to enable the
•
evaluation of supply chain trade-offs, • E
xternal Benchmarking – consider
it will be necessary to gather indicative external resources to undertake
prices and market data. benchmarking of the supply chain
performance and costs.
Agents and Distributors – as part
•
of the marketing and logistics mix, • Co-opetition – sharing ideas
the role of agents and distributors in and resources, which are not
the target local markets needs to be commercially sensitive, with other
reviewed. exporting companies can be
advantageous. Consider identifying
LSP Resources – it is important to
•
appropriate companies to discuss
understand the role of individual LSPs
collaboration opportunities.
in the supply chain and to identify
those that are most likely to provide Bord Bia has implemented an online
the current and future services database of LSPs’ services that are both
required. It is then possible to discuss International (between Ireland and
opportunities and to provide indicative major European countries) and National
costs for scenario evaluation. (within each of the major European
countries). This is an invaluable source
AEO Certification – achieving
•
of information for researching the LSP
AEO status should be a priority for
marketplace and is available at www.
any company wishing to export
bordbia.ie.
on an international basis and as a
contingency for future business to
the UK. Ensuring that supply chain
partners are also certified is crucial.
34
APPENDICES
35
APPENDIX 1 CURRENT FERRY CROSSINGS
FROM TO TRANSIT OPERATORS FREQUENCY MIX OF COMMENTS

TIME TYPE
DUBLIN Holyhead 3hrs Stena All year round, 4 sailings Passengers More accompanied
30mins Irish ferries per day & Freight
All year round, 4 sailings
per day
Liverpool 8hrs P&O Irish Sea All year round – 2 sailings Passengers More accompanied
per day & Freight
Liverpool 8hrs Seatruck 10 per week Freight Unaccompanied
Heysham 8hrs Seatruck 7 per week Freight Unaccompanied
Cherbourg, 19hrs Irish Ferries Seasonal but all year, varies Passengers
France by month, see Notes. & Freight
Zeebrugge, 36hrs CLdN 4 sailings per week Freight
Belgium
Rotterdam, NL 2days CLdN 5 sailings per week, Freight ConRo, containers
1hr 2 LOLO only (containers)
Hirtshals, 4days CLdN 1 sailing per week Freight
Denmark 1hr
Gotenburg, 3 Days CLdN 3 sailings per week Freight
Sweden 9hrs
Esbjerg, 3days CLdN 1 sailing per week Freight
Denmark 9hrs
Lexioes, 2days CLdN 2 sailings per week Freight
Portugal 12hrs
ROSSLARE Pembroke 4hrs Irish Ferries All year round, Passengers
2 sailings per day & Freight
Fishguard 3hrs Stena All year round, Passengers
15mins 14 sailings per week & Freight
Roscoff, 16hrs Irish Ferries Some seasonality, Passengers
France 30mins 1 sailing per week & Freight
Cherbourg, 18hrs Stena All year round, Passengers
France 30mins Irish ferries 3 sailings per week & Freight
CORK Roscoff 14hrs Brittany Ferries 2 sailings per week, Passengers
March to October only & Freight
Santander 26hrs Brittany Ferries 2 sailings per week, Passengers
March to November only & Freight
BELFAST Cairnryan 2hrs Stena All year round, Passengers More
22mins 5 sailings per day & Freight accompanied
Liverpool 8hrs Stena All year round, Passengers More
13 sailings per week & Freight unaccompanied
Heysham, 8hrs Stena All year round. Freight No LOLO

Lancs 12 sailings per week.
WARREN Heysham, 8hrs Seatruck All year round. Freight Unaccompanied

POINT Lancs 11 sailings per week (12 berths only)
36
APPENDIX 2 LOGISTICS SERVICE PROVIDER SELECTION CRITERIA
The criteria in the table below are examples that can be used to support the selection of a logistics service provider. Some of these
will be non-negotiable and if an LSP is not capable of meeting the criteria they would not be considered. The criteria will need to be
balanced against each other (see below) and the relative importance of each one will vary by type of service (e.g. Routine, Strategic)
and by a client’s business. For example, a fresh seafood exporter will place more emphasis on transit time and reliability than a
powdered milk supplier.
This list is designed to give ideas for exporters to select their own, relevant criteria.
CRITERIA NOTES
TRANSIT TIME How long is the transit time to the target market? Is this reliable or seasonal? Will this leave
enough shelf life on the product?
SCHEDULE AND FREQUENCY Are the frequencies of the deliveries sufficient? Will they be enough if the business expands?
OF DELIVERIES
ROUTES Are the routes suitable and fast enough?
ESTIMATED COST OF THE Ensure that price comparisons are made based on the likely load size. Include any extra
SERVICE charges or over-riders.
SUITABILITY OF SHIPPING Is the LSP sending accompanied or unaccompanied loads or containers? Is this right for the
METHOD business?
MARKET EXPERTISE Does the LSP understand the destination market? Have they worked there for a long time?
USE OF SUBCONTRACTORS May provide efficiencies but could be issues with liabilities if stock is lost or damaged
OR PARTNERS
WAREHOUSING SERVICES Can the LSP offer warehousing? Will it be required in the future if not now?
AVAILABLE
PERSONAL RELATIONSHIP What is the culture of the LSP? Are they responsive and easy to deal with?
OR FIT
REFERENCES Follow up on references given
OTHER CUSTOMERS SERVED Credible list of customers? Are any of them known?
LENGTH OF TIME COMPANY Does the company have a long history of working on these routes?
HAS BEEN OPERATIONAL
IN MARKETS OR ROUTES
REQUIRED
FINANCIAL STATUS From financial searches
ACCREDITATIONS Do they have the right accreditations to meet requirements?
TERMS AND CONDITIONS Have they accepted the contract and terms? Are they insuring the goods for sufficient value?
KPI ACCEPTANCE Will they provide management reports and KPI reporting?
BREXIT READY Are they aware of the risks associated with Brexit? Do they have AEO status? Are they looking
at other routes?
Where exporters have a choice between several suppliers a Balanced Scorecard can be used to provide a systematic review of the
relative strengths of the different LSPs. With this approach, a few criteria are selected and weighted for their importance. Each LSP is
then scored against each criteria to identify the best supplier. This approach is recommended for Strategic services.
37
SHIPPER’S BASE DATA
The data collected in the table below is normally common to all destination
markets and delivery addresses
SHIPPER’S COMPANY NAME

APPENDIX 3
ADDRESS
MAIN CONTACT - NAME
EMAIL
TELEPHONE NUMBER
DESCRIPTION OF
PRODUCT(S)
TEMPERATURE Frozen/Ambient/Chill
REQUIREMENT
LOGISTICS SERVICE FTL/Groupage/Parcel/other If other, specify here:
REQUIRED
38
PRODUCT VALUE In Euros; replacement or cost value to establish insurance requirements
PRODUCT FORMAT Palletised/ Non-palletised If non-palletised specify

format:
PRODUCT AVERAGE WEIGHT Kg per Specify unit of carriage e.g. per pallet, per container,
per case
SHIP FROM ADDRESS
(IN IRELAND):
ACCREDITATIONS REQUIRED
FROM LSP:
OTHER PRODUCT OR
SERVICE RELATED
REQUIREMENTS
DATA COLLECTION TEMPLATE FOR LOGISTICS SERVICE CONTRACTS
DESTINATION DATA
SHIP TO ADDRESS: DESTINATION 1 DESTINATION 2 DESTINATION 3 DESTINATION 4
ADDRESS LINE 1
ADDRESS LINE 2
POSTAL CODE
COUNTRY
AVERAGE LOAD
SIZE FOR EACH
DESTINATION
TARGET SHIPMENT
FREQUENCY FOR
EACH DESTINATION
STOCK HOLDING IN
MARKET REQUIRED?
IF YES, AVERAGE
39
STOCK HOLDING
BONDED
WAREHOUSING
REQUIRED?
MONTHLY JAN/ FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
OR PERIODIC PERIOD
FORECAST 1
MOVEMENTS
DESTINATION 1
DESTINATION 2
DESTINATION 3
DESTINATION 4
UNITS FOR e.g. pallets, tonnes, containers

MOVEMENT DATA
LSP’S COMPANY NAME
ADDRESS
MAIN CONTACT - NAME

EMAIL
TELEPHONE NUMBER
MAIN LOGISTICS SERVICES Please specify whether you provide FTL, LTL or parcel services
OFFERED BY YOUR
COMPANY
under different temperature regimes.
SPECIALIST SERVICES Please specify any specialist services you provide for food and food related goods
TEMPERATURE CAPABILITY Frozen Yes/No Chill Yes/No Ambient Yes/No
EXPORT MARKETS SER- Please list the countries here and the routes you use (e.g. ports and sailing routes):
VICED BY YOUR COMPANY
FROM IRELAND
MARKETS WHERE YOU, Please list the countries here and the temperature regimes of the warehousing
OR YOUR PARTNERS, CAN
PROVIDE WAREHOUSING
40
SERVICES
TRANSIT TIMES AND For the following markets please provide your standard transit times and days of the week you run this service:
SCHEDULED SERVICES
Market 1 Service Market 2 Service Market 3 Service
CUSTOMS CAPABILITY Please give details of the customs related services you can provide:
ACCREDITATIONS - PLEASE Authorised Economic Operator

PROVIDE DETAILS OF THE
ACCREDITATIONS YOU BRC (Food Safety Certification - Storage & Distribution Standard)
HAVE ISO 9001:2015 (Quality Control & Management)
APPENDIX 4 REQUEST FOR INFORMATION (RFI) EXAMPLE
ISO 14001 (Environmental Management System)

A RFI will vary depend on the services required. The example below is for a company seeking a mixture of services
OHSAS 18001 (Health and Safety Certification)
Licensed bonded warehouse details
OTHER COMMENTS Please use this area to provide any further details you believe are relevant:
APPENDIX 5 REQUEST FOR PRICING (RFP) EXAMPLE
In the RFP example on the next page there is some gathering of broader information as well as a request for groupage
pricing for three markets. This would be a normal approach if there was not an earlier RFI. It is also assumed that the
RFP request is accompanied by data on the typical volumes for each destination and other relevant data.
For many Routine services, such as groupage movements to common destinations, suppliers will provide standard rate
cards. For full load and warehousing or other services they will quote as part of the RFP process. In this case it is good
practice to provide a template for pricing so that all responses are provided in the same format. It is also good practice
to use a general template, such as the example below, to capture all the non-financial data required.
41
GENERAL (NON-PRICE) RFP TEMPLATE
LSP’S COMPANY NAME
ADDRESS
MAIN CONTACT – NAME

EMAIL
TELEPHONE NUMBER
MAIN LOGISTICS SERVICES Please specify whether you provide FTL, LTL or parcel services
OFFERED BY YOUR COMPANY
HOW LONG HAS YOUR COMPANY

BEEN PROVIDING THESE SERVICES
MAIN EXPORT MARKETS SERVICED BY Please list the countries here and the routes you use (e.g. ports and sailing routes):
YOUR COMPANY FROM IRELAND
TEMPERATURE CAPABILITY Frozen Yes/No Chill Yes/No Ambient Yes/No

FOR THE SERVICE SPECIFIED IN THE RFP Please state here your assumptions for the prices provided
42
PLEASE PROVIDE A MATRIX SHOWING
COST VERSUS LOAD SIZE FOR EACH
OF THE DESTINATIONS SPECIFIED OR
COMPLETE THE ATTACHED PRICING
TEMPLATE
TRANSIT TIMES AND For the following markets please provide your standard transit times and days of the week you run this service:
SCHEDULED SERVICES Market 1 Service Market 2 Service Market 3 Service
IF YOU USE PARTNERS OR Partner or subcontractor for Market 1 Partner or subcontractor for Market 2 Partner or subcontractor for Market 3
SUBCONTRACTORS FOR ANY OF THESE
MARKETS PLEASE STATE THE NAME OF
THE COMPANY HERE
FOR ANY PARTNERS/SUBCONTRAC-

TORS LISTED ABOVE PLEASE SAY HOW
LONG YOU HAVE WORKED WITH THIS
COMPANY
LIABILITY FOR NEGLIGENT LOSSES If you work with subcontractors or partners please confirm that you accept liability for the negligent loss or damage of any goods
by your subcontractors or partners. Please state any limits to this liability.
PLEASE CONFIRM THAT YOU ACCEPT

LIABILITY FOR THE GOODS TO THE
VALUE STATED IN THE RFP DOCUMENT
PLEASE CONFIRM YOU ACCEPT THE Please confirm you accept the required terms or state the terms under which your prices apply
CONDITIONS OF CARRIAGE SENT WITH
THE RFP
CUSTOMS CAPABILITY AND Please give details of the customs related services you can provide and the costs of these
LICENCED BONDED WAREHOUSES
ACCREDITATIONS - PLEASE PROVIDE Authorised Economic Operator Please supply your operator number
DETAILS OF THE ACCREDITATIONS BRC (Food Safety Certification - Storage & Please supply the date of your last certificate
YOU HAVE Distribution Standard) and registration number
ISO 9001:2015 (Quality Control & Management) Please supply details
43
ISO 14001 (Environmental Management System) Please supply details
OHSAS 18001 (Health and Safety Certification) Please supply details
OTHER CUSTOMERS Please list some of the customers for which you provide similar services
REFERENCES – PLEASE PROVIDE 2 Reference 1: please provide the name, company and contact details:
REFERENCES FOR WHOM YOU PROVIDE
SIMILAR SERVICES
Reference 2: please provide the name, company and contact details:

FULL TRUCKLOAD (FTL) PRICING TEMPLATE
Notes to bidders:
1. Please complete cost per FTL movement for each Route you wish to bid for.
2. FTL movement costs should include collection from site and delivery to required destination.
3. Prices should have a validity of at least 12 months.
4. Please remove the example before submitting.
DATA PROVIDED BY SHIPPER LSP DATA CALCULATED LSP DATA
Ship Ship Ship Ship Ship Ship Ship Days Temp Estimated Estimated Cost Estimated Any Assumptions,
From From From To To To To of the Controlled? Load Loads Per Cost per Surcharges if any
Address Town County Address Town Postal Country Week Weight Per Trip Year (eg Fuel)
Code (Tonnes) Annum
Example Example Example Example Example Example Example M,W,F YES 12 400 €800.00 €320,000
1 1 1 1 1 1 1
€0
€0
€0
€0
44
€0
€0
€0
€0
€0
TOTAL COST PER €320,000
YEAR
GROUPAGE PRICING TEMPLATE

Notes to shippers:
1. If your goods are not palletised please amend to cases, kg etc.
Notes to bidders:
2. Template has been set up for Euro pallets – if shipping in UK pallets please amend to UK
pallet groupings. 1. Please complete the matrix below for the routes you are able to offer in Table 2 below.
3. In Table 1, please fill in the number of pallets you ship annually to each destination in each 2. Costs should include collection from site and delivery to required destination.
load size grouping, eg for destination Example 1 a shipper sent 1000 pallets in total in the 3. Prices should have a validity of at least 12 months.
year, but 800 of these were in loads of 7-12 pallets and 200 pallets were sent in smaller 4. Please list any partners you are using on these routes.
loads of 5 pallets per load. By completing this table you can compare LSPs pricing.
4. For additional Ship From addresses create a new sheet.
SHIP FROM (COLLECTION) ADDRESS: TOWN COUNTY
TABLE 1
DATA PROVIDED BY SHIPPER
ANNUAL VOLUME IN PALLETS (EURO PALLETS)(NOTES 2 AND 3)

Ship to Ship to Ship to Ship to Days Temp Estimated 1 2-3 4-6 7-12 13-18 19-24 25-30 30-33
NOTES
Address Postal Town Country of the Controlled? pallets pallet pallets pallets pallets pallets pallets pallets pallets
Code Week per Year
(Note 1)
Example Example Example Example M,F NO 1000 0 0 200 800 BIDDERS - PLEASE
1 1 1 1 REMOVE EXAMPLE
WHEN BIDDING
45
TOTAL 1000 0 0 200 800 0 0 0 0
TABLE 2
DATA PROVIDED BY SHIPPER LSP TO COMPLETE

CALCULATED LSP to COMPLETE
COST PER PALLET (EURO PALLETS)(NOTE 2)
Ship to Ship to Ship to Ship to Days Temp Estimated 1 2-3 4-6 7-12 13-18 19-24 25-30 30-33 Estimated cost Any Assumptions,
Address Postal Town Country of the Controlled pallets per pallet pallets pallets pallets pallets pallets pallets pallets per year surcharges if any
Code Week ? year (eg fuel)
(Note 1)
Example Example Example Example M,F NO 1000 €200 €180 €184,00
1 1 1 1
€0
€0
€0
TOTAL COST €184,000

PER YEAR
WAREHOUSE SERVICES PRICING TEMPLATE
Notes to shippers:
1. Please specify what type of pallets are used.
2. Complete Table 1 to give LSPs summary of your requirements.
Notes to bidders:
1. Please complete Table 2 based on the information in Table 1 and the data provided in the RFP process.
TABLE 1
TO BE COMPLETED BY SHIPPER
Stock Type Expected average pallet Expected maximum Forecast pallets in per week Forecast cases per full pallet Forecast pallets out Forecast cases picked
stock holding (1) pallet stock holding (inbound) per week per week
Ambient 0 0 0 0 0 0
Chilled 0 0 0 0 0 0
Frozen 0 0 0 0 0 0
TABLE 2
46
STOCK TYPE LSP DATA CALCULATED LSP DATA CALCULATED LSP DATA CALCULATED LSP DATA
Storage charge Estimated total Handling charge Handling Estimated Picking Estimated Total Other Assumptions
per pallet per storage charge per inbound per pallet charge total handling charge picking estimated Charges
week annum outbound charge per per case charge cost per
per pallet annum per annum annum
Ambient €0.0 €0.0 €0.0 €0.0
Chilled €0.0 €0.0 €0.0 €0.0
Frozen €0.0 €0.0 €0.0 €0.0
TOTAL €0 €0 €0 €0
APPENDIX 6 KPIS AND MANAGEMENT REPORTING

The table below gives a list of possible KPIs for international shipments. It is important that KPIs are relevant to a contract, measures
should be chosen from the list below rather than the whole list used. Some companies may weight the KPIs in terms of importance
to create a Balanced Scorecard (particularly for Strategic services) but putting the measures in place is an important first step.
KEY DESCRIPTION CALCULATION EXAMPLE COMMENTS

PERFORMANCE
INDICATOR (KPI)
Claims as a % of Claims made for loss Claims made for loss Claim of €5,000 for product Claims of relevance
freight costs or damaged goods in a or damaged goods in a scrappage following a cool are those made by the
period/ Freight invoice period / Freight invoice chain failure by the LSP. company for loss of
value for the same value for the same Carrier’s invoice for the same product by the LSP
period x100 period x100 period is €100,000. Period’s
value for this KPI is therefore
5%
Number of claims Number of claims made Number of claims in One claim of €5,000 is made Either this KPI or the
as a proportion of total a period/number of following a cool chain failure one above would be
deliveries in the period deliveries in the same by the LSP; during the same used, but not both
period period 100 deliveries have
been made. The % of claims is
therefore 1%.
Transit time per Actual transit times Time elapsed between LSP specifies a transit time Needs to be per route
route collection and delivery of 36 hours for a shipment to be meaningful
to Italy. KPI reporting shows
that actual transit time for this
route for the reporting period*
is 34.5 hours.
Percentage of late Late deliveries as a % of Number of late LSP makes 16 deliveries for The definition of on-
deliveries total deliveries deliveries/total number an exporter; one of these was time or late must be
of deliveries late. Percentage of late deliver- agreed as part of the
ies for the month is therefore contract. KPI could be
6.25% measured for whole
contract or to specific
critical destinations
Percentage of late Late collections as a % Number of late LSP collects 20 different loads The definition of on
collections of total collections collections/total from an exporter during a time or late must be
number of collections month; on one occasion the agreed as part of the
LSP was late. Percentage of contract, e.g. within an
late collections for the month hour; AM/PM
is therefore 5%.
Correct invoicing Proportion of invoices Number of invoices Over a year a LSP presents May be appropriate if
completed correctly completed correctly/ 50 invoices to a client. Two invoice is complex with
total invoices invoices have errors on them. many lines. Number of
One invoice has several errors. invoice errors could be
Percentage of invoices without an alternative measure
errors is 98% as it is the
number of invoices with errors
that counts in this example.
Correct Proportion of customs Number of customs There are 200 deliveries May be appropriate
paperwork declarations or delivery declarations completed requiring customs declarations post Brexit or on
notes completed correctly/total deliveries in a year and of these 4 had certain routes. Worth
correctly errors with the declarations. monitoring even if own
Proportion of notes completed responsibility not the
correctly is therefore 98%. LSPs
Period could be a month, quarter or other time period
47
APPENDIX 7 GLOSSARY OF TERMS
TERM DEFINITION
Logistics Service Company or entity carrying out a logistics service. Could be a third party, outsourced operation or could
Provider (LSP) be the logistics arm of either the shipping company or receiving company
3rd party logistics Term used to describe the entity that is carrying out a logistics service but is neither the owner of the
(3PL) goods or the receiver of the goods, but is a third party.
Carrier Entity ‘carrying’ the goods (i.e. an LSP). Term used frequently in freight forwarding and international
transport operations
CMR note The CMR consignment note is the standard contract of carriage for goods being transported
internationally by road which replaces individual business’ terms and conditions. CMR stands for
"Convention relative au contrat de transport international de marchandises par route". It applies between
any two countries where one of which is a signatory to the CMR convention. It does not typically apply
between the UK and Ireland.
Bill of Lading A bill of lading is a document of carriage for sea freight, issued by a carrier (or his agent) to acknowledge
(BoL or B/L) receipt of cargo for shipment.
Airway bill An air waybill (AWB) is the document of carriage for air freight (also known as an air consignment note)
(AWB) and is issued by an international airline for goods as evidence of the contract of carriage.
Shipper Entity requiring the shipment and normally the owner of the goods and the company contracting the LSP
or freight forwarder
Cross dock or The process by which goods are moved from one vehicle or container to another via a stockless plat-
Transhipment form. This can be a yard but is more commonly a floor area within a warehouse where goods are briefly
held and marshalled before onward shipment. This supports consolidating different products together on
different legs of a journey, to keep vehicles full and shipment frequencies high. Goods are not held for
more than 24 hours and are not booked into storage.
Logistics hub Used to describe a stockless transhipment or cross dock point. Will often have warehousing or storage
capability on the same site
Pallet network A specific type of groupage operator that specialises in the movement of single or multiple pallets of
goods. Pallet networks work by having strong relationships of regional hauliers to collect and deliver
pallets into one or more central hubs where they are transhipped. Pallet labelling and conformance with a
standard specification are key for the efficient operation of the network. The contract is typically with the
pallet network group rather than with the regional haulier.
Full Truck Load (FTL) A term used in the freight forwarding and international transport markets to designate that a shipment is
equivalent to a full truck load.
Less than Truck Load A term used in the freight forwarding and international transport markets to designate that a shipment
(LTL) is less than a full truck load. An LTL shipment may be transported using a pallet network or a groupage
transport service.
Groupage A service where the LSP groups LTL loads from a number of customers together to create an economic
full load shipment.
Haulier An LSP providing road transport services
Key Performance A KPI is a defined and measurable value that defines how well a supplier is achieving the required service
Indicator (KPI) level
Service Level A specified and measurable level of an aspect of a service that is normally defined within a contract and
Agreement (SLA) agreed between both parties
RoRo Roll On – Roll Off. Used to describe shipping operations where the vehicle drives onto and off the ferry
LoLo Load On – Load Off. Used to describe shipping operations where containers are loaded on and off by
crane
ConRo A vessel allowing the combination of vehicle (RoRo) and container (LoLo) transport on the same ship
48
BREXIT ANALYSIS &

PLANNING DOCUMENT
Please note this document is
part of ongoing Brexit analysis
and scenario planning for
input into larger Government
deliberative processes. Unless
explicitly referenced by
Government decision, any
proposal contained in this
document does not represent
Government policy and
should not be represented as
such.
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Moscow
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London
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BORD BIA FOOD & DRINKS SUPPLY CHAIN LOGISTICS STRATEGIES FOR SUCCESS

Growing the success of Irish food & horticulture

2. ELEMENTS OF BUSINESS AS USUAL STRATEGIES 5

3. OPTIONS FOR SUPPLY CHAIN RE-DESIGN 13

4. COST REDUCTION INITIATIVES 17

5. POSSIBLE BREXIT SCENARIOS 20

6. GUIDE TO LOGISTICS SERVICE PROVIDER SELECTION 24

7. CONCLUSIONS AND RECOMMENDATIONS FOR EXPORTERS 33

1. CURRENT FREIGHT FERRY SCHEDULES 36

2. LOGISTICS SERVICE PROVIDER SELECTION CRITERIA 37

4. REQUEST FOR INFORMATION (RFI) EXAMPLE 40

5. REQUEST FOR PRICING (RFP) EXAMPLE 41

6. KPIS AND MANAGEMENT REPORTING 47

MODEL LOGIC LIMITED

Brexit is the single LEAD TIMES CHALLENGES AHEAD

companies vary in many dimensions,

STAKEHOLDERS ALONG WHOLESALERS INTERMEDIATE WAREHOUSES

USING INTERMEDIATE WAREHOUSE

SUPPLIER INTERMEDIATE RETAILER

TRANSPORT OPTIONS customers in the destination country.

FULL TRUCKLOAD (FTL)

LESS THAN TRUCKLOAD (FTL)

LESS THAN TRUCKLOAD (FTL)

LESS THAN TRUCKLOAD (FTL)

INCREASE STOCK IN THE CHANGE PACKAGING TO LABELLING AND

RESOURCING AND MANAGING SUPPLY CHAIN

COSTS FOR DIRECT TRANSPORT COSTS USING INTERMEDIATE

Storage and handling costs at the

Inventory costs, including any risks of

Transport costs from the intermediate

Exporting to multiple Against this background it is important

• Review the volumetric dimensions of CONTINUOUS IMPROVEMENT (CI) METHODOLOGY

RISK RISK SUSTAINABILITY RISK

The UK acts as a land

As diversification WHY OUTSOURCE

LOGISTICS SERVICE PROVIDERS THE IMPORTANCE OF

SERVICE SPECIFIC DESCRIPTION WHEN TO USE

Risk to business continuity Service complex and cannot be

LOW RELATIVE SPEND OR SAVINGS POTENTIAL HIGH

The strategies and activities that a Bottleneck: specialist services with

All companies outsourcing logistics

IDENTIFY THE STEP 3

GET PRICES AND PROPOSALS

For LSP sourcing decisions it is sensible to go through a two-stage

Having selected the preferred partner, the

The contents of the Although the specific requirements

APPENDIX 1 CURRENT FERRY CROSSINGS

FROM TO TRANSIT OPERATORS FREQUENCY MIX OF COMMENTS

Heysham 8hrs Seatruck 7 per week Freight Unaccompanied

Heysham, 8hrs Stena All year round. Freight No LOLO

WARREN Heysham, 8hrs Seatruck All year round. Freight Unaccompanied

APPENDIX 2 LOGISTICS SERVICE PROVIDER SELECTION CRITERIA

ROUTES Are the routes suitable and fast enough?

ACCREDITATIONS Do they have the right accreditations to meet requirements?

SHIPPER’S COMPANY NAME

MAIN CONTACT - NAME

PRODUCT FORMAT Palletised/ Non-palletised If non-palletised specify

SHIP TO ADDRESS: DESTINATION 1 DESTINATION 2 DESTINATION 3 DESTINATION 4

UNITS FOR e.g. pallets, tonnes, containers

MAIN CONTACT - NAME

TEMPERATURE CAPABILITY Frozen Yes/No Chill Yes/No Ambient Yes/No

ACCREDITATIONS - PLEASE Authorised Economic Operator

ISO 14001 (Environmental Management System)

OHSAS 18001 (Health and Safety Certification)

• Review the volumetric dimensions of CONTINUOUS IMPROVEMENT (CI) METHODOLOGY