Anonymized comparisons of freight costs for improved procurement
Transportation accounts for almost half of the logistics costs borne by manufacturers and suppliers in the chemical industry. So it pays not only to negotiate effectively with hauliers, but also to observe closely what competitors are doing. After all, businesses cannot know whether the terms they have negotiated are truly in line with market prices. Their rivals may be paying significantly less for similar distances and services. As a result, Fraunhofer SCS has established a working group on freight benchmarking for the European chemical industry. The group provides chemicals manufacturers and feedstock suppliers with anonymized comparisons, helping to strengthen their negotiating position and improve their procurement strategies.
Comparing road-freight costs across Europe
The freight-cost comparison is based on rates paid by chemicals manufacturers for road transportation across various distances in Germany and Europe. It includes prices on the general cargo market for full- (FTL) and less-than-truck loads (LTL) of between 0.5 and 7.5 metric tons, and for dry and liquid bulk (tank and silo) shipments. All relevant cost drivers are considered, such as additional services for hazardous materials, the proportion of hazardous materials shipment volumes, and the type and weight of goods. Diesel prices and distances have been adjusted to clearly identify the components responsible for high freight costs.
Country- and market-specific reports
Participating companies receive benchmark findings twice a year in the form of detailed (country-specific) reports plus summary reports on general market conditions. The data is made available online via a web portal. The entire group convenes once a year to evaluate selected findings. At these meetings, invited experts and Fraunhofer researchers give presentations on current market trends.
Comparisons with relevant members of the industry
The Freight Benchmarking Group of the European chemical industry was established in 2005 and currently comprises over 10 leading chemicals manufacturers. These include BASF, Covestro, Oxea, ALTANA and LANXESS Deutschland. Ten years’ experience, aided by the group’s very stable membership, has shown that freight benchmarking offers an attractive cost/benefit ratio and is useful to enterprises of all sizes.
Are you interested in taking part? Contact us for membership details.