A leader in paper, liner board, and paperboard recycling, with four rail-served production plants in Canada and 80+ destinations throughout North America, was seeking experienced rail commercial market expertise to help them maximize the outcome of their master rail contract renewals. With a tumultuous transportation market and railroads signaling significant price increases, this market leader wanted to optimize its rail logistics strategy, maintain its market position, minimize freight spend, secure price stability, and support future growth plans.
The Client was renewing all of their rail contracts, covering an $80M (CAD) freight spend encompassing several plants, each with its own logistics needs and challenges. PLG Consulting’s team of subject matter experts worked with the Client on past renewals and was brought in again to assist in the overall renewal strategy planning, preparation, and negotiations.
Working collaboratively with the Client, PLG provided the outlined deliverables:
- Overview of the current and respective carrier rail market conditions to help prepare for negotiations.
- Industry-specific rail market conditions to maximize positioning for rail negotiations.
- Internal expectations to leadership
- Collaborative review of the Client’s portfolio of business, including:
- Total freight spend ($) and volume by service provider
- Mapping of both historical and forecasted inbound and outbound flows
- Identification of pros/cons of competitiveness for each book of business
- Development of strategy scenarios for negotiations
- Review of rail contracts
- Operational cost analysis of internal plant switching
- Consulted in developing an approach based on each railroad’s desire for retaining/gaining volumes, the Client’s competitive position on each book of business, as well as the whole offering in the renewal RFP
- Developed a renewal strategy to maximize results and minimize price increases
- Assisted in an in-depth review of each of the Client’s book of business, with its unique drivers and competitiveness
- Reviewed areas lacking competitiveness to create alternatives where possible, thereby increasing the Client’s negotiating leverage
- Provided specific contractual language and terms guidance