Rolling! Getting the Most from your Ground Transportation Program

BCD Travel In Motion, January 2009 (excerpted)

Ground transportation can account for as much as 10 percent of an organization's travel program costs in the U.S. – and even more in parts of Europe and Asia. Advito was recently asked by an application software and services provider to analyze the true cost of submitted proposals for their global ground transportation bid project and to manage all contract negotiations with the goal of obtaining maximum value and the lowest possible cost. 

Case study: Results on the ground

Industry
Application software and services provider

Annual ground transportation spend
 US$800,000

Results in brief

  • Year-over-year savings of 8 percent of time & mileage spend
  • Guaranteed vehicles at agreed corporate rate
  • Three-year agreement with fixed rates
  • Additional executive memberships

A preliminary analysis had already been conducted internally by the company's travel manager prior to contracting with Advito.

However, to achieve absolute effectiveness, Advito recommended a secondary analysis to create a full picture of the current provider contract situation. This expedited, in-depth analysis factored in fuel, taxes, surcharges, weekly rate charges, annual rebate effects and benchmark data.

The analysis revealed that the competition's proposals were much more aggressive than that of the incumbent supplier, indicating that there were additional savings to be realized for the client. And by incorporating additional analytical components, Advito gave the client a clear picture of year-over-year expenses and savings potential in the areas of time/mileage, rebate, fuel and non-monetary benefits such as executive memberships.

Results
Armed with the information and facts it needed, the company was able to better understand the status of its rental car discounts through peer-to-peer benchmarking.

Advito helped assess new opportunities for savings potential without changing vendors – a priority for the company. Some of the negotiated benefits included additional executive memberships, a three-year agreement with no increases in pricing and guaranteed vehicles during the largest bi-annual furnishings industry trade show in the world, which attracts more than 85,000 people.

Advito's strong supplier relationships, deep understanding of the vehicle rental industry, and proficiency in direct negotiations resulted in the identification of $236,750 in incremental savings over three consecutive years. This year-over-year savings of 8 percent is all the more striking during a period when rates have been estimated to increase overall.