Yesterday was a nightmarish day because the negotiated transport rates that had been agreed with this logistics company just a few days ago turned out to be not true. The standard set rate we had agreed upon turned out was missing a back of stores surcharge of R550 ($27.50) per pallet load. This is a significant difference and makes their price non competitive and just another transport company.95% of the long haul transporting companies are all in the same type of price range because they outsource their transport and are middlemen taking a cut.
My friend who advised me initially on the target price has admitted he must have been sleeping when the prices sky rocketed and on Monday we have 3 more chances of reducing the prices, but to be honest I think we are already at the new target price.
How it works is they all have a fleet of trucks for local deliveries, but have contracts with intercity operators who then deliver to their warehouses. The local fleet then completes the delivery leaving you with the impression hay handled your goods for the entire process and this is not true.
I think we were all feeling a little sick after this due to how much effort had gone into securing the Johannesburg to Cape Town route. Everything is trucked in this country due to the failure of the railways which would make things far easier and cheaper. I am sure he government is reluctant to fix this lack of infrastructure because if every container delivered to the ports requires a driver to deliver it this creates employment. Madness and backward thinking I know, but this is Africa.
The day after getting the bad news was spent on the phone hunting for one company that we could agree on price with. What I find so frustrating is I know they are out there because all these companies are the third party and using other transport companies to do the work. I have been tempted to follow his last companies trucks to find out who that third party is, but I am not quite at that stage yet.
The good news I suppose is through dogged determination I have found what looks like the perfect match. The owner of the company answered the phone and we chatted for a good 20 minutes before he handed me over to a sales representative. This person was clued up and sent me through a price after chatting for a good hour on what our companies needs were.
The price they quoted was good, but not my target price and told her to chat with the owner to come down some more if they want the business. Within a few minutes the price dropped mid way between my target price and their initial quote which I accepted as fair. The good news is the facilities are available for use already and they have already collected the first orders. Normally you have to wait for an account to be opened and all the other admin that goes with it.
I did thank the owner because this type of service you may have expected 20 years ago but there is none of this being offered today. Deep down I know I will get my target price because I can use the bait of local deliveries as leverage when I have a meeting with them on Tuesday. The company has the word innovations in it's name and they have certainly surprised me with what they are prepared to do to land a new client.
When you look back at things it is funny how things work out because we would never have known about this company if we just gave up. I have always said profits are found in the negotiations and not the selling of the product and this is very true. I am sure he other company will come back with a revised offer next week, but they have blown their chances already. In business you need a yes or no answer quickly and those that can provide that tend to know what they are doing because they know their business.