Memo

To: From: Date: RE:

Aung Kyaw Moe Francois Damba 29 May 2013

TASK 9 TRANSPORT

When the new warehouse at Jumna become active, it is sure that we need to get a new transport provider since the current one (Mugla Distribution) is not able to operate in the eastern part of Betaland. The new compant we are about to hire must move goods from Jumna port to our new warehouse at first. Moreover, this company has to assist in the movement of aid from the new warehouse down to Chagong for further distribution. Therefore I have been asked to provide from logistical point of view how to select and evaluate potential transport service providers and what are the areas that will need to be discussed in meeting with them. Selecting and Evaluation of Transport Service Providers According to our learning material, there are a number of steps involved in selecting and evaluating service providers. The first thing is the Evaluation of our Transport Needs: in terms of how much tonnage we need to move, what are the type and nature of our supplies, what are the transits and destinations and time frames allowed, possible movement of the beneficiaries. The next step is to investigate and evaluate the type and availability of transport services in the prevailing Transport Market. In this case we can collect data from trade directories, advertisements in papers and journals, and feedback information from other UN agencies and INGOs about the service providers they are in use. Then we have to get to Transport Network Design different services to be contracted, corridors and routes to be used. In our case, we are going to use the transport services for movement of supplies from Jumna port to our warehouse and then to the Chagong warehouse. We have to consider whether we are going to use their services beyond Chagong to the distribution points at pour camps and we need to have decision on services to be contracted with the providers. After that, before starting our bidding process, we have to short list and identify the name of transport service providers who are reliable and qualified to do the work we have. We need to prepare a bid document or Request for Quotation (RFQ) preparation setting out the conditions, terms and rates for the requested service. On this document, we have to make sure that the following points are clearly mentioned: -Closing Date and Time of Bid -Type of Cargo to move
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-Destinations and other sub-routes we are going to use them -Rate of transport per trip or per weight/volume basis -Time frame for movements offered -terms and conditions for loss and damage of cargo Then we have to proceed the standard procedures of bid opening, making comparison table for the rates and services per company, and get to a recommendation of the appropriate transport service provider. In this regard, there are five selection criteria suggested by our learning material as the table below:
1 2 Selection criteria Reputation Reliability Defining Criteria Good name in the market Ability to demonstrate reliable and consistent service delivery over a period of time the available capacity of the provider and its relationship to the forecast demand Means of Verification Feedback information and general opinion got from other customers as UN and INGO organizations Having timetables and schedules for rail/air/sea freight. Having time-bound reliability in load/unload and transportation by road Number of Truck available and loading capacity of Trucks Arrangements for replacement vehicles Ability to flex the capacity to meet customer requirements Having able human resources to manage transport Ability to manage vehicle fleets get ready on time by timely repair and maintenance Ability to outsource in the network if necessary Lowest but Reasonably balanced with the services provided Check extra cost or hidden cost apart from the visible normal cost offered

Capacity

4 5

Availability Cost

the providers ability to manage the demand placed on the equipment by its customers the price that the provider will charge for the service being provided

Necessary Areas to be discussed with the Potential Transport Providers According to our learning material, we have to discuss with the potential service providers for the following areas before inviting them for bidding. Purchasing Rules Since we have our own purchasing rule that will lay down the major guidelines for our selection process and issuing service contracts with the service providers, we have to discuss with our providers to be complied with our purchasing rules. It is better to explain our purchasing rules to the suitable transport providers before we float the bid. These purchasing rules will be reflecting the evaluation process for the performances of providers. Risk and Insurance Since transporting goods and supplies from one place to another place, there are certain kinds of risks involved in the process. Risks can be coming from different ways: bad weather and natural disasters, vehicle accidents, and human theft and looting. In that case, in order to protect our supplies transported, we have to get our providers to arrange for the insurance of our cargo. We have to discuss with our providers about how to manage to protect our cargo by properly taking insurance coverage from a third party insurance company. We have to consider the cost of insurance to be included in the overall cost of transportation.

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Recognized Industry Bodies In order to get information about the potential service providers and their degree of performance, we need to contact with the recognized transport trade organizations or some representative bodies of national haulage industry in Betaland. We have to take care of any provider who is working outside of this official network of the industry. But we can get only some general information about the potential service providers and can never get a strong and committed recommendation. But we can explore the nature and track records of a particular service provider we are interested in at these recognized bodies which can provide some valuable outlooks and estimations of the professionalism and performance of the service providers. Managing Providers in Emergency Situation When an emergency break out, what is happening is the most of the humanitarian organizations inclined to use Push Method at first and attempt to transport the supplies to the area as soon as possible. At that time, the demand for transport providers rise up suddenly and there can be some kind of unscrupulous exploitation of the emergency situation and lack of any extra means of transportation in the area. The transport prices will be highly inflated due to the crisis condition and even sometimes it is difficult to find enough vehicles to make transportation. In that case, the better way to manage that sort of situation is to make some group transportation shared with other humanitarian agencies in the area by sharing usage of transportation resources and that can secure the providers to feel that there will be too many potential customers in the transport market at the time of emergency. We have to think ahead of any emergency situation and draw emergency responses and preparedness plan jointly with the other UN bodies and INGOs in the country. Even some local NGO can be put into the coordination group if these NGOs have significant access to the population affected in the area. UNJLC and other inter-agency platforms can help to deal with the situation in the concerted efforts of all participating organizations.
Aung Kyaw Moe Logistics Officer SCILaid Betaland

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