Procurement of logistics services: objectives, methods and 10 levers
Logistics services are among the largest external cost drivers for many companies. In 2024, the logistics sector in Germany generated a turnover of 331 billion euros. A significant proportion of this is accounted for by external services, representing a substantial procurement volume for clients. Nevertheless, transport, warehousing, fulfilment and CEP services are often not procured with the same strategic rigour as traditional product groups.
Yet the potential for savings lies not only in price. Processes, contractual terms, capacity utilisation and the management of service providers also have a direct impact on overall costs.
What does the procurement of logistics services involve?
The procurement of logistics services involves sourcing external transport, warehousing and logistics services. These include, amongst others, road, rail, sea and air transport, CEP, fulfilment, warehousing services and 4PL models.
The challenge: each of these services is governed by its own cost structures, market dynamics and requirements. Market knowledge, a robust data foundation and clear accountability within strategic procurement are therefore essential.
Professional logistics procurement does not begin with the tender process. The analysis of an organisation’s own needs and the definition of requirements are what determine which services can actually be compared and negotiated at a later stage.
![[Translate to English:] Logistikzentrum mit mehreren Lkw an den Laderampen als Symbol für Transport-, Lager- und Logistikdienstleistungen im strategischen Einkauf.](/fileadmin/_processed_/4/e/csm_LKWs_af47575f41.jpg "[Translate to English:] Lkw an Laderampen eines Logistikzentrums für den Einkauf von Logistikdienstleistungen")
What are the objectives of the procurement department?
The focus is on three objectives: reducing costs, ensuring service quality and creating transparency.
A service provider’s price is only one aspect to consider. Surcharges, miscalculations, unclear scopes of work or ambiguities regarding cost responsibilities can significantly increase the actual costs over the course of the contract.
Particularly in the case of warehousing and logistics services, responsibilities should therefore be clearly defined in the tender and the contract – for example, regarding maintenance and repairs, especially for technical equipment. A clear distinction between maintenance and repairs, as well as clearly defined cost responsibilities, helps to avoid subsequent disputes and unplanned costs.
Which methods have proved effective?
Professional procurement begins with an analysis of the current situation: volumes, proportions, consignment sizes, dispatch frequencies, costs and service requirements must be transparent. The scope of services and requirements are then defined. Everyone has surely experienced just how difficult it is to compile 100 per cent of all shipments from the previous year into a single file, complete with details of order number, consignor, consignee, carrier, distance, costs, diesel surcharge and other surcharges. However, no tender process should be initiated without this database.
A two-stage approach has proven effective when selecting service providers: an RFI (Request for Information) is first used to assess the expertise, references and capabilities of potential providers. Subsequently, the six to a maximum of eight most suitable service providers are invited to submit a RFQ (Request for Quotation).
The RFQ should be clearly structured and allow suppliers sufficient time to prepare their tenders. In practice, a period of at least four to five weeks has proved effective. Furthermore, a call for tenders should only be issued if there is a genuine willingness to change service providers.
The tenders are then evaluated against standardised criteria, negotiated and formalised in a contract. The decisive factors here are not only prices, but also service levels, performance, transparency, manageability and potential for continuous improvement. These criteria are particularly relevant when evaluating an existing 4PL service provider.
Where are the key areas for cost savings?
Transport costs can often be reduced without initially changing the rates. Ten strategies have proved particularly effective in practice:
- Consolidate consignments
- Define consignment sizes
- Reduce dispatch frequencies
- Make use of combined transport
- Use parcel services selectively
- Increase load volume
- Optimise dispatch planning and routes
- Avoid surcharges
- Optimise returns and back-haul
- Systematically check invoices
The basic principle is this: optimise processes first, then negotiate prices. By consolidating consignments, improving capacity utilisation, reducing dispatch frequencies or better organising returns and back-to-warehouse shipments, you can influence costs even before the actual price negotiations take place.
Logistics Procurement Checklist
Procurement does not end with the award of the contract
Procuring logistics services is not a one-off tendering project. What matters is whether the agreed terms and services are upheld and further developed in the long term.
Even with a 4PL provider, it is therefore important to regularly review whether service, costs, transparency and continuous improvement still meet expectations. If these services consistently fall short of expectations, a structured review of the market is necessary, even for 4PL services.
Those who procure logistics services strategically do not merely secure better terms; they lay the foundations for a more efficient, transparent and sustainably manageable logistics operation.
