Cargill Takes on Transportation Sourcing

Agribusiness giant using Verticalnet to drive initiatives in North America and Europe

Agribusiness giant using Verticalnet to drive initiatives in North America and Europe

Malvern, PA — May 3, 2005 — Agribusiness giant Cargill is using a sourcing solution from Verticalnet to drive transportation sourcing initiatives across the United States and Europe, the solution provider reported this week.

Headquartered in Wayzata, Minn., Cargill, the $63 billion provider of food, agriculture and risk management products and services, is the largest privately held company in the United States.

The company has used Verticalnet's Advanced Sourcing solution, including "on-demand" software and consulting services, to complete a sourcing project for bulk liquid transportation in Europe and is in the process of sourcing dry van shipments in the United States.

Cargill selected Verticalnet over other software providers because of the deep transportation expertise built into the Verticalnet Advanced Sourcing Solution and the expertise of Verticalnet in supporting sourcing initiatives across both North America and Europe, according to the solution provider.

The market for transportation is characterized by rising costs due to fuel price increases and constrained capacity across all modes, necessitating that companies look beyond traditional, price-focused reverse auctions for transportation.

Verticalnet said its solution has already proven itself in Europe, where a recent sourcing event across six countries and 75 suppliers yielded a transportation network with a best-fit match between supplier capabilities and Cargill's pan-European requirements, while delivering 6 percent annualized savings in a market where most shippers are facing price increases.

"For the first time, Cargill was able to provide a single face to carriers across divisions, providing qualified carriers with the chance to increase their volume of business with Cargill in a way that yields benefits for both parties," Verticalnet said in a statement announcing the customer win.

Verticalnet also said that Cargill chose the provider for its solution's ability to elevate the focus beyond supplier consolidation and price-only leverage, helping Cargill create a transportation network with the best fit between Cargill's needs and supplier capabilities.

Cargill is looking to the solution to help improve carrier performance while controlling costs as the company uncovers previously untapped economies that will both save Cargill money and provide a more attractive award package for carriers. "The new transport management model will create a higher distinctive value for Cargill's internal and external stakeholders while harmonizing quality standards and leveraging best practices across the chain," Verticalnet said in its statement.

"With rising fuel prices, capacity constraints and varying capabilities across the supply base, transportation is an incredibly difficult category to source," said Jeffrey P. Ryan, Verticalnet's senior vice president of advanced sourcing. "Industry leaders like Cargill are turning to more advanced solutions, like Verticalnet, to control costs while building strong and reliable carrier relationships."

For more information on the current state of the sourcing and procurement markets, see the articles "The Analyst Corner: Sourcing" in the June/July 2004 issue of Supply & Demand Chain Executive, and "The Analyst Corner: Procurement" in the August/September 2004 issue of the magazine.