By Ronald Hedley

I recently sat down with Jeremiah Pomerleau, who is currently the Head of Logistics & Supply Chain at Puls Technologies, an on-demand uber-like tech and home repair services company based in San Francisco. Previously, he served as the Senior Manager, Transportation & Trade Compliance at GoPro.

His passion for our interview topic was established early on in our conversation as he said, “I have always been fascinated by logistics, transportation in particular. Luckily, I grew up in Pennsylvania, home of Penn State University, the top logistics program in the country. I pursued a degree in logistics without any indecision.” Pomerleau earned his Bachelor of Science degree in Business Logistics.

Even as a young boy, Pomerleau had a fascination with logistics. When he spotted a jet traversing the ubiquitous blue sky, he would wonder, “Where is the pilot going? Where is he or she coming from? What cargo is in the plane’s belly?” Clearly, Pomerleau was no ordinary kid.

He is no ordinary adult either. Pomerleau opined, “Logistics surrounds us: the chair you’re sitting in, the desk you’re using, the pencil in your hand, the lighting overhead. Everything was produced somewhere and had to be sourced, shipped (perhaps exported and imported), customs cleared, and delivered to you.”

Logistics

Pomerleau started working at GoPro in 2012. They hired him to build and manage the transportation and trade compliance functions. “I conducted a comprehensive assessment of their supply chain, which typically includes evaluating their domestic and international supply sources, points of distribution, customer locations, trade lanes, volumes, logistics partners, spend, freight modes and service levels utilized,” he explained.

Pomerleau discovered a tremendous opportunity to reduce spend, especially with transportation across all modes, both domestic and international. “The logistics operations team had selected competent transportation partners and had sound operational procedures in place, but, in terms of what GoPro was paying for those services, it was way above market,” he explained.

After Pomerleau completed his assessment, he formulated a transportation sourcing strategy and began to conduct competitive bids for air, ocean, truck and small package freight services on a global scale.

Upon tendering the business, he assembled a comprehensive bid package that included an overview of the company’s supply chain, logistics objectives, trade lanes, volumes, pricing quotation form, bid timeline and criteria for selection. Specifically, he detailed where the company aspired to be from a logistics and trade compliance perspective.

Pomerleau commented, “My RFP’s for transportation services, especially for international air and ocean freight were, on average, 15 pages long. [The RFP’s] were not all words; [they also had] lots of figures and facts, services requirements, charts and graphs, information that people could easily glean.”

Pomerleau stated that his purpose was, “to ensure the invited service providers understood GoPro’s requirements and were well-positioned to submit a formidable proposal.” He added, “This gave me, my team, and many internal stakeholders increased confidence in the procurement process and provided for a fair and equitable contest.”

Soon after Pomerleau’s contribution, things were quite different at GoPro. The proverbial tail was no longer wagging the dog.

RFP Best Practices

Pomerleau’s led his final freight services bid at GoPro in December of 2017. After completing the vetting process, he invited 20 freight forwarders to compete for the company’s air and ocean business.

In keeping with his structured RFP cadence, he furnished a freight services agreement (FSA) that detailed the company’s terms and conditions pertaining to invoicing, payment and, most importantly, its service level requirements and performance management controls.

Pomerleau stated, “I wanted their acceptance and/or feedback on all terms and conditions at the time of proposal submission.”  He elaborated, “Pricing is only one factor in the decision. A service provider must deliver on their space capacity commitment without compromising service. A freight forwarder’s commitment to space capacity is critical, especially for air freight movements during peak season (late July through December).” Pomerleau knows that in transportation, especially international freight, he must get the forwarder’s acceptance upfront.

He stated, “Forwarders must offer a healthy mix of firm and soft block space allocations (BSA) and commit to handle our volume. “If we are exporting 50 tons of volume from Hong Kong to Los Angeles and Amsterdam in August, I need to verify that the freight forwarder can actually move it. They can give us a wonderful price, but if our space is not confirmed, our product won’t move.”

I need to verify that the freight forwarder can actually move it. They can give us a wonderful price, but if our space is not confirmed, our product won’t move.

Since there are hundreds of freight forwarders in the business, a company needs to vet them carefully. Pomerleau said, “Forwarders are middlemen between you and the carrier. You need to make sure that the forwarders possess strategic relationships with the carrier community (Air – Cathay Pacific, Singapore Airlines, Lufthansa, etc.) with dedicated BSA’s throughout both cargo and passenger segments.”

Naturally, I had to ask, “How do you do that?”

Pomerleau explained, “We ask them to show us their space allocations. If they say they possess 200 tons available ex-Shanghai to Frankfurt, we want to see their allocations per month, per week and per day. We also want to know what percentage they can guarantee.”

Pomerleau then explained how transparency is vital, “They can show you their total allocation, but we want to see our slice of the pie. They may support 20 other shippers on a particular trade lane, where they have a daily allocation of 10,000 kilograms. Can they lock 30% for our cargo? I often find that shippers partner with a forwarder for a great price only to encounter delays to move their cargo, and they will wonder why [the delays].”

Fixed Pricing Model

Pomerleau knows that a fixed or flat pricing model is essential. He explained that transportation services have many components that are comprised of freight and associated accessorial costs, such as fuel, security surcharges, and terminal handling fees.

Pomerleau explained that there are a host of fees that may apply that can generate an invoice with 15-16 charge lines, “These invoices can be quite complicated to comprehend, especially when the costs are variable.”

Because fuel costs are constantly floating, as are fees that are charged by third party intermediaries, Pomerleau seeks cost stability. He stated, “I negotiate fixed pricing for a year. That means that all the fees, including fuel, security, and others get rolled up into one. When they propose a rate, they complete a quotation grid that I furnish during an RFP, which lists our trade-lanes line by line.”

Pomerleau believes that it is essential to shift the responsibility of managing cost back to the transportation service providers. “Fixed pricing models remove the unnecessary complexity of variable rates, thereby empowering shippers to regain control of their freight spend,” he explained.

With flat rates, shippers can easily project spend for budgeting, forecasting, and total landed cost modeling, not to mention simplifying the invoice audit process. Pomerleau then asked, “How would you react if an Apple store associate requested that you pay a 7% fuel surcharge on your new iPhone X due to increased jet fuels prices from ex-Asia? I want Apple to manage their costs, just like I want freight forwarders to manage their costs. I’m not buying fuel, I’m buying space.”

With flat rates, shippers can easily project spend for budgeting, forecasting, and total landed cost modeling, not to mention simplifying the invoice audit process.

Fixed Pricing Model

Pomerleau believes that logistic and supply chain professionals should immerse themselves in international trade. By understanding the fundamental regulations and trade programs available, shippers can take advantage of tremendous cost savings and better vet the companies who might manage their freight.

“Limited knowledge produces bad results.”

Jeremiah Pomerleau

Pomerleau believes that logistic and supply chain professionals should immerse themselves in international trade. By understanding the fundamental regulations and trade programs available, shippers can take advantage of tremendous cost savings and better vet the companies who might manage their freight.

Pomerleau explained, “Whoever is responsible for logistics as a function in a company needs to either work very closely with their legal or trade compliance teams, or partner with customs brokers, attorneys or consultants to help them navigate the complex world of logistics and trade.”

 

Final Thoughts

“Patience and diligence, like faith, remove mountains.”

William Penn

Pomerleau grew up in the Quaker State, loving airplanes and planning his future in logistics. While attending Penn State University, he worked 30-40 hours per week as a busboy, a bartender, and a valet attendant. He was also the official campus AV guy. “I worked and studied hard,” he recalled.

Today, Pomerleau continues to work long hours. At present, he spends 50, 60, or 70 hours per week at Puls and supporting clients as an independent consultant, working to improve, well, everything. After all, logistics and trade are in his blood.