Are you going out to the market for new pricing and new partnerships? Here are 9 important suggestions for your freight RFQ based on our experience of working with hundreds of companies on their freight tenders.
1. Set a strategy and clear goals
First and foremost it is important to know why you tender and what you would like to achieve and how. This is crucial in order to create a good tender structure, the right rate card and partner selection. Secondly communication around these goals is important to internal stakeholders as well as to carriers. The better the picture of what you are trying to achieve the better they can quote and respond to your tender.
2. Imagine how your freight flows fit in the larger transport flow of your carriers
This sounds a bit philosophical but it is an interesting mind exercise well worth your time to understand how compatible your freight is with what type of carriers, what kind of other customers. Logistics providers are also looking for an optimal mix of goods to transport to and from a destination. If you develop a clear view on this it will not only benefit your own organization but also the carrier.
3. Tips for your freight RFQ – Use clear data
This is an obvious point but often tenders lack data, contain wrong data, or have unclear data. It is important to have good data sources for your tender events but verifying data and ensuring it is correct and complete is as important. Carriers handle many tenders and it is quite frustrating when they have to spend a lot of time on data clarifications.
4. Be conscious of your carrier’s time and effort to respond
This ties in with the previous point about clear data but what needs to be added is the complexity of a tender. Many tenders are overly complex with many exceptions, many additional cost items, and many lanes that are barely used. Logistics service providers do see right away when the customer is over asking or when the shipper is not being considerate with their time. It is important to realize that carriers also have limited resources and putting together pricing is often work for a group of people who will all together spend many hours responding to a tender. Carriers need to decide if your tender is worth their time and the more complexity you add the more time they will need to spend on your tender. Keep it as simple as possible.
5. Tips for your freight RFQ – Engage with the carrier community
Everybody likes personal contact and likes to be valued. Don’t underestimate the value of direct contact in a B2B environment before, during and after a tender. People move around and will create an opinion about your company that can influence later business. Carriers want to know on who they will spend their time on, what you can potentially offer them and how eager they should be to want your business. Setting up clear communication is a vital part of a successful tender.
6. Don’t invite too many carriers
It is easy to be tempted to invite as many carriers as possible as there may be hidden gems out there or carriers that offer way lower pricing than others. This may be deceptive as carriers are aware their chances to win new business from unknown shippers are low.You may be better off to well study the carriers you are going to invite so you ensure inviting the right ones. Another suggestion would be to align the carrier pool with your goals. When you would you like to end up with only 10 carriers, then it does not make sense to invite 300 of them.
7. Always give carriers feedback
Carriers need to understand how they are quoting during the different rounds. Giving them a target range and a ranking is key to moving to your desired pricing. Next to that, it is important for carriers to understand why they did not win business so they can improve for a next tender with you or others. It also builds a relationship with carriers as they feel not commoditized and anonymous when you take the time to give them a proper response.
8. Tips for your freight RFQ – Be a shipper of choice
How can you make yourself an attractive shipper and customer? How do you attract interesting carriers? Do you have a good carrier management approach? Are you focused at developing partnerships with your carriers? Do you have normal payment terms? A lot of things go into being a “shipper of choice” and it is good to ask yourself these questions. In a tight logistics market, you basically compete for capacity with other shippers.
9. Use a platform
Last but not least: running tenders are complex and often a lot of money is involved and it all comes down to the right decisions, the right analysis and flawless calculations. No matter how much care and time you spend without a tool and just in excel, the human factor will be decisive. Either mistake are made in the analysis, tender managers are absent and the tender process stops, people with excel knowledge or the ones who made the complex tender template leave and knowledge will leave the company and so will the ability to run sourcing events. Next to that by automating the tender process we save people about 50% of their time and our customers report to about 10% more savings. Finally; your carriers will like an online and cloud-based approach to procurement also a whole lot better!
Good luck with your upcoming sourcing events!
Thank you for reading: 9 crucial tips for your freight RFQ.
If you need any support contact us at info@freightender.com
