Ocean Freight Tendering: 10 tips for shippers

Freightender – 10 Ocean Freight Tendering tips

 

Sea or Ocean carrier contracts are very complex. And getting the best results for your ocean freight tender is not self-evident. Therefore, we have gathered the 10 best tips to improve your ocean freight procurement.

It goes without saying that shippers, first and formally, must do their homework very well in order to negotiate successful ocean freight rates. The usual RFP Tender planning and preparation cycle is between eight and ten weeks. During this period it is vital to scout the ocean freight market for trends. Not just trends in rates, but also focus on volumes, capacity, mergers and any useful information you come across. Why? This might have an effect on your lanes!

Long story short, ask yourself and your organization the following questions:

– Am I aware of the latest industry developments? What is the market saying?
– What is the internal status of our ocean freight volumes and lanes?
– Are we likely to get better rates due to increased volumes, market shifts?
– Do we make a strategic shift in preferred carriers?

Ocean Freight market trends

 

Whereas in the past shippers were looking for long-term deals, nowadays it is very much the trend to tender short term ocean contracts (3-6 months). Ocean freight tendering is complex, and mostly, shippers are looking from origin port to destination port. Because of this nature, ocean freight tenders often contain many cost elements.

Besides, the changing in carrier alliances, consolidation, and the opening of the wider Panama Canal influences how shippers and 3PL’s are handling ocean freight procurement.

For shippers, it is very important to structurize their ocean freight tender process. One of the ways to do this is, is looking for the right freight tender solution. If you are looking for such solutions, focus on specific (end-to-end) transportation procurement software with powerful analysis and scenario capabilities. Freightender tip: Look for providers using the latest software. The easier and intuitive the software, the quicker you get good results. This goes for your suppliers as well!

Ocean Freight Tendering: 10 ocean freight RFQ tips

 

1. Know what you need exactly for the lanes. Shippers must be able to understand how the cargo fits into a carriers service portfolio.

2. Know your suppliers. Make sure you have a full picture of the strengths and weaknesses of the suppliers you invite to the ocean tender

3. Kick-off with a meeting or webinar. Invite the most important suppliers, provide useful feedback to the carriers.  You might be very familiar with your tender platform, but your suppliers might not be (yet).

4. Ensure, if anyone is quoting alternative rate structures, to make it crystal clear in their response. Freightender Tip: By default, carriers and forwards are not allowed to change the rate structure. However, we have built a flexible menu where shippers can pre-define how suppliers quote. By working this way, shippers give their suppliers more flexibility but stay in full control at all times.

5. If you request a lump sum grouped charges by ‘Origin local charges’ for example. Ask your bidder to breakdown what is included in their offer.

6. Think about additional shipment information. You might not have done this in previous tender, but reconsider. Evaluate your bids for lead times, cut off times, transit times, demurrage and detention free-times and such.

7. Ocean freight tenders are not just about the pricing. When you benchmark your carriers, whether it is round one or two or further in the process, keep in mind the capacity factor. Mainly in peak season when shipping companies move significantly more cargo.

8. Get some help. Seriously. Ocean freight tenders are tough, time absorbing and moreover, a high detail game at high pressure. Get the right software in order to take away the high workload of the back of your team. You want people to focus on the important, not spending time on tender exercises that can be automated. Freightender Tip: Look for a dedicated freight procurement software platform familiar to your supplier and moreover, easy to use! This will enhance timeliness, and the quality of the bids you receive. After all, it is all about collaboration nowadays!

9. Get the full impact overview. Especially large ocean tenders tend to have a large impact on organizations. Keep in mind to share the nominated ocean rates with the stakeholders in your organization. Freightender tip: Look for freight procurement software with built-in impact scenario builders. This will give a full organizational overview and can you can break down the impact of the tender to the highest detail!

10. Benchmark your sea freight rates. This last detail might not have anything to do with the initial tender. But it can’t be stressed enough. First, decide a clear project timetable (3-6 months for example). Secondly, evaluate your rates to get better conditions, reduce the number of sea freight forwarders. Benchmarking allows you to gain insight and helps to decide the timing for a new RFQ process.

About Freightender E-sourcing for Logistics

 

Freightender is an easy to use freight tender platform. It incorporates deep logistics knowledge and the latest technologies. We deliver a smooth and efficient tender management experience to both shippers and carriers. Freightender is suitable for large network tender small size tenders and simple freight rate benchmarks. Freightender is used by many large multinationals, forwarders and consultancy organizations.

Request a free live Freightender demo

 

More Freightender content you might find helpful

 

Road Freight: How to improve your FTL tenders

5 proven tactics to receive the best Freight RFQ results

Transportation Tendering: How you reach 90% time savings

Pieter Kinds

Pieter Kinds

CEO Freightender.com

Freightender is the standard in freight tendering. It makes the tender process lean, smarter and much faster. 
Fully cloud-based. Curious? Request a free live demo and join the Freight Tender Revolution!

Schedule Demo Freight Sourcing

Schedule Demo RFQ Management

How shippers and forwarders can streamline the freight tender process

In the forwarder world, there are a lot of people you typically don’t deal with as a shipper yet they are handling and responding to your tender: tender managers, pricing managers and pricing analysts. Their job is often performed under high pressure from the outside...

Freightender and Portrix Logistic Software partner to empower freight forwarder tender teams

Sep 28 2020 at 09:23 AM In 2020, the need for digitization in logistics has really accelerated and this is especially true for the freight forwarding community. One of the main areas of focus for forwarders is how freight tenders are being managed today– often a...

Freight Tenders: 5 crucial tips to ensure carrier engagement

Freight tenders are not only dependent on solid freight data (historical data). The willingness of carriers to participate in freight RFQ's is a big factor as well. In this article, we share 5 vital tips to increase carrier participation in your freight tenders. The...

Digitize logistics procurement: 5 Reasons to act NOW!

Many companies are now developing strategies to buy freight in a more digital and efficient way, creating a new structure for a lean and innovative way to logistics procurement. What are you doing? More and more forwarders discover areas for optimization and...

E-Sourcing freight checklist: What is logistics looking for?

Despite the fact that the procurement and transportation sectors are slow adopters of technology, the rat race has already begun. Many companies are inquiring the platform provides full visibility all the different steps in the project and the timing associated....

Spot bidding: what to expect in Q3-Q4 2020?

Decisions made in logistics and supply chain always have had a strong impact on a company's bottom line. It was, is and always will be a major factor to accomplish competitive advantage in any industry. One of the decisions enterprises confront is the question of...

State of logistics procurement in EMEA
(and where the market is headed)

We want to give you a short overview of what is happening in the world of logistics procurement from our perspective. LTL/FTL Freight The market has dropped enormously for most carriers. Estimates go from 50 to 80% of the business. Most shippers are holding off on new...

Why forwarders and carriers are pricing transportation into oblivion

Carriers are pricing transportation into oblivion Pricing, quoting, answering to transport tenders, whatever you call the process, is a highly underrated process within many forwarder and carrier organizations. It is a process that is subject to shared...

5 simple freight tender tips for 2020

5 simple freight tender tips for 2020 The logistics market is ever evolving and has never been more dynamic than in 2020. Globalization, digitization and political events such as Brexit make that logistics professionals need to be on their toes to ensure ongoing...

How do you rally your carriers around your freight tender?

How do you rally your carriers around your freight tender? For many, shippers and carriers alike, freight tenders are a necessary evil, yet one has to put in full effort to get satisfying results. Often this does not happen and tenders are not complete, are stretched...