Customers want to acquire freight or negotiate freight rates, so they send out a tender or RFQ to a group of forwarders or carriers who wish to participate in the process. This is straightforward and transparent. The process behind it is less visible and can be found deep within enterprises, where many stakeholders are involved. Nevertheless, just a few are responsible for actual price and tender response work; they are usually referred to as tender managers, bid managers, or pricing analysts.
Many businesses get hundreds, if not thousands, of tenders each year, all of which must be analyzed, explained, priced, validated, and returned to the (possible) customer under tight deadlines.
Big push for digital tender tools
As part of the digitization drive, we are seeing a strong push for new tools and software in forwarder companies, and it is no secret that forwarders have been behind in upgrading systems and processes. In most cases, work in logistics has been and continues to be solved by adding labour.
It’s no wonder, however, that those responsible for responding to RFQs must do it without the use of sophisticated software, which normally consists of e-mail and Excel, occasionally Sharepoint, and occasionally even an in-house developed system.
Why should there be a system for tender management?
To begin with, shippers use their own methods and standards, thus there is no universal standard. This means that each tender document requires a unique methodology and analysis. This is inefficient and wastes a significant amount of time. Second, not all rates are stored or available centrally, therefore rates must be acquired from partners or local colleagues. This means that the RFQ bid sheet must be torn up and distributed to the appropriate persons; in forwarder organizations, this could involve sending it to more than 50 people all over the world. Obviously, these quotes will be resurrected and will need to be validated and verified. They don’t always return on time, which necessitates chasing down folks.
All of the quotes must eventually be combined back into the shipper’s original file and returned on time. When you include in internal calls, explanations, and talks with internal stakeholders like management, sales, and account management, you can see how time-consuming this process is. Especially when you’re running 20 or more freight tenders at the same time, as is common.
The benefits of automated tender management
You get visibility into the process, have a better understanding of how to quote, and can turn tenders around faster if you can highly automate the tender management and response process. Last but not least, you improve the working environment for tender management workers, as this work surely causes stress and dissatisfaction, and few pricing analysts last more than three years as a result.
To summarize, many firms’ tender management processes can greatly benefit from digitization in terms of efficiency and cost reduction. Although these expenses are difficult to track since they can be dispersed across the business and across different P&L structures, some forwarders estimate that the cost of responding to an Air or Ocean bid is between € 10,000 and € 15,000.
Our mission at Freightender
At Freightender we started addressing this fascinating area of logistics in 2017 and we built a comprehensive platform to help forwarders manage this process faster and smarter. We are pleased to be a leader in this niche and are excited about how we can help tender managers on their digitization journey!
This article was first published by Freightender CEO Pieter Kinds on https://log-tech.medium.com/the-future-of-tender-management-is-digital-88597715979