Transportation Tender blog | Freightender
Running a Transportation Tender is an expensive and time-consuming exercise for all parties involved. For shippers, running a mid-sized tender could easily run up to € 15.000, mostly because of the amount of time and effort you need to invest in the whole process.
Just to sum up how cumbersome finding the best suppliers can be, a quick overview of what shippers must manage during a tender.
1. Data Collection and Rate card Set up
Once the initial tender is launched and approved, it is procurements first task to start with intensive data gathering. The responsible manager (s) typically collects data from different business units and departments, such as operation, finance and sales to identify existing volumes, costs, shipments information (Lane Definition) and other requirements.
Freightender tip: Shipment information and the historical costs are always available!
Your own ERP, TMS or Business Intelligence tool could contain the data for instance. Or else, your 3PL or current supplier will be able to deliver extracts with data. Combine, convert and cleanse the data to meet the requirements and you’re ready to run the tender.
The Freightender recognizes, upon uploading your raw data (historical shipment data) the kind of tender you’ll be running and automatically creates Lanes and Tender Profiles. The tool does this because, for instance, airfreight tenders require a different kind of rate card set up than FTL, Ocean or parcel tenders. What the tool offers is a market standard rate card that you can edit to meet your specifics, customize it to your own needs. By working in this fashion you save a significant amount of time because you don’t have to create the rate card from scratch. A rate card consists of 3 parts, the Lane (first parts), the Costs (2nd part), and the additional informative fields to request items like Lead Times or Cut-off times.
You’ll always end up with a rate card that covers all elements you need to agree upon, without room for interpretation.
Don’t forget the Business Rules
If you have freight costs based on for instance Chargeable Weight, then you also need to agree on how to calculate that; the conversion rules, rounding rule, what is a minimum price, how to apply the Minimum rule, etc. Even without a lot of market knowledge, you can create tenders and you can fully do this quickly yourself, no need to hire a consultant. Many tools do not have this critical and time-saving function for logistics.
2. The RFP: Invite your suppliers
Next step is to invite the suppliers. During this step, shippers make use of a spreadsheet/email approach or use a procurement tool to invite suppliers to participate in the tender process. Communication with suppliers has just got started. If a supplier has a question, the shipper has to make sure everyone involved is provided with the same answers.
During the creation of the Transportation Tender, the tender manager is able to quickly add potential suppliers. Upon opening, this data is verified and the suppliers are then invited to the tender. What follows next is a smooth and quick process, for both the shipper and the supplier. Communication between a party or all parties involved in the tender runs online, inside the cloud. The responsible person on the shipper’s side is no longer scavenging all information and running complicated communications streams. Instead, he has one, real-time environment from which he can take all the actions needed to manage and monitor the remainder of the tender.
The supplier can invite people to the process on their side, while the shipper can easily invite colleagues and potentially set specific roles (e.g. Tender supervisor)
3. Scenario building, benchmarking and nomination
Once the submission deadline (round 1,2 or 3) has ended and the potential suppliers have submitted their freight quotes, the shipper then ranks them based on certain criteria. With modern freight procurement tools, the shipper can source the business on cost amount, lead-time, scorecard results (comes from the questionnaire) or set a custom ranking. Thereafter, the shipper’s communication with the supplier continues. The feedback and targets are shared with the suppliers. This part of the process can take several rounds of discussions until the shipper and suppliers enter into detailed contract negotiations. (Cloud-based communication is again a big time-saver in this stage of the tender process).
Typically, we reduce the time spent on transportation tenders with 90% as we have automated many calculations and excel related actions that you don’t have to do anymore. As you can imagine, data analysis, comparisons and carrier selection are becoming very efficient as the platform has done the hard work for you.
1. Quick Views
Obtain instant ranking for a selection of the scope by adding a custom scope. Find out who is the best for a certain flow or quickly check in a meeting if the offered discount will really make a difference. Gain more insights by opening the available charts or downloading the raw data with cost simulation results in Excel for own analysis.
2. Scenario Building
A Power Scenario is a scenario that defines the most optimal sourcing based on set criteria. The output is an Excel file with ranked suppliers. The recommendation contains the most optimal way to source based on the criteria.
3. Instant Reporting
Clean-cut, most-used reports that are instantly available for benchmarking and communication with suppliers. We currently have 20 built-in reports available in just a matter of seconds.
Transportation Tenders: Kiss the frustrations goodbye
Let’s presume you run a couple of freight tenders per year. How much time and attention will that require from you and your team? A very interesting question, but perhaps even more interesting is the possible time savings you can gain by using the right tool for your carrier selection process.
About Freightender – Transportation Tender Software
Freightender is the easiest to use freight tender tool available in the market today. A cloud-based platform for sourcing of Road, Air and Ocean freight.
In comparison to older tools in the market, Freightender works much faster, more user-friendly and uses the latest technology for an intuitive user experience. No training, no implementation, and no consultants are needed to create or run a tender.
Therefore, Freightender can save you enormous amounts of time and effort when running freight tenders and takes care of all the calculations. You don’t have to rely on third parties or your own Excel guru anymore.
If you want to learn more about the most user-friendly Transportation Tender tool in the market, do not hesitate to request your free of charge trial environment today. Fill in your details below and we will contact you as soon as possible.