There’s a point in most company’s growth when the process of finding partners and procuring logistics services needs more structure. Looking for carriers and assigning loads on an as-needed or spot basis can work for small companies with simple shipping operations, but only to a point. For businesses booking freight more consistently, a formal bid strategy including an RFP becomes a necessity.
And, even if it’s the first time a company puts out a bid, there are no excuses not to do it right. Poorly planned or overly simplistic bids won’t cut it in the current marketplace. Capacity is historically tight, and it’s the carriers who have the leverage right now, for sure.
With capacity constraints here to stay for the foreseeable future, shippers need to have an effective freight transportation procurement process in place. The best bidding strategies set your business up for long-term success, and it’s crucial to have the proper plan and processes in place before you get started with every RFP.
Here are three tips to make sure your freight bids produce the results you need:
Forecast with Good Data
Before jumping into any bid, shippers need to have a benchmark of current rates (rather than just relying on the previous year’s prices) to get an accurate understanding of how competitive their rates are in the proper context. Here’s where leading benchmarking tools can help companies leverage recent market data and enable dynamic freight forecasting.
Furthermore, most shippers should recognize that it’s not just the market rates that change; their transportation needs can change over time, too. So, make sure you’re paying proper attention to how your logistics needs have, and will, change over time.
Many shippers ignore including an RFI (Request for Information) as part of their bids. Bids are always more effective when you make an effort to establish expectations and other minimum requirements at an early stage.
Companies can never be too thorough when bidding. And, as carriers are given the chance to quote rates and have all the possible information on lane origins/destinations, services, payment terms, etc., it’s still important to provide the opportunity for carriers to ask any questions it has. The better carriers understand your business, the better rates and service they will provide.
Good carrier relationships need to work for both parties. You’ll get a lot further by making a conscious effort to maintain positive, mutually beneficial partnerships with your transportation providers.
Shippers should also develop a reasonable timeline for their RFPs to keep all parties involved accountable and avoid dragging out the process. Try creating an internal system that allows you to track where you and bidders are in your timeline to verify carrier compliance. Last but not least, integrate advanced technology that can help you better manage your bid execution and more easily distribute/update your RFPs.
To learn more about how Loadsmart’s cutting-edge tools and innovative vision enable shippers to move more with less, click here.
Transforming the future of freight, Loadsmart leverages artificial intelligence, machine learning and strategic partnerships to automate how freight is priced, booked and shipped. Pairing advanced technologies with deep-seated industry expertise, Loadsmart fuels growth, simplifies operational complexity and bolsters efficiency for carriers and shippers alike. For more information, please visit: https://loadsmart.com.