How to Master RFP Season
Peak freight season may be in full swing, but everyone in the transportation industry is already looking forward to 2024. Preparations this time of the year typically include a close inspection of the carriers within the network and a search for additional capacity and partners through what can be a grueling request for proposal (RFP) process.
With only a few short weeks left in Q4, most shippers are looking for ways to master the RFP season and set themselves up for success when the calendar rolls over. Whether your organization wants to scale your carrier network or replace underperforming partners, data is the critical component that can streamline the RFP process.
With more accurate data, decision-making improves, and clear frontrunners emerge, saving time and money and ensuring that you put your organization in the best position possible to start the new year on a high note.
Trax technology leverages comprehensive data to simplify the complex RFP process challenges. Tools like a freight audit and payment technology allow you to see which carriers meet their contractual obligations and which are underperforming.
RFPs: Beyond Cost Consideration
An RFP, at its core, is a formal call for a logistics provider or carrier to build and present a solution to a shipper to move goods. That being said, RFPs have several components that must be weighed and measured before deciding to move forward.
In most circumstances, the first line item shippers look at is cost. Because of its effect on the organization’s bottom line, it might make sense that this is the logical starting point simply because it has to fit within the budget parameters.
However, only judging an RFP based on this single line item is a pitfall that should be avoided. The reality is that an RFP is an opportunity for carriers to showcase their strengths and capabilities. While a higher rate might send off red flags, it can also indicate the qualities you are looking for in a freight partner.
Higher costs don’t always mean a carrier is trying to squeeze an extra buck out of the relationship. They may have a higher rate because they have a track record in customer service, on-time delivery, billing accuracy, capacity flexibility, and more.
For the carriers currently in the organization’s network, these factors can be seen through accurate freight audit data and carrier scorecards. By using the existing benchmarks, you can quickly and accurately see the playing field and make a decision based on quantitative data rather than gut instinct.
Constructing a Comprehensive RFP
Moving beyond cost is a significant first step in evaluating, but we cannot put the cart before the horse. The process begins with constructing a well-designed RFP that provides the information needed to make an informed decision.
So, what makes a great RFP?
With any RFP, the goal is to gain accurate information and insights into a potential partner. Having a clear picture is essential because the carriers in your network have a direct hand in your ability to meet customer expectations and grow your business.
This means looking at the partnership from as many angles and perspectives as possible. Here are five pieces that should be included in every RFP.
Think of an RPF as providing the carrier a chance to open their books and show why you should trust them as a freight partner. A key piece to this side of the picture is their technology capabilities. The tools they use to manage their business and communicate with shippers should be front and center.
Again, rates don’t tell the whole story, but they must be included in this list because the budget ultimately impacts the bottom line of any organization. Throughout thousands of shipments, even a slight variation from the market average for base rates can have a big impact.
Special Handling Needs
It is a simple fact that not all carriers will be able to meet the needs of every shipper. This is especially true if your organization has special handling needs and requirements. Specific endorsements and permits cannot be overlooked if you ship dangerous goods, chemicals, or oversized products. You wouldn’t hire a carrier specializing in dry freight to haul hazardous materials.
Trust is an essential component of any partnership, but within the supply chain, that trust goes beyond “will this company be reliable.” Compliance and regulatory requirements are constantly changing, and working with a partner with a history of questionable practices can be a massive risk for your business. Items like hiring practices and compliance, safety, and accountability(CSA) scores should be closely monitored.
In the supply chain, on-time performance is everything. It impacts customer service, operational costs, and more. Carriers that struggle with on-time delivery can throw a wrench in the entire process. Port entry delays can result in delayed pick-up by an intermodal partner, ultimately impacting warehouse stock levels and culminating in sub-standard customer service.
Mastering RFP Season with Trax Technologies
As we mentioned at the beginning of this article, the key to streamlining the RFP process is to leverage comprehensive and accurate data. Organizations that rely on a manual audit process or third-party data can quickly put themselves behind the 8-ball. It is not uncommon for information from multiple sources to be incomplete or incorrect, complicating decision-making.
Tools like freight audit and payment (FAP) technology allow global organizations to aggregate data into a single source of information. This eliminates information gaps and makes gaining real-time insights into every freight partner within your supply chain network easier.
Data collected throughout the year can then be leveraged as benchmarks to evaluate the carrier performance of existing partners and establish a baseline for those selected through RFP season.
At Trax, we aim to provide organizations operating within the global supply chain with the tools to quickly and accurately evaluate their transportation spend. Our tools can streamline processes and reduce operational costs through machine learning and artificial intelligence.
To learn more about Trax’s transportation management spend technology, visit our website and connect with our team for a consultation.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.