RFQs are an interesting thing – how so depends on your perspective. As a freight forwarder issuing a bid, they are actually a chance for you to be the customer for once. Instead of dealing with shipper problems and customer service issues, you are in the position of having something other logistics services providers and carriers want – new business.
Despite having that leverage, it’s still incumbent on you to properly manage each RFQ event. Bids are only ever as successful as the quality of the planning put into the bids themselves. This responsibility lies with you and requires a lot of planning and preparation – here are our tips to help.
Clearly Explain the Business
Any supplier you invite to a bid needs to know what they are bidding on. This is obvious enough and a simple concept. Yet a common mistake issuers make is providing an incomplete picture of the business. With so much of shipping RFQs revolving around cost and volume data, providing a complete shipping history over a long period of time is the bare minimum responders will need. Don’t be one of those issuers who force vendors to extrapolate or annualize volumes based on limited data sets.
Plus, you want the participants to have a clear vision of your business beyond just volumes. Most shippers have product and industry specific requirements – from unloading to special handling to lead times. Providing carrier partners this information upfront is a must.
Keep It Simple
In addition to a clear vision of what they are bidding on, you want participants to be able to provide accurate responses with a reasonable amount of effort. Over complicating the requirements for a carrier will make it difficult for them to respond with their best offers and can sometimes prevent them from responding at all.
This is understandable because responding to bids is a big investment in time for logistics services providers, with no guarantee of earning them any new business. Many quality carriers will refuse to participate in bids they think are poorly or unfairly built. If this is happening to you, take note.
Establish a Process
Once the responses start coming in is where the real work begins. A well-structured bid, and organized tender process is necessary for you to have a process for receiving and analyzing the responses in a constructive way.
In the end, it’s in your interest to pick the best qualified suppliers and optimize costs – which includes all the less quantifiable factors like service and technology. Creating a process to consider and compare each part of the bid and all the responses in an “apples to apples” way is important.
Find the Right Suppliers
Inviting as many suppliers as possible just because you can is a waste of your time (not to mention the carriers’). The business you are bidding out is not right for every company. Like preparing and structuring the bid properly in the first place, finding and inviting the correct types of carriers is vital. The right carriers provide the best service and rates – which is what you want from your bid in the first place. The best (and smartest) carriers can tell when a bid will be a waste of their time. Letting them know what to expect during the bid will give them confidence in your company. This includes setting expectations for how you’ll provide feedback and if there’ll there be a round two, for example.
Successful bids build successful carrier partnerships and it’s always important for forwarders and shippers to have diversity in their carrier portfolio. By all means keep them on their toes and negotiate hard – but a well-run RFQ needs to show potential suppliers you have your act together too. Smart companies will always recognize you’ll be good to work with and will try extra hard to win your business.