An Efficient Freight Tender in 8 Steps

The Dutch Start-up space is booming. We have been a seafaring and trading nation for a long time, so it’s no wonder that there is a lot of innovation in the logistics space. I recently came across another great addition to growing group of Dutch logistics innovators: Tendertool.

The best part of being a logistics blogger is that you get to speak to people that are very passionate about logistics. Last month I met with Richard Bovée, who is one of the founders of Tendertool, and he definitely falls in that category. He is on a mission to make the freight tendering process faster, more effective and more efficient. We spoke about freight tenders and the issues that companies have when tendering for freight. We also talked about the requirements of an efficient and successful tender and how to get there. Hence the title: An Efficient Freight Tender in 8 Steps

1. Create the baseline

It all starts with collecting the raw shipment data on the current operations. Keeping “Garbage in is garbage out” in mind, the quality of the data should be as good as possible. This data needs to be analysed to come to come to shipment profiles.

2. Create shipment profiles

With shipment profiles you get a clear overview of your shipping needs. Different profiles have different requirements. There may also be a difference in rate cards per profile. Good shipment profiles will make sure that the right carriers are selected and invited for the tender.

3. Create the questionnaire

A good questionnaire is important. The questions are there to make sure all business requirements are clear. Specific certifications may need to be in place, or certain equipment may be needed to be compliant. A good questionnaire makes it clear for the carriers what is required, and it also makes sure that the right carriers are selected.

4.  Create the rate card(s)

There are several reasons why a good rate card is important. You have to make sure that all business requirements are covered by it. There should be no room for interpretation when filling these out. That way it is easy to make an objective analysis of the rates provided by all the carriers selected for the tender. There will also be no surprise additional fees later on. If there is no room for interpretation, everything is clear to everybody.

5. Send out the RFQ

This step seems simple, but it is not. The quality of your carrier database is very important. The better the fit between your requirements and the capabilities of the carriers you invite to bid on the tender, the higher the quality of the outcome of the tender.

6. Create a short(er) list

The questionnaires and rate cards that are returned by the selected carriers need to be returned and analysed. One carrier may be the cheapest on a single lane, but another carrier may cheaper when combining multiple lanes. Based on your analyses, carriers can be selected for a subsequent rounds.

7. Impact analysis

When all carriers have responded, all questions are answered, and all rate cards are filled out it is time for analysis. Not all carriers are the same, and not choosing one carrier for one lane, may have an effect on the price of another lane you do want to use them for. Choosing the cheapest carrier for a certain lane, may have an effect on another lane that will cost more, than the cost of a slightly cheaper lane. Be sure to look at the impact on the full spend of the choices you make.

8 Get the appropriate approvals and award the business!

When the internal approval process has been followed and final negotiations have been successfully concluded, award the business. Tender done!

If you’d like to know more on efficient freight tenders, I suggest you contact Richard Bovée, and he can tell you much more than I have room for in one blogpost.

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