7 Tips for a Successful 2022 Freight RFP Season
We have all heard the saying attributed to Albert Einstein: “Insanity is doing the same thing over and over again and expecting a different result”. From that perspective, transportation has been crazy for a long time.
Uncertainty abounds as we begin 2022. Covid 19 issues aside, a concern for freight managers is the ever variable cost of transportation in the year ahead.
As we’ve seen in 2021 freight patterns and rates can shift suddenly and dramatically, so it pays to maintain a strong awareness of all factors that can affect the marketplace.
With RFP season upon us, Momentum has summarized 7 key tips for shippers to consider when planning transportation budgets and sourcing logistics partners.
1. Consolidate shipments to increase volume: Consolidating shipments reduces overall costs by increasing volume and efficiency. It also helps avoid loading dock congestion and can result in fewer accessorial charges.
2. Understand paper rates vs. truck rates: Sometimes what may appear straightforward on paper (like line-haul distance) does not reveal additional relevant details that could affect a bid, such as pickup or delivery appointments and loading dock hours of operation. A simple 100-mile haul on paper could take two days if the consignee cannot accept a shipment that arrives after 4 p.m., which would increase the cost. Be thorough – provide detailed background information to ensure you receive accurate pricing.
3. Become a shipper of choice: Today’s capacity constrained environment, with more freight than available trucks, has placed carriers and drivers in a position to select the shippers and loads that will be the most lucrative for their business. Shippers that provide better experiences for carriers can reap long-term benefits in the form of higher service levels, fewer claims and better rates. To be a shipper of choice, run efficient and friendly dock operations, reduce driver wait times, provide comfortable breakroom and restroom accommodations and pay carriers swiftly and accurately.
4. Drop trailers for high volume: Since the inception of the 2018 ELD Mandate and HOS rules, carriers have become increasingly conscious of loading and unloading time. Drop trailer programs create flexibility for shippers to load trailers at their convenience, reduce the cycle time for loading and unloading, and provide ample planning for carriers to align power units and drivers’ hours of service. All of this helps to keep freight costs down and mitigates capacity challenges amidst dynamic freight markets.
5. Communicate objectives and important KPIs: Service quality is as important as price, so be sure to communicate key performance indicators (KPIs) to potential service providers. Quality logistics service providers will hold themselves accountable and benchmark for continuous improvement to ensure they are making an impact on your business. On-time pickup, on-time delivery and tender acceptance or rejection percentages are a few examples of important KPIs.
6. Plan and budget for high-demand periods of the year: Look ahead and forecast for times during the year where higher-demand for capacity could impact your costs. Produce and harvest season and holidays typically place increased demand on trucking capacity, which in turn could raise rates.
7. Establish strategic partnerships: Instead of focusing on price and commodity-based services, look for ways in which logistics service providers can be consultative and bring value-added operations to your business. A strategic partner is constantly looking for opportunities to save your company in overall costs. The most effective partnerships evolve when you integrate your firm’s ERP and supply chain systems with a TMS to provide end-to-end supply chain visibility.
Growing complexity in the supply chain demands innovative and consultative approaches to logistics management. To learn more about selecting the right logistics partner, call 1-647-792-0478 to speak with one of our highly trained professionals or email our Director of Business Development John Soule at email@example.com.
Interested In Learning More?
Our 24-hour contact service is ready and willing to help. If you have any messages, please contact them with the information below.
Please direct all media inquiries to: firstname.lastname@example.org