Improve the RFP Process – For You And the Shipper

The goal of an RFP is to create a relationship between a shipper and a service provider for a defined period of time. Typically it’s quarterly, half a year or a full year. It should create sustainable, routine freight movements. During this time, relationships are built, familiarity with locations is established, and collaboration occurs. 

Defining your approach to a shipper’s RFP/RFQ/RFI can look like the following:

First you need to learn as much as you can about the shipper, processes, and behavior. Next, discuss internally about how aggressive or conservative you want to be.  You can bid on all lanes, select a certain amount, or be really targeted and only price a handful. Internal communication about intentions can ensure team members are not overly optimistic about the expected outcome.

Questions to ask internally as the review starts:

• How much do I know about this shipper, retailer, manufacturer?
• Am I an incumbent or is this a brand-new opportunity?
• Is this a national, regional, or local shipper?
• What’s the total transportation spend of this bid?

Once you’ve identified these points and decided it’s worth pursuing, there’s usually some company information that you have to provide. This might include but not limited to company designation, demographic information, insurance requirements, and other qualifying questions.

Intangible elements:

• How is the shipper to work with? What information can you gather through your network or online?
•  Are there open lines of communication with the company or will you be dealing with a 3rd party?
•  Is there a kickoff meeting? Is it done through a 3^rd party application? If so, how is communication expected to occur?
• What’s the implication of dealing with this company? Can this lead to new opportunities?

Tangible elements

• Shipping and receiving facilities
• Hours of operation
• Equipment types – van, reefer, flatbed, sprinter, box truck, intermodal, drayage
• Product characteristics – high value items, hazardous materials, commodities, electronics, food and beverage
• Transit time – single vs team drivers
• Insurance requirements – average, above average
• Drop vs live trailer when loading and/or unloading

Beyond pricing, what other factors matter to the shipper

• On Time Delivery, On Time Pickup
• Communication
• Technology
• Warehousing capabilities
• Managed transportation
• Cross docking
• LTL or partial options
• Intermodal

The overall goal of an RFP is to create an efficient, sustainable network that can deliver the right product to the right place at the right price.  When it’s not done right, there’s frustration, confusion and negative financial implications. However, when it’s done correctly, all parties benefit by providing predictable revenue and volumes. Before you take on that next RFP, make sure you’ve done your diligence and can meet the shipper’s expectations.