The value of keeping it simple when it comes to freight tenders

11.07.2019

 

When creating a freight tender, it can be tempting to make it as detailed as possible. After all, you know your business and exactly what you need, right? Well, there are a few issues with this approach. In this post, I’ll explore why less can sometimes be more.

 

Play by a small set of clear and easy rules

Throughout the tender process, making sure that everybody is on the same page and on a level playing field is of the utmost importance. 

After all, a freight tender is little more than an advanced exercise in comparing apples to apples in a quest to find the cheapest, shiniest apple. In order to succeed in that, first you need to know that you’re actually comparing apples to apples and not various kinds of fruit from as many carriers. 

In my experience, and undoubtedly yours as well if you’ve been in the game a while, misinterpretations and assumptions will mess with your results if the rules aren’t clearly laid out for everybody involved. 

In a best-case scenario any inconsistencies will be caught and corrected before negotiations, but often trouble doesn’t surface until after implementation, when unexpected costs or services hidden in a complex rate structure come to light. 

 

Avoiding unpleasant surprises

The first thing you need to do in order to avoid unpleasant surprises is to set very clear rules for how carriers are allowed to offer their services. 

This is not to say that every aspect of a carrier’s bid should be stifled by an impenetrable web of rules and stipulations. A good way to strike a balance is to create a simple rate structure with clear rules for how to supply bids, but leave a great deal of freedom to the carrier in how to actually produce the solution requested. 

Less specifics on what precise service you’re requesting will allow each carrier to think outside the box and potentially come up with a solution that is of benefit to both parties. 

 

Focus on what’s important

Tempting as it may be, it’s not feasible for a buyer to evaluate too many aspects in a complete weighing of offers. As previously laid out in our blog about chasing the elusive “shorse”, focusing on a few aspects that are most relevant to your business often yields the best results with less work as opposed to trying to find the imaginary carrier that is quick and agile, as well as large and reliable. 

Instead, outline the most important criteria for you (e.g. price, lead time, flexibility) and focus on those aspects in your data collection and evaluation. The rest can be talked about in face to face negotiations, where it’s easier to agree on a “good enough” level that satisfies your needs while not adversely affecting your service to customers.  

Make sure that the things you do focus on are rooted in reality

To sum up, stop trying to accomplish everything and focus on making sure that the things you do focus on are properly evaluated. Put more time into ensuring that the data you’re working with is correct and relevant. 

Far too often do you see freight tenders launched and performed without a proper foundation in terms of historical and prognosticated data. If you don’t have the basic set of facts to stand on, it doesn’t matter how complex or precise you make the tender setup – it still won’t produce realistic, reliable or comparable results. 

With TenderEasy you can create a rate structure that suits your needs and, importantly, is loaded with your detailed shipment data, shipment by shipment. By ensuring that the underlying facts are validated and correct, you can be sure that the result you get is 100% comparable to your previous business. 

This will let you create a simpler, smoother and more easily understood tender, that will guarantee that the results you get from it are based on the same premises and the same understanding of your business from all involved parties, saving you lots of time on endless bid validation and correction. Time that could be better spent analyzing and negotiating the best possible solution for your business.

Go forth and tender! 

 

Written by
Jacob Wiklund

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