This blog will discuss the ten components you should include in your freight RFP that will help you evaluate partners who can contribute to your success.
Introduce your company and your unique shipping needs. Provide enough background to help providers understand your products and supply chain.
Define your business needs, requirements, and operating models. Providers will be better able to tailor their proposals to support your goals.
Do your shipments require specific licenses, technology, or service capabilities and requirements? Specify any high-value or niche insurance requirements.
Ask foundational questions to help you understand a provider's business capabilities, how they will meet your requirements, and their scalability as your company grows. Include questions about their business history, coverage area, network size, and relevant certifications. Also, ask for payment and billing terms, deadlines, and length of commitments.
Even if you're working with familiar partners, provide detailed lane data, including the origin and destination ZIP code info, freight volume and frequency, commodity types, cargo values, special equipment, delivery requirements, terms and conditions, and facility profiles. A strong provider will leverage this data to analyze your supply chain to identify network optimizations and consolidation opportunities and create custom solutions for your unique business.
Be clear about how you will measure success. Tracking transportation metrics provides context for understanding and implementing transportation best practices to support continuous improvement in the relationship. Common KPIs in a carrier relationship include on-time performance, least-cost carrier compliance, and cost. Creating a data-driven relationship will help you manage your supply chain providers for performance and accountability.
Ask providers to include information on how many people will be assigned to your business. What capabilities does the provider have?
While cost is substantial, consider other factors that create overall cost savings and efficiencies. Include technology, managed transportation capabilities, reliable capacity, value-added services. Cyber security is becoming a more critical factor in these relationships.
Be clear about the goal of the RFP. Identify primary and secondary lanes to target and seasonality and frequency of shipments. Work with providers to identify cost-efficient streets for their network. Consider providers with a diverse mix of carrier size and coverage. You may find untapped capacity with regional and niche carriers.
Ask what the implementation and rollout process will be and who will be involved, such as any sales rep participation. Outline the schedule of onboarding calls and the mechanism for evaluation and performance tracking. Also, request the ratio of committed lanes vs. uncovered lanes.