Tis the season to be jolly – until you might be overwhelmed with the various duties historically related to the annual freight Request for Proposal (RFP) season. For many years, shippers have sought proposals and awarded contract lanes to carriers. Shippers and carriers have described the method as time-consuming, and the outcomes are sometimes out of date three months right into a year-long contract because of market dynamics.
The unique intent could have been for shippers to safe capability at agreed-upon charges and for carriers to make sure they’ve sufficient volumes to maintain their vans loaded and transferring. Nonetheless, the truth is that contracted freight is definitely a promise – not a binding settlement.
Carriers routinely implement Common Fee Will increase in the course of the contract interval. On the similar time, a retailer whose product demand drops sharply has much less want for transportation capability and due to this fact tenders decrease volumes to contracted carriers.
These actions should not pushed by both celebration to keep away from their commitments – they end result from a previous observe that not works in at the moment’s fast-moving enterprise setting. Fairly merely, loads can change in a yr.
The frequency of RFP occasions is just one space that may be improved as shippers search for a greater method to handle freight procurement processes.
Flexibility to schedule price bid occasions primarily based on enterprise wants
Some objects on a shipper’s “Want Checklist” for freight procurement are flexibility, visibility, and effectivity. Slightly than implementing bid occasions yearly “as a result of that’s how we at all times did it prior to now,” savvy shippers are scheduling bid occasions that meet their cyclical and enterprise wants. Some firms maintain bid occasions quarterly, and others implement advert hoc bids to handle points inside a particular geography.
Visibility to make more-informed selections
Each shippers and carriers discover that direct communication in the course of the bid course of can save money and time and result in contact preparations which can be a very good match for each events. For instance, carriers can find out how they evaluate towards others bidding for particular lanes and make knowledgeable selections. If the lane doesn’t match their community profitably, they’ll select to not bid for that lane whereas bidding for different freight from the identical shipper. This transparency permits shippers to concentrate on bids almost definitely to fulfill their necessities for service and worth.
Effectivity in freight procurement permits firms to have interaction in different value-added work
A significant distributor as soon as commented, “In at the moment’s setting, I must be loopy not to take a look at each side of the provision chain to realize effectivity.” Up to now, a freight bid was performed manually utilizing electronic mail and spreadsheets and took months to finish. This labor-intensive course of positioned even higher strains on small logistics groups. And it tied up assets that may very well be higher allotted to different points of the operation.
Get away the eggnog as a result of there’s a higher method to handle freight procurement
Happily, these and different points of freight procurement will be improved by know-how at the moment accessible available in the market. The Emerge Freight Procurement Platform has helped firms remodel a course of that when took months to 1 that takes one to 2 days on the most. Emerge additionally provides a market that connects shippers and carriers instantly – offering them extra choices for capability and carriers entry to firms they might not have served earlier than. And with higher effectivity, logistics managers can concentrate on strategic points to set the course for the longer term relatively than spending time on legacy processes which can be not efficient.
Debra Phillips, Advertising Supervisor for Emerge, has labored within the transportation, logistics and provide chain industries for greater than 20 years. She has held positions of duty with a world transportation companies supplier, a nationwide trade commerce affiliation and a truck rental, leasing and devoted logistics agency. A graduate of the College of West Georgia, she is a resident of Jacksonville, Fla.