“Also make sure to have a mix of asset providers and brokers in your freight awards,” says Tim Lang eld, senior vice president, sales and business development,
for MVP Logistics, a 3PL based in Minneapolis. “Asset carriers do a great job of
consistent lanes and volumes while brokers can tap into available capacity that you may not have known about,” he says. “They also are always good to work on last-minute loads or changes.” An effective RFP emphasizes transparency with carriers as part of relationship-building. “It’s also important to guarantee fair treatment of carriers throughout the bidding process, offering suf cient time and being trustworthy regarding realistic volume estimates and service requirements,” says Mike Weaver, vice president of sales for DAT Freight & Analytics, a freight exchange service and provider of transportation information based in Oregon. “The speed of decision-making and implementation is a key factor for the overall effectiveness of the RFP,” he notes. When shippers are transparent with their expectations and level setting they can get on the same page with carriers. “It’s also important to understand what’s ‘normal’ or standard practice for LTL carriers so that shippers know what service expectations to ag,” Day says. “For example, if a shipper says they want their freight picked up by 10 a.m. or they need weekend pickups and deliveries, live load, drop trailer, or other service requirements, they may be outside of normal practice for carriers,” he says.
A successful RFP conveys all information that would impact pricing, such as specialized transportation requirements, equipment types, and seasonality.
Meetings can strengthen the RFP process. “Having a group kickoff meeting for an RFP is good—however expanding that and having an individual kickoff meeting for what you would like the team to work on or focus on is better,” Lang eld says. Shippers should be exible with changes to allow for a mutually bene cial contract and legal teams for both parties should be available for questions and negotiation. “Often shippers evaluate willingness to sign an agreement versus evaluating the ability to live up to the commitment, creating an uneven playing eld in contract terms,” Burke says. “Legal teams should work with nance to con rm an RFP participant can meet obligations, such as the ability to pay. Or if they are asset based, they have the eet size to support the freight award.” There is only so much that you can convey in an RFP document. “I suggest shippers have a conversation where they can convey what’s important in the RFP,” Day says. “That discussion enables two-way dialogue between shipper and carrier, whereas an RFP document by itself can be a one- way communication. “I would also advise shippers to provide the most accurate, complete data they can, as that facilitates a carrier’s best possible offer,” he adds. “When carriers see information is missing, they may take a conservative approach with what they offer. They may even decline the opportunity.”
Identifying these considerations early can help focus the conversation on what’s important for shippers and manage expectations upfront about feasibility and cost. “You need to de ne the operational aspects that a shipper wants compared to a carrier’s standard offering, and address the gap in between,” Day adds. Create comprehensive, accessible RFPs and bolster them with discussions. Burke recommends that shippers use technology or third parties to host their RFPs. The documents are too important to leave to someone unseasoned. “You need someone experienced, who knows the ins and outs of each mode and what carriers look for,” McDonagh says. “There’s too much money on the line to leave it up to just anyone—it shouldn’t be their rst rodeo. “You need someone with a full perspective, not just someone in nance who knows numbers or someone who knows only logistics,” he says. “Creating an RFP is one of your biggest line items and leaving it to an amateur can cost you a lot of money.”
“Not planning your strategy for the year is a big mistake. You need to have those conversations and planning sessions far enough in advance of an RFP so you know what is acceptable to negotiate based on your business needs.” —Micheal McDonagh, President of Parcel, AFS Logistics
158 Inbound Logistics • January 2024
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