Any logistics expert’s job involves a significant amount of negotiating. Even though this might take many different forms, you bargain the most when you submit packages to carriers. Through freight bidding, you may get transportation services at a cost that benefits your business, your clients, and your bottom line.
The four most popular and successful logistics strategies employed by businesses across industries are described in this article.
Consider how crucial it is to secure service at a reasonable cost; doing it quickly is also of the utmost importance. Mistakes and delays in shipment can result from an inability to lock in reasonable pricing. With this in view, you’re willing to consider your options, make changes, and further optimize your contracting procedures.
This method has changed significantly over the years (especially in the digital age), and the bonded trucking you engage with now offers freight in several different ways. There is no “optimal” way to propose freight; each approach has advantages and disadvantages.
Each of these steps can be justified in the appropriate circumstance, but there are other situations when transporters may want to offer freight differently. Budget, labor, timeframes, carrier pool, freight quantities, and other factors all rely on your particular circumstance.
Here are four typical freight tendering methods offered by land transport services along with an analysis of each one’s benefits to assist you in making your decision:
- Choose a third-party logistics 3PL company
- Employing broadcast bidding
- Implementing a pipeline framework
- Making use of market prices
Your process for proposing freight is a crucial component of your logistics strategy because repeated tender rejections can result in significant costs. What you should know about these five tactics is as follows:
Choose a third-party logistics 3PL company
Businesses all across the world have been using 3PLs more frequently in recent years. These service providers manage different facets of each customer’s supply chain, with their engagement being determined by those demands.
A 3PL frequently manages everything from carrier identification and monitoring to accounting, paying freight costs, and even designing product labels.
Posting RFQs and then bidding on your freight are a few of the tasks a 3PL can undertake for your company.
Benefits of employing a 3PL to quote on your freight include:
- Your business may devote manpower and focus to other duties by using a 3PL, which helps you increase efficiency in numerous ways.
- Excellent 3PLs have access to market prediction and budgetary tools, which aid in ensuring proper costing.
- Experts in shipping and great 3PLs ensure your cargo is delivered to reputable parties.
- Long-term cost savings can come from working with a 3PL since you won’t need to hire workers to handle your operations.
Employing broadcast bidding
Another strategy that many shippers employ to meet their transportation needs is streamed pricing.
The broadcast bidding process, in its simplest form, entails posting/offering cargoes at rates predetermined by the client (depending on what they are ready to pay) and subcontracting them to the first provider that offers to haul them at that amount.
Shipping companies can field amended offers from their channel and choose the nearest provider to their “broadcasted” tariff if no companies agree to transport their cargo at the quotation they have established.
This efficient first-come, first-served approach has a lot of potentials, especially in areas with lots of available capacity.
Benefits of publicizing your freight’s bid:
- Live bidding enables shippers to obtain dependable coverage without engaging in negotiation when the initial price announced is correct and reasonable.
- Tendering via presentation may be a rapid and effective method.
Implementing a pipeline framework
In recent decades, cascade contracting procedures have become more widespread. Shippers present cargo to carriers and include a target rate-per-mile (to establish a starting price they are willing to pay) to administer a waterfall proposal. Each page evaluates its capabilities using this knowledge, then provides a rate to the consumer.
From this point forward, carriers are ranked in ascending order of cost (based on the rate they quoted for that shipment).
After receiving an order, the first carrier has a predetermined amount of time to refuse or accept the proposal for that shipment at the rate they initially offered.
The primary goal of shippers that use a waterfall tendering approach is to obtain a specific price, leaving minimal space for significant discussion.
Making use of market prices
Subcontracting out your cargo by fielding separate spot prices may be the most common way on our list, and it’s also the best option under special circumstances. By contacting logistics companies by phone, email, website, or TMS and asking for bids for a consignment, shippers can secure capacity utilizing this strategy.
Fill your platform with outstanding firms by utilizing those KPIs. You deserve to collaborate with dependable carriers.
