The biggest complaint of suppliers and carriers when it comes to freight tenders? The huge amount they receive every year. Over and over again!
Shippers often move the same freight portfolio for years and years, and the corresponding freight RFP’s process is, therefore, the same. This is resulting in a commoditized process, which has over the years a negative effect on the relationship with suppliers.
As companies change, services and products change, shippers can run the risk of overlooking certain (new) aspects of their business. Moreover, the transportation environment is constantly changing and disrupting the way we ship goods from A to B. This is why tender managers should be ready to take action and improve the tender process.
The biggest carrier complaints lined up
First, let’s investigate what main complaints are from carriers.
- Poor data quality
Before conducting bid, get your data right. Garbage in is garbage out! It is essential that the carriers in the bid are supplied with accurate data upon which they can submit their quotes. The data should be cleansed to remove errors in weights; the volumes in certain lanes should be corrected to reflect new customers added during the year and the loss of some old ones. TenderTool Tip: Use software in order to split lanes into weight brackets showing the carriers where the interesting lanes/lines are.
- The high amount of carriers in a tender (commoditized tender)
- Poor documentation management
- Low professionalism
More reasons? Please read the following blog from our CEO, Pieter Kinds: The top 10 reasons why so few carriers took part in your transport tender
Tender Manager: Why you should take action
As a result of the previously mentioned points, carriers are swamped by faulty tenders and RFP’s, that lack data, clear instructions and normal rate structures. It is time to properly streamline the tendering process so that carriers can actually work on a serious quotation instead of using all of their time to decipher tender documentation. Technology is the solution to address all these issues, but exactly that is where (logistics) procurement is falling behind. Big time.
A recent research of Procurement Leaders into technology and the procurement function found that Procurement is still slow to adopt the big technology trends that are shaping business both in terms of expertise and investment. Procurement teams need to play a fast game of catch-up and embrace technology. Procurement is often late to the party when it comes to technology. Procurement teams in logistics are no exception. This article, How prepared is procurement to adapt to new technology trends? provides numerous explanations for this so-called slow adoption of technology.
Interesting to understand is the reason why Logistics Procurement specifically hasn’t embraced technology yet. Despite the fact that the logistics industry is finally turned upside down by the many innovations and start-ups, procurement is in many cases (over 50%) still a full Excel-based procedure for companies.
In this infographic, we have gathered data from multiple resources to investigate how transportation procurement fits within companies. What are the factors holding technology adoption back? Are there key area’s to focus on? What transportation mode requires automation the most? And what are the procurement pain points Logistics professionals must address in 2017? Click on image to enlarge and enter full article.
Tender Manager: Don’t forget about these final but important factors
Inventory & production management
New product launches
Packaging (Industry changes affect weight and density)
Surcharges (Stay up to date)
Order fulfillment process (e.g. changing lead times can lead to combining daily LTL orders into larger shipment sizes)
More TenderTool – E-procurement content
5 simple freight tender tips carriers should share with shippers
Ocean Freight Tendering: 10 Tips For Shippers
Road Freight: How To Improve Your FTL Tenders
Join the Freight Tender Revolution with TenderTool!
TenderTool is the first end to end collaborative freight tender platform that allows all parties involved to work on the same data set, standardized rate cards and with 1 communication structure. One platform from Shipper to Carrier and Subcontractor. Request a free live demo, or visit our Linkedin Knowledge Centre for more information.
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