Resource Center/Article • 09/13/2021
Navigating Today’s LTL RFP Environment & Approach
Navigating today’s RFP marketplace is no small feat, especially in the LTL world. So, we’ve put together some advice to help.
As we all know, today’s LTL market environment consists of tight capacity, supply chain disruption, and rising rates. While there’s no end in sight – and most experts believe the pendulum won’t shift until late 2022/early 2023 – it’s never too late to begin thinking about what your next RFP might look like. Now is not the right time to go out and search for new agreements with carriers. However, that time will come, and preparation and thoroughness will be the key to successfully searching out new carriers, new pricing, and a more consistent LTL program.
With that in mind, we’ve developed a list of 12 things that every LTL shipper should consider before putting an RFP together. They are:
- What is your specific objective with your RFP?
- What are your objectives from a savings standpoint?
- Define how you will measure success in the RFP process?
- What type of technology requirements will you seek out? (eBOLs, EDI, API, etc…)
- Do you want to add or reduce carriers?
- How many different rounds will you have with carrier pricing submissions?
- Who are the carriers you will send the RFP out to?
- Will you make this a network wide RFP, or will it be limited to a specific geographical area of need?
- Are you going to give incumbents any special consideration?
- Be sure to clearly lay out key due dates and timeline – have you thought through the full timeline?
- How will you convey the delivery of your RFP?
- How will you evaluate and award lanes (Service? Price? Capacity? Technology?)
Once the above is determined, it’s important to compile all the necessary data that will be important to the carriers you submit the RFP to. The more comprehensive the data, the better responses you will receive. When carriers receive limited data, they must err on the side of caution and more than likely will either pass on bidding, or they will submit very conservative pricing.
With that in mind, there are 7 things you specifically need to know about your business before you send out the RFP. They are:
- Detailed lane data (# of shipments; average weight per shipment; class/dimensions, frequency, etc…)
- Expected variations from historical data (any changes coming?)
- Special equipment requirements?
- Contract to be utilized. You should have your own general terms and conditions to send carrier.
- Facility profiles, requirements around deliveries, appointments, etc…
- Pricing templates. How do you want to receive pricing from carriers and how will compare?
- Know your selection criteria and KPI’s that you will use to measure carrier and program performance.
So, why look to Green Mountain for LTL RFPs? We look at the shipper/carrier relationship differently than most. We base our recommendations on strategy, efficiency, and cost effectiveness. For example, one of the biggest myths in LTL shipping is that “the more you ship, the better your discount will be”. The truth is, with large, mega LTL shippers, once past a certain point of diminishing returns, the volume becomes a much smaller factor in determining rates. At this point, the best deals result from taking a deeper look at data, shipping characteristics, and determining how they match up against carrier cost drivers, network capacity and its own unique needs. Whether you’re looking to develop long-lasting strategic relationships with your LTL carriers or have a need to expand/contract your LTL carrier network, Green Mountain has a solution for you.
Let us help you prepare for the future. If you have any questions, or would like more information, please reach out to us at Green Mountain for a brief meeting where we can explain all our offerings.
Jim Badovinac
Vice President – LTL Solutions
Green Mountain
Vice President – LTL Solutions
Green Mountain
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