Freight RFP

Lower your freight spend in as little as six weeks

Shippers should renew their rates with carriers and brokers annually and possibly more frequently, depending on market conditions. Shippers can not only pay too much on a load, but they can also pay too little. This can easily be accomplished with a freight RFP that can be completed in about one month. Realize return on investment in just one quarter.

Consider a lane with a market rate of $1,700 but the shipper routinely offers it out at $1,400. They likely spend too much time attempting to secure a carrier and may also see frequent last-minute fall offs. This is due to a carrier having found a better paying load.

If a carrier doesn’t feel they are getting a fair rate, they will continue to look for another load. If they do find a better paying load, they will either give the load back or will no call/no show. The former leads to shippers paying inflated, same-day spot rates that can increase spend 30-50%. The latter, no call/no show, leads to late deliveries, unhappy customers, and likely increased freight spend, anyway.

Lane Cost Comparison

In the example below, the market rate is $1,000, however the shipper is consistently over-paying on the load. This could be occurring for a number of reasons. Below are just a few:

  1. No set rates in place with carriers and/or brokers
  2. Paying too much because they don’t know the market rate
  3. Paying too little in an effort to minimize freight spend

Tulsa, OK to St. Louis, MO (1x per Week):

Overpaying on just one lane can lead to inflated freight cost in excess of $10,000 annually.

Tulsa, OK to St. Louis, MO (4x per Week):

Let’s take the above example and assume the volume is four times a week instead of just one.

Imagine if this were happening on more than one lane, or dozens of lanes. Freight costs going up and down, like a boat at sea. If shippers have set rates in place that are in-line with the market (and if they stick to those rates), the savings can be enormous.

Conducting an annual freight RFP is the best way to ensure the rates being paid are in-line with the market. It also provides an opportunity for shippers to develop relationships with new carriers and brokers. A fresh start with a new routing guide and the confidence that their freight spend is under control.

We offer cradle-to-grave freight RFP service. Your transportation department can be involved as much or as little as desired.

How it Works:

  • Analyze the truckload lanes and volumes and determine what to include in the bid.
  • Communicate with carriers throughout the entire bid process.
  • Create a bid spreadsheet for each carrier to submit rates.
  • Conduct two rounds of bidding.
  • Provide each carrier confidential feedback on how their rates compared to other participants.
  • Communication with logistics team on which carriers will be/should be added as primary.
  • Create routing guide with backup carriers on each lane.
  • Pre-bid timeline of events.
  • 2-hours of post-bid consulting included.

If you would like to learn more about how a freight RFP could benefit your logistics department, please call us at 972-954-3388 or click here.