Key Components for a Successful Carrier Partnership
When it comes to optimizing your Less-Than-Truckload (LTL) shipping strategy, the Request for Proposal (RFP) process is crucial. A well-prepared RFP not only helps you secure the best rates but also ensures that your chosen carrier fully understands your business needs, leading to smoother operations and better service.
Here are the key components needed for a successful RFP submission:
1. DATA, DATA, DATA!
Accurate and comprehensive data is the foundation of any successful LTL RFP.
To start, gather a minimum of 3-6 months of real shipment data from all your locations. This data should include every shipment, both inbound and outbound, as well as any third-party shipments for which you are responsible.
Essential data points include:
Origin and Destination: Where is your freight coming from and going to?
Freight Class and Weights: Ensure these are precise, as they directly affect pricing.
Dimensions and Special Services: If available, include the size of your shipments and note any special handling or services required.
Having this level of detail will allow carriers to provide more accurate quotes, reducing the risk of unexpected surcharges or service issues down the line.
2. Pictures
Visuals can speak volumes.
Include pictures of your freight as it appears when it’s ready for carrier pick-up—fully packaged and labeled. If your shipments vary in configuration, provide images of each setup.
This helps carriers unfamiliar with your freight better understand how to handle it, leading to more reliable service and fewer issues during transit.
3. Engagement Methods
Outline how you plan to interact with the carrier if they are selected.
Will you use a Transportation Management System (TMS) for electronic dispatching, or will you call in for pickups?
Will you require dropped trailers, or will pickups be on-demand?
Additionally, specify how you’ll receive the carrier’s bills—via mail, email, or Electronic Data Interchange (EDI). The more you can automate and streamline these processes, the better the carrier can manage your account.
4. Facility Overviews
Provide a detailed overview of each of your facilities, including:
Addresses: Exact location details for each site.
Dock Doors: The number of dock doors available for loading and unloading.
Pickup and Delivery Constraints: Any specific challenges or limitations at your facilities.
Again, including pictures here can be incredibly helpful, giving carriers a clear understanding of your operational environment.
5. Product Descriptions
Clearly describe what you ship and what you receive.
Provide full product descriptions along with pictures, and include the appropriate National Motor Freight Classification (NMFC) codes. This helps carriers classify your freight correctly, leading to more accurate pricing and fewer issues during transport.
6. Payment Terms
Your payment terms should be straightforward.
Clearly outline your expectations, whether it's Net 30, Net 60, or another arrangement. Clear communication on this front helps avoid any misunderstandings or delays in processing.
7. Pricing Considerations
Pricing is often the most complex part of an LTL RFP. Be sure to include:
Rate Base: Specify the rate base you want to use.
Fuel Surcharge Program: Outline the structure of the fuel surcharges.
Freight All Kinds (FAK) Parameters: Define any FAK agreements.
Rules Tariff and Concessions: Detail what rules tariff will be applied and any special concessions you need, such as discounts or minimum charges for different lane types (interstate, intrastate, direct, indirect, and cross-border).
While this process can seem daunting, especially on top of your daily responsibilities, partnering with a knowledgeable third-party logistics provider (3PL) can be invaluable. A 3PL can assist in gathering the necessary data, crafting a comprehensive RFP, and working closely with LTL carriers to maximize your savings.
Contact Revcon Logistics to learn more about how we can help your company create a successful LTL RFP that drives efficiency and cost savings.
Comments