With the 2021 peak season, RFP and modern supply chain management remains essential today in the shipping and transportation market. The high priority focus on RFPs and carrier network optimization will continue to impact services and shipping protocols well into 2022 and beyond. On the heels of COVID-19, the fast-moving volatility of current market trends and customer demands make shipping, planning, and logistics more critical than ever. According to the Journal of Commerce: "In the early days of the pandemic, March through May, UPS and FedEx reported B2C volumes represented 70 percent of total ground volumes. As businesses reopened during the summer, B2C volumes remained high as a percentage of total ground volumes, declining only to 61 percent for UPS during the third quarter" of 2020. The global effects of the pandemic created a sudden shift in small parcel volumes and caused an accelerated shift in parcel types, shipping modes, product demands, and transportation service availability. Strong RFP supply chain management practices and carrier network optimization services will allow for continued growth and success in the modern supply chain and freight shipping network. It's important to understand the full scope of optimization, including what it is and how your team can improve it.
The heart and soul of a successful transportation company is its ability to master carrier network optimization across the board. Carrier contract optimization essentially focuses on transportation carrier collaboration. With an optimized carrier pool, shippers can more easily find a suitable carrier for every load. From standard packaging to oversized loads to hazardous materials and more, having ample options to choose from makes it easier to match loads to carriers and get shipments on the road. As part of the consideration of network optimization and RFP logistics, carrier partnerships and collaboration go a long way in preserving effective shipment services daily.
As addressed by a Ryder report, published by SupplyChainBrain, "a company that relies on trucks to deliver its products over the road is only as strong and efficient as its transportation network. … By continuously evaluating your transportation network and analyzing opportunities for optimization, you can achieve [increased] success." Basic data that can be gained from RFP tracking and monitoring include the following:
While RFP supply chain management is an ongoing concern for shippers, the annual process of submitting bids and establishing new carrier and shipper contracts must also be carefully considered. As pointed out by Forbes, "A truly optimized transportation network means it is flexible enough to adapt with your company's strategy, changing needs, and a variety of constraints and variables. It takes advantage of all available mode options to deliver the lowest possible cost while providing visibility and reliability every step of the way." The process can become very involved and complicated, and often, to get the flexibility required, many shippers should opt to not conduct an annual RFP and instead utilize data and analytics to procure capacity and rates. However, should an RFP arise, these nine points must be included during annual RFP processes:
Tracking on-time shipping performance and keeping up with carrier performance and RFP expectations for all involved parties remains a vital part of carrier network optimization and optimizing the network for parcel, LTL, and Truckload freight transportation. This all requires the following points to be carefully monitored regularly:
With new technologies becoming available, consumer demands constantly shifting, and new shipping and transportation services coming into the market, it is only a matter of time until new RFPs are needed in order to keep up. Carriers and shippers alike will need to adapt to new processes and embrace new tools to continue meeting consumer needs. The following steps can make the process more manageable during RFP seasons:
Short-term and long-term RFP supply chain management, along with logistics RFP coordination services, will hinge upon each party's ability to negotiate and embrace available tools. Keeping up with expectations and ensuring open communication and collaboration exist is key to maintaining mutually beneficial partnerships between carriers and shippers. The following steps can make the process easier for the daily monitoring of the carrier-shipper relationship:
Maximizing carrier network optimization is another crucial aspect of the shipper-carrier relationship that needs careful monitoring. This is knowing when to send new RFPs and contact carriers for mini-bids or short-term changes in demand and rates. General rate increases are expected, and a great deal of fluctuation occurs within the supply chain network and the transportation market. Basing RFPs and contractual terms on current rates and fees can provide a better rate for both parties and help shippers and carriers collaborate easily and maintain optimal capacity levels, regardless of market volatility. RFP supply chain management relies heavily on optimizing parcel, LTL, and Truckload freight transportation networks.
Shipper and carrier contracts can vary significantly depending on market, freight loads, and company specifics. However, all parcel, LTL, and truckload shipping options rely on supply chain data and current RFPs that generally include the following items:
All necessary details about billing and payment must be outlined, including payment due dates, late fees, surcharges, fuel costs, and other anticipated expenses and fees.
The bid contracts must include terms that deal with what happens when damages and losses occur during the transportation process and who holds responsibility for damages.
The best RFP contracts need to include info that deals with transportation safety and defines who ultimately will be responsible for safety in warehouses, trucks, and delivery locations.
Likewise, there needs to be a clause that will specify the maximum amount of liability that both carriers and shippers will be responsible for if any injuries or losses are sustained.
For high-level loads or specialty loads that are very valuable, delicate, hazardous or require specialized handling and transport, dispute resolutions may need to be addressed in the RFPs right off the bat.
A strong RFP needs to include a description of services that will be offered to customers and their expected costs. This can be outlined in a detailed list of services within the proposals.
While no one wants to think about ending a relationship in volatile markets, freight contracts that never expire can cause problems. Therefore, all RFPs are designed to allow renewal intervals.
Working with skilled and experienced carriers by developing solid RFPs can make it much easier to negotiate the best freight transportation rates and services. Logistics and RFP management are critical processes that can improve freight shipping and positively impact shipper and carrier networks.
For transportation providers and shippers, RFPs create opportunities for winning new business, growing revenue, and building customer relations and standing.However, deep inside all these quotes and paperwork is RFP data that make it easier to predict trends, direct decisions, allocate resources, shape strategies, expand shipping services, and increase success in the network.
Increased income, well-organized sales, and a higher customer loyalty rate are some benefits of improved RFP management. When done right, RFPs can bring about amazing changes, including better rates, easier access to capacity, and data-driven strategies, for the modern supply chain network. This is why constant monitoring and tracking are so vital for success within carrier network optimization and logistic RFP success for the short-term and long-term. With ongoing pressure for cost containment, greater transportation efficiency, on-time delivery performance, and high levels of customer service, strong collaboration between shippers and carriers is more important than ever. To maximize carrier network optimization and make the most out of transportation carrier-shipper collaborations, a new approach to freight transportation is needed. Contact Intelligent Audit today to learn more about advances in supply chain management and to improve RFPs for Parcel, LTL, and Truckload Freight shipping.
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