Gearing up for transportation tenders

Every week I meet both current customers and new businesses, but in one way or another, the topic of transport tenders always comes up. My conclusion from these discussions is that the procedure surrounding transport tenders is broadly the same regardless of which company or industry is concerned.

Your own know-how or help from consultants

In tenders my experience is that companies often employ logistics consultants to examine what the market has to offer and carriers as a first step. Then you will receive proposals for suitable carriers to deal with. Relying on a consultant can of course be good, especially an experienced one. But you can make a show of strength and get a stronger basis for coming decisions if you create your own lists in advance, and take control over what carriers have to offer, and then enlist the help of external expertise.

Important to note before a tendering process

What is so important to get answers to when you send out questionnaires to carriers or forwarding companies? I see two main areas, partly facts about the carrier and partly about IT capabilities. Of course you want answers to questions about shipping costs, the carrier's capacity, service levels and delivery assurance. But it is also of great value to get information about the level of IT maturity the carrier has, in order to assess the possibilities for integration related to tools, your own IT level and your development plans.

New powerful possibilities with system support for tenders

Today, there are different forms of systems support for contract tenders. For example, there is functionality to store your transport contracts and dispatch history in a single tool. Stored with that information is your data on what was sent, how much and the mode of transport used.

In a procurement process you just upload the bids from transporters and run them against your actual dispatch records for comparison. You’ll get an immediate and clear picture of what using these potential carriers would have cost. Furthermore, in addition to running historical data, you can run forecasts based on the contract proposals and new parameters, such as estimated changes in volume, weight or other cost drivers.

Using systems-based procurement and simulation, you get an entirely different basis for decisions, based on your own data, your own contracts and real numbers. With that in hand, you have a different starting position for your procurement process, or for giving an assignment to your external consultant. Utilizing the tools and data in this way strikes me as an innovative way to blow new life into transport procurements.

David Knape
Sales Manager
david.knape@primelog.com