February 28, 2019
3 Things to Ask in a Freight Forwarding RFP
Request for Proposal (RFP) season is fast approaching, which means that whether you’re running a formal process or just exploring new options, freight forwarders are going to start competing for your business. You’ll get to compare the best rates and services they have to offer. But it also means that some forwarders will present you with seemingly attractive offers just to sell you on price. If you’re using RFPs to find the freight forwarder that’s the best fit for your business, keep the following tips in mind to run a process that helps ensure you get the most value from your partner, not just the lowest cost.
__1. Ask for transparency. __
Some forwarders may provide you with a number that looks good on paper, only for you to discover later on that it’s not encompassing of several additional fees, or that it only applies to one type of service. Provide forwarders with a comprehensive rate sheet so you know before you commit what fees are and aren’t included in the base freight rate (we have a template available).
Also, ask how market conditional fees, like fuel surcharge (FSC) or bunker adjustment (BAF), will affect the rates, so you’re not surprised by them later on. Find out what rates are specific to which trade lanes, or if any shipment volume or dimension specifications apply. Then, once you have selected rates, make sure they’re binding and you’ll be able to compare the rates listed on an invoice to the rates listed in the RFP. Know that price doesn’t always come with a space commitment; always ask for transparent KPIs and specific mutual commitments. Ask what would happen if you shipped more or less than your weekly allocations, and how much free time is included.
2. Ask about their differentiating products.
When you’re getting specific on rates, you’ll be inquiring what price secures which kind of service or space guarantee. But you’ll also want to ask about their differentiating products and services. For example, do they have access to premium services, or do they offer any innovative and freight products? Are they developing any relationships or products that may be beneficial to your business in the future?
And apart from freight services, does their technology platform offer any unique capabilities? Look into how much visibility you’ll have into your shipments, or whether API or EDI integrations might be helpful. Consider how data and analytics features might be necessary, or whether the platform can accommodate multiple user logins.
__3. Ask about their client satisfaction. __
In addition to reasonable rates and beneficial services, look for reliable and accommodating customer service in your freight forwarder. They should be prepared to deal with market disruptions like a carrier bankruptcies or new environmental regulations, communicating to you and offering alternative solutions. Ask about account management, how their teams are structured, and what international presence they have.
Research your options and look at their Net Promoter (NPS) scores. Whether a freight forwarder conducts NPS or other customer satisfaction surveys is a good indicator of whether they’re invested in receiving and reacting to feedback. You should also consider asking about client references.
Finding a collaborative freight forwarder who can help grow your business is key. But there are thousands of freight forwarders to choose from, with the largest company owning less than 3% of global ocean market share. So if you’re using RFPs, run a value-driven one to narrow them down and find the best partner for your business.
To learn more tips on how to manage your Freight Forwarding RFP, sign up for our webinar “Running a Value-Drive RFP” to hear tips from our experts on ways to structure your bid process to find the best partner for your needs.