Should you tender your freight transportation requirements and if so how do you generate a RFP to cover this vital piece of your business? Like it or not your transportation service provider is an arm or is part of your business. Picking the right vendor to move your product to and from your business should garner more attention from the purchasing department than what it typically does.

Many organizations just go with the company that has always managed their freight and often very little due diligence has been completed to determine the most suitable carrier for their business. Poor quality service for incoming freight can hurt or shutdown your business if it is not delivered on time and in one piece. If your goods are sensitive to the environment you will want to do everything you can to mitigate liabilities and show due diligence in the event you are included in a legal battle as to who was and is responsible for the goods while in transit. Good article here on FOB Points.

On our arterial roads and highways, the trucking industry moves million of tons of merchandise daily. It is truly one of the largest and most important industries to our economy. The scope or significance of this industry is staggering and yet many companies do not give it a second thought or serious consideration when it comes to who they should partner with. Part of this might be the buyers uncertainty on how to tender or quote this service.

To properly quote your freight requirements your RFP should include a section which provides the bidders a good picture of the amount and type of freight you move in any given year or twelve (12) month period.

EXAMPLE:

The estimated annual LTL (Less than Truckload) tonnage is approximately one million pounds (1,000,000) and it includes inbound and outbound interstate and intrastate shipments.

The Following is a historical comparison of volume of freight shipped for the last four years:

2009      – 1,137,476 lbs.

2010      – 1,001,635 lbs.

2011      – 1,200,586 lbs.

2012      – 1,004,524 lbs.

The tonnage noted in this RFP is not a guarantee of a specific number of shipments or total volume. The Shipper does not guarantee to ship any specific number of LTL shipments, i.e., no minimum annual volume.

The above is a good way to present your requirements to the trucking firms bidding on your needs and finishing it up with a disclaimer on your trucking volume is prudent. Who can guarantee future shipment volumes?

Some other areas to focus on when generating your request for quote or RFP for Freight Services:

1. Ask for their coverage areas. Smaller companies interline. It is prudent to understand how often your shipments are handled.

2. Business History. Are they new or have they been established for years?

3. Attain a copy of emergency plans, safety records and driver certifications.

4. How often do they have damage claims and what is the total dollar value of these claims in the last twelve (12) months?

5. Insurance – both liability and worker. Is the dollar value or liability coverage high enough…run it by your risk assessment officer.

There are many areas you should visit as part of your quotation process and if time is of the essence we have got your back. The complete version or sample template for our RFP for LTL services is available in our Purchasing Manager’s or Mega Packs.

Filed under: RFP - Request for Proposal

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