Bid season is approaching and completing a request for quote (RFQ) is common among large CPG shippers. Especially those with high volume, frequently run freight lanes.
Because of the turbulence in the freight market over the past year due to the COVID-19 pandemic, many brands are rethinking how to run their bids. If your organization has not included third-party logistics providers in the past, this year could be a great opportunity to do so.
The goal of conducting the freight bid process is securing capacity and stabilizing pricing for orders throughout the year. This strategy directly contrasts with quoting every order as it becomes ready to ship, which will subject your operation to freight market pricing and capacity fluctuations.
When it comes time to send out your logistics RFQs, who should you include in the process?
Who to Include in Your Logistics RFQ
Depending on your organization’s preference, the logistics RFQ process may be conducted once per year or every quarter.
In the past, many shippers have chosen to focus their transportation RFPs solely on asset-based carriers. Despite the precedence, this can detract from the success of your bid process.
Because of industry changes, truck drivers have begun to work with smaller fleet carriers with more regularity. These service providers can cover lanes not commonly traversed by larger operations. The best way to source this capacity is to work with a non-asset-based third-party logistics provider.
These third-party service operations should have extensive networks, which can grant your organization access to smaller, niche carriers specializing in specific lanes.
Among other benefits, working with a variety of carriers through a third-party logistics provider can add substantial freight savings and efficiency. Let’s see what else you can gain by including 3PLs in this year’s bid process.
Asset-Based vs. Non-Asset-Based Providers in Your Logistics RFQ
Shippers sometimes have been wary of working with 3PLs in the past. However, as commerce continues to demand specialization, third-party providers have become a valuable source of efficiency and savings in logistics.
A good non-asset-based third-party provider can:
Find You Additional Capacity for Common Freight Lanes
Asset-based providers will often cover shipments on heavily traversed lanes when they have terminals set-up in destination cities.
However, their capacity is often dependent on whether the shipment fits into their operation. If a particular order does not, you may pay a premium or may have service issues. A non-asset-based provider does not have these same limitations and can find additional trucks for popular lanes, often at a more competitive rate.
Cover Infrequent Lanes
A non-asset-based provider can also help you find a capable carrier for more out-of-the-way freight. If you have a lane that runs from Lexington, KY to Cheyenne, WY an asset-based carrier has much less incentive to take the shipment. As a result, these moves will often be pricier to compensate for an out of network delivery. However, a non-asset-based provider has a more diverse carrier base and can find cost-effective capacity for infrequently traveled lanes.
Help to Build Supply Chain Flexibility
A non-asset-based provider can help your organization build an agile, flexible supply chain by finding solutions for freight moves that slip through the cracks of an asset carrier’s operation. When markets shift and capacity fluctuates, a non-asset-based provider can help you access new resources and keep your freight moving.
Benefits of Working with the Right Third-Party Logistics Provider
Including and subsequently working with a third-party logistics provider is a sound decision of shippers that conduct bids.
In addition to finding previously untapped capacity, the right third-party providers can add value to your organization.
When building a relationship with a true logistics partner, you can expect:
Higher Customer Service Levels
A sign of a quality third-party provider comes in their commitment to customer service. Although not as commonly found at large brokerages, smaller providers committed to customer service can devote more attention to your freight. This attention to detail and care about individual orders translates to more successful deliveries. It can also help mitigate service exceptions if they arise.
The rate you receive on a given lane says a lot more about a 3PL than it may seem. All logistics RFQ participants are working in the same freight market. If a firm drastically underbids others, they could be overlooking a key detail about what it takes to move your freight or cannot honor the rate when it comes time to complete the order. Though not always the case, these scenarios often occur.
Increased Efficiency through Specialization
A 3PL that specializes in your industry is typically far better equipped to handle your orders in an efficient, cost-effective manner. CPG products going to retail customers require a much higher level of logistics service than industrial freight does. It takes a retail-specialized logistics partner to solve common delivery issues like OTIF or MABD requirements consistently.
By working with a partner that utilizes data-driven insights, market knowledge, order-tracking capabilities, critical thinking skills, and operational efficiency programs, you can ensure that you are set-up to meet the modern retail supply chain’s demands.
How Zipline Logistics Can Help You Excel
Zipline Logistics specializes in CPG product transportation that meets the rigorous compliance standards set by retailers. As the only Top 100 3PL to specialize in consumer goods, Zipline offers the same buying power and capabilities as a big-box brokerage but with niche expertise and personalized service only available from a boutique provider
As retail logistics experts, we can give your organization a competitive advantage over other 3PLs.