Requesting transportation bids through a logistics request for proposal (RFP) is a common and recurring practice for organizations that have high volume orders that ship on recurring freight lanes.
Some shippers invite transportation bids to be submitted once per year. Others ask for the process to be completed quarterly.
Either way you approach your logistics RFP, the logic is the same. Your organization wants to secure capacity for your moves and lock in consistent freight rates for months to come as the remainder of the market fluctuates.
But who should you invite to participate in your transportation bid mix?
Asset or Non-asset Logistics Provider for Transportation Bids
Historically, it has been typical for large shippers to focus heavily on contracting with direct asset-based carriers during their logistics RFP process.
But as the trucking industry has changed in recent years, drivers are more inclined to operate for small fleet carriers. These smaller mom-pop service providers and added sources of capacity are easily accessible through a brokerage, who functions to build a comprehensive network of carriers.
As a result, large shippers have begun to include more freight brokerages in their RFPs. And shippers that use freight brokers have found success by doing so.
Since this was not the norm for much of the past decade, there are several still-existing tropes and hesitations to add new brokers to a bid.
Below we detail why it is a good idea to rethink your old freight RFP strategy to include non-asset-based 3PLs, and what to take into consideration when choosing potential providers.
Why Shippers that Use Freight Brokers Have Found Success
You may be weary to include a broker because you have been burned in the past. But not all freight brokerages are created the same. Some stand on ethics and exist to serve their customers, not just maximize profit.
A quality freight brokerage can add tremendous value to your transportation mix and won’t leave freight on your dock. They can:
1 – Help you lock in new capacity for heavily traveled lanes. Asset-based providers are great for shipments in and out of major cities where they have terminals and back-hauls. But their capacity is limited. Brokers can offer up access to additional trucks that efficiently service those popular lanes, often at more competitive rates.
2 – Similarly, brokers can source their larger networks for capacity in obscure locations or for shipments with non-desirable delivery times. If you have lane that runs from Lexington, KY to Cheyenne, WY an asset-based carrier has much less incentive to take the shipment and their pricing will be reflective. With a large carrier base that extends to localities all over the country, a freight broker can book a variety of carriers for any lane your freight travels.
3 – Brokerage firms can offer your organization a nimble, flexible solution to complete freight moves that may slip through the cracks of an asset carrier’s operation. When markets shift and capacity fluctuates, a brokerage can help you access new resources and keep your freight in motion.
Including the Right Broker in Your Logistics RFP
How can you ensure you have the best mix of brokers included in your logistics RFP? As we stated before, not all are created equal. Some things to look out for:
1 – Don’t exclusively opt for the monster brokerages. Instead consider including smaller or specialized firms that will care more about your orders. You can often achieve higher service levels and better pricing when including boutique transportation providers. The business gained by that brokerage makes up a bigger piece of their customer pie and you will be treated as a priority.
2 – If it looks too good to be true, it probably is. All logistics RFP participants are working in the same market landscape. If someone is drastically under in their bid, they are likely overlooking a key detail about what it takes to move your freight. That cost likely doesn’t come with a real truck.
3 – Make sure the brokerages you add to your bid actually understand the needs of your freight. Retail deliveries aren’t the same as traditional over-the-road shipments. Does the brokerage you add to your bid have a network that can meet your needs? Bid responses that include quotes from carriers who cannot service your customer locations will not be of any use to you.
4 – Don’t overlook values. If you are locking in freight service for the year, you will want to ensure your new partner aligns with your larger organizational viewpoints, mission, and priorities.
5 – Do the brokers you add to your RFP offer additional value? The 3PLs you include should offer data-driven insights, market knowledge, order tracking capabilities, problem solving, and network consultation. Anyone can book a truck. You should expect more.
How Zipline Differs from Other Freight Brokerages
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.