For any logistics or supply chain manager dealing with international shipping, freight forwarding tenders is a large part of your job. This process is often tedious and time-consuming, yet freight forwarding tenders are a crucial part of the procurement process. These agreements need to be rigid so the initiation and management of shipments remain easy and efficient. They need some flexibility, however, so they can cope with the severe fluctuations that occur in global shipping from time to time.
An approach that combines rigidity and flexibility will help your tender secure reasonable rates. It also provides a framework within which an effective partnership can be developed with the newly-sourced freight forwarder. This is only one of many aspects you should consider implementing within your tender and tender process. Read on for our guide for logistics or supply chain managers when sourcing forwarders via the tender process.
Guide on freight forwarding tenders for logistics and supply chain managers
Know your requirements and clearly define your scope
The first step in putting together any tender is to know exactly what you need from delivery. Consider how the following applies to your organization:
- Cargo types, frequency and volume of your shipments
- Countries your shipments come from and to
- Duty and customs requirements
- Delivery schedules and budgets
- Customer service level and communication expectations
This information will assist you in differentiating between shippers, in considering their credentials and pricing.
Attractive freight forwarding tenders get responses
You are not the only logistics or supply chain manager tendering their international shipping. Reputable freight forwarders are often invited to tender. By clearly defining your scope, and keeping it simple and straightforward, you ensure your tender stands out and attracts the response you are after.
Research and invite freight forwarders that fit your needs
Freight forwarders need to know they have the ability to deliver what you are asking for. Put together a list of candidates and research their capabilities. Make sure the freight forwarders you are looking to invite actually fit your organization and your shipping tender profile. It is more efficient to invite 10 well-researched candidates than 100 forwarders listed in a directory.
Find candidates that align closely with scope
Learn and note the strengths of easy candidates that cover the broad aspects of your scope. Forwarders have shipping routes and geographical areas where their freight is the best-priced. They also have additional services that may apply to your scope or be of value. Don’t sell their amount of industrial experience short either. Experienced forwarders are often well versed at problem solving or dealing with sudden issues.
Aligning with what a forwarder does best will make it easier for them to integrate your new business into their current operation. Expanding upon what they already do will keep their pricing efficient, as they only need to scale with the increase of volume. Easily adding your new business will be a major factor in deciding if they will accept the invitation to tender and submit a compelling offer.
Ask about other features and do not focus only on price
Do not have your scope focus only on price and arranging shipping. Confirm what other features your invited freight forwarders can include in their offering. You can ask if they offer services such as:
- Providing freight management solutions
- Arranging warehousing, storage, and distribution
- Helping with shipping documentation and tracking
- Assisting with or providing customs clearance
- Providing technical support to shippers
Freight forwarding tenders that cover additional services allow the candidate to add value in their response. It will make them work harder to provide the best proposition for you.
Allow room for flexibility on your terms and conditions
Freight forwarding tenders are a contract to ship cargo at some future date. As all shippers know, the global maritime industry is dynamic and volatile. Your tender will need to allow for how market forces constantly add or change pricing and supplementary charges. Also, rigid delivery expectations need to be able to be relaxed when there are unexpected disruptions, such as workforce strikes at ports or natural disasters. Having this flexibility will keep your tender practical and attractive to forwarders.
Keep your candidate pool small and precise
Confirming that each and every candidate is suitable for your scope based on their publicly available information will keep your invite pool small and precise. This is because such research takes a level of effort.
Forwarders know their chances of winning any tender are not strong, so will only expend effort on those for which they are a good fit. They will home in on your tender if they can see you have checked their compatibility and confirmed they are a good fit for your requirements. The time you invest into this research will pay off by maximizing your chances of getting a quality result.
Signals to watch for during the tendering process
When freight forwarders tenders are under way, there are a few signals that will help indicate how a candidate may perform if they were to win and deliver to your scope.
Responsive and clear communications
An important signal to watch for is how responsive and supportive each of the candidates are during the tender process. Tender responses are time-consuming for everyone involved. You will naturally appreciate prompt responses and not having to follow up candidates.
Reputable forwarders aligned with your scope will be prepared and organized with shipping rates and contracts that can be easily adapted to make the response you need. They should be able to quickly identify aspects of your scope that are unclear, and promptly ask clear questions to get them resolved. Responsiveness such as this is a good signal.
Push a tight schedule to see who sticks to it
Run your tenders with a strict deadline to keep everyone, including the forwarder, motivated. For any tender it is disastrous if deadlines are not met, timeframes must be extended or put on hold for whatever reason. It is not a good buying signal for you or any of the candidates. Forwarders complying with the stated deadline are sending another good signal.
Willingness to negotiate when comparing offers
Once you have gathered the tender responses from your invited freight forwarders you must weigh up the differences between them. You then need to confer with each and negotiate the arrangement that meets your requirements. Another good signal is how candidates react to negotiating their offer when comparing offers. Forwarders open to this and handling such negotiations in a polite and professional manner are sending a positive signal.
We have a related article that has simple and effective methods for how to choose a freight forwarder.
Do you need more help with the freight forwarding tenders?
When it comes to finalizing freight forwarding tenders, it is best not to use price as your sole criterion for making your choice. Take into account such factors as service standard, integrity, dependability, adaptability, customer care and reactivity to change. Look for clarity and clear speech, credibility and reciprocal confidence in your association with the shipper. Make sure they handle themselves well when negotiating pricing, costs, time periods and durations, contractual terms and services to be provided. After all, your job is to get the most value for your money.
If you want some help setting up a freight forwarding tender, call us at 1-877-901-2004. We are happy to review and give feedback on how you have organized your requirements and scope. Follow our LinkedIn Company page. Otherwise, check out our freight updates for imports and exporters to find more on freight forwarding.
