If you’re looking to create a successful freight RFP in 2022, you’ve come to the right place. Creating such a detailed and important document can be challenging, but you can create RFPs and find carriers that can meet your needs and budget with thorough research and a proven strategy.
What Is an RFP (Request for Proposal)?
A request for proposal or RFP asks for transportation companies to provide you with detailed proposals on how they can meet your shipping needs. Essentially, an RFP helps shippers compare services and rates offered by different carriers.
An RFP also helps shippers set clear expectations regarding their looking for a shipping partner. While an RFP isn’t a binding or final document, it’s still important to ensure thoroughness and accuracy.
What Is an RFQ (Request for Quotation)?
Some people assume that an RFP is the same thing as an RFQ. However, that’s actually not the case. An RFQ is often a component of an RFP. Even so, an RFP can also stand on its own for more standardized services that don’t require a lot of planning or negotiation. For example, an RFQ is commonly used for spot freight services.
What Makes a Successful RFP Strategy?
While an RFP may seem like a pretty straightforward document, it actually requires quite a bit of strategy. Here’s what you can do to implement a successful RFP strategy for your business:
Make Sure That an RFP Is Necessary
For starters, you need to make sure that an RFP is actually necessary. In some cases, an RFP isn’t actually needed, and you could end up wasting your time. So when is an RFP necessary?
An RFP should be used for long-term projects. Generally speaking, you should not use an RFP for short-term projects that are less than one year in length because the effort it takes carriers to respond to an RFP needs to be worthwhile.
Work With a Team to Develop the RFP
A single person should not create an RFP. Instead, you need to work with a team to develop an RFP. Divide up the work to make sense based on employee workload and knowledge. Involve different departments, but make sure to designate a single point of contact to spearhead the effort, keep it on track, and answer any questions along the way.
Look Internally
When creating an RFP, you need to look internally and determine your needs. The best way to do this is to look at your existing shipment data. Take note of areas that could use improvement as well as specific priorities. Doing this research ahead of time will make writing the RFP easier.
Look Externally
It’s not enough to just consider internal factors when composing an RFP – you also need to look outward and evaluate the current state of the trucking industry — an industry that’s constantly changing. Check out truckload market statistics and forecasts and consider these facts and figures when drafting your RFP and reviewing your bids.
Prioritize Communication
Last but certainly not least, you need to prioritize communication throughout the RFP drafting and reviewing process. You need to communicate properly with your team to be on the same page and multiple viewpoints are considered. You need to communicate thoroughly with potential carriers about your needs, expectations, and timelines.
What Are the Components of an RFP?
RFPs tend to look different depending on your shipping needs. However, it’s still helpful to have a template to help guide you through creating your RFP. Here are some of the different components that you should consider including in your RFP:
1. Introduction
Begin the RFP by providing information about your company and the products you offer. Discuss where you operate and when your busy seasons are. Providing this information from the get-go ensures that you receive qualified and accurate bids.
2. Needs
Provide potential carriers with a brief outline that discusses your shipping needs and what you’re looking for. Every business is different, so it’s up to you to communicate your needs so that carriers can determine if they can meet your needs before submitting a bid.
3. Requirements
Spelling out your requirements right off the bat saves you a lot of time and effort by automatically eliminating any carriers that don’t meet these requirements. Be as detailed as possible so that everyone’s on the same page.
4. Pre-Qualification
It’s always a good idea to include a pre-qualification questionnaire in your RFP to ensure that you’re not just working with cost-effective carriers. You’re also working with reputable and qualified carriers.
What you put on your pre-qualification questionnaire is up to you, but you might want to consider asking about insurance coverage, registration, certifications, and safety records.
5. Terms and Conditions
State your terms and conditions in the RFP. Specifically, cover payment and billing terms, standard operating procedures, and contract terms.
Also, discuss on-time delivery requirements, on-time pickup requirements, and technology requirements. Note which terms and conditions are negotiable and which aren’t.
6. Scope of Work
This is by far the most important section of your RFP, which is why it’s important to include the following information for carriers to consider:
- Commodity types
- Cargo weight (average)
- Cargo value (average)
- Origin and destination zip and postal codes
- Freight volume
- Frequency of shipments
- Seasonality
7. Extras
Clearly state up-front any special shipping services you’re going to need in your RFP. For example, are you looking for after-hours deliveries? Stating these expectations ahead of time ensures that you get responses from carriers who meet your requirements. It also helps you avoid surprise extra costs later on.
8. Bid Template
Next, you should include a bid template in your RFP. Including a bid, the template makes it easy for carriers to include the information you’re looking for. It also makes it easy for you to get the information you need and decide.
9. Deadlines
You need to set multiple deadlines within your RFP. It’s always a good idea to set time aside for questions from carriers so that they can contact you before submitting their proposal. From there, you can set the deadline for the first-rate submission — making sure to give carriers enough time between both the opening date and the questions' due date.
You may also want to consider setting a feedback date to provide feedback to carriers based on their first submission. After that, set the due date for the second rate submission. Finally, make it clear when you plan on making your final decision.
10. Submission Process
Outline the submission process. Should you submit the RFP via email? If so, to which email address? Should they submit the RFP on your website? If so, what’s the URL? Choose a submission method that’s convenient for everyone.
11. Evaluation Criteria
Providing your evaluation criteria is beneficial for both parties. It’s helpful for the carrier to demonstrate why they’re the best person for the job. It’s beneficial for the shipper to provide relevant and actionable information to help make a final decision.
12. Key Performance Indicators (KPIs)
Finally, you need to ask for specific metrics to demonstrate the effectiveness of the carrier. List the key performance indicators (KPIs) you’re considering when making your decision. Focus on KPIs like on-time delivery rates, acceptance rates, and claims rates.
Conclusion
Based on this information, you’re well on your way toward developing a successful RFP strategy. In the meantime, if you’re looking for a simpler solution to your shipping needs, then you should reach out to RPM.
RPM is a top logistics provider in freight and vehicle transportation that handles thousands of shipments a day for diverse clients. RPM works to meet their needs, and we can meet yours too.
Contact RPM for a quote today.
Sources:
Request for Quote (RFQ) Definition | Investopedia
Four Key Stages to a Successful RFP Strategy | LinkedIn Pulse
The Ultimate RFP Checklist for Shippers: Essential Things to Include in Every Bid | Inbound Logistics
