2 posts categorized "Web/Tech"

Revolutionizing the RFP Process with Data

By Shannon Vaillancourt | 12/08/2017 | 6:58 AM | Categories: Web/Tech

There are three letters that most logistics and transportation professionals dread: “RFP.” However, new software solutions that provide clean, accurate freight data are a huge step forward in making the carrier RFP process more efficient and effective.

Surviving the RFP Process

Most companies perform an annual or biannual Request for Proposal process with their carriers. This long and arduous process can take up to six months to complete. The process typically starts with gathering data from their freight payment provider or system. Then the user must clean the data to remove all the non-standard shipments, balance due bills or incorrect data. All this data is placed in a spreadsheet and sent to the carriers with a cover letter outlining the shipper’s timelines and service requirements.

Once the shipper receives the proposals from the carriers, they must manually compare each carrier’s rate to determine what they must do for the second round. After numerous emails, phone calls and face-to-face meetings with the carriers; the new rates are finally agreed upon. But it’s not over yet.

Now the second phase of the long and arduous process begins: loading the new rates into the TMS and publishing the new routing guide for their inbound vendors. After all of this is completed, the rest of the year is spent working on the lanes that were missed during the RFP.

The Risks of Poorly Prepared RFPs

For both shippers and carriers, there are numerous pain points involved in the RFP process. For the shippers, the most notable is the incredible amount of manual work they have to do to gather data, analyze proposals, load the final results and perform the post-bid support. For the carriers, it’s having to guess on what they are bidding due to the lack of transparency from the shipper. The carrier knows that the data is only an incomplete, abridged version of what actually happens during the year. These scenarios present significant financial implications for both parties.

In college, one of my electrical engineering professors used to say, “Two things can happen when a mistake is made: 1) People die; 2) Money is lost.” Luckily, we’re in the business where only money is lost, and that’s exactly what happens when the bid packages are prepared poorly. When RFPs are built on incorrect or incomplete data, there are three scenarios: Either the shipper is losing money, the carrier is losing money, or in some cases, they are both losing money. It’s the definition of a “lose-lose” situation.

The Benefits of Using Big Data to Improve the RFP Process

With the data available today and the software tools that exist in the market, outdated manual RFP processes are no longer needed. I’ve seen some systems that can provide full transparency to the carrier. This means that the bid package contains the exact lanes that they can service, along with a targeted price to win that lane. The benefits of clean, actionable freight data are many – and they can dramatically improve the financial and strategic performance of your logistics. Here are three of the most important benefits.

Transparency. Because both parties (the shipper and carrier) have accurate and real-time shipping and freight data, bids can reflect the actual costs for each party. This results in “win-win” situations where carriers take the freight that’s the most profitable for them while offering the best possible rates.

Meeting higher expectations. Data has changed both the shipper’s and the carrier’s expectations. Both expect that their data and RFPs should be more accurate. Shippers are realizing that leveraging a clean, standardized and normalized dataset in an automated fashion will allow them to be more accurate in their forecasting. Carriers are leveraging the data to be more efficient and optimize their loads, so they can maximize their profits while delivering the services that the shipper needs.

Revealing the hidden costs of freight. Access to more and better data in real time means shippers are now able to see the true cost of freight by accounting for the expense and opportunity costs associated with the integration to their carriers and data quality. While the freight cost may be slightly higher with a given carrier, if this carrier is able to integrate with the shipper and automate the tender process, the track and trace information and the settlement process, the shipper will be wise to choose them over a lower (freight) cost provider. In this example, the true cost is actually lower from the “higher priced” carrier.

Does Your TMS Allow You to Benefit from Automation?

By Shannon Vaillancourt | 10/05/2017 | 9:34 AM | Categories: Web/Tech

Even in the age of digital automation, there seem to be some tasks that shippers and their teams continue to do over and over again. I often talk to shippers that just spent millions of dollars to upgrade or implement their TMS only to have to put together a large staff of highly trained people to now manage the TMS. It seems that the TMS requires a lot of repetitive and manual actions to make it work—one of the things that a TMS is supposed to eliminate!

How Many People Does It Take to Run a TMS?

The number of people required for a TMS can be surprising. There is the person that has to manually update the fuel surcharge each week to ensure that their rates are correct. Then, there’s the person that has to resolve any exceptions that occurred during the planning phase. Typically, this means assigning the same carrier to the same types of shipments each and every day because the TMS had a glitch of some kind during the planning. Sometimes, a team of people has to send emails and make phone calls because the primary carrier rejected a load.

Once the TMS makes it through the sequential tendering, it gives up and forces the team to have to send an email or make a phone call. To save time, the shipper always calls the same carrier because they always have a truck for the given shipment. Finally, there’s the team of people constantly uploading and updating rates in the TMS because they continually find lanes they don’t have a rate for, which prevents them from tendering the freight to a carrier.

Leverage the Software Provider’s Expertise

If you’ve ever had to tender a shipment, then you know that it doesn’t always go perfectly and there should be easier more automated ways to handle the tactical exceptions. The shipper should be leveraging the expertise of their software provider to prevent these types of situations. We should all know that the carrier’s fuel surcharge changes each week, so should you really have to update the fuel surcharge manually?

If you are shopping for new software, or a new logistics consultant, there are a few questions you should ask to insure your new provider is a true partner that will help you benefit from the automation the TMS provides.

  1. First, I would ask what type of internal support is required by the shipper to maintain the system. Does the shipper need to hire a team of 20 people to operate the system and keep it working, or does the system take care of itself?
  2. Second, I would ask what the upgrade policy is. Does the system auto-update itself or do the updates have to be applied manually? Updates are a crucial part of logistics software because carrier rates and rules are constantly changing. In the ultra-dynamic world of shipping, your TMS should be taking care of variables for you, not the other way around.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Shannon Vaillancourt

Shannon Vaillancourt

Shannon Vaillancourt is president and founder of RateLinx. Launched in 2002, his data services and consulting firm provides a customized, end-to-end supply chain solution from order to payment. RateLinx's software suite integrates data from multiple streams in real time to create a data foundation that allows companies to have a complete and true picture of what is happening in their supply chains. Applying advanced analytics with the proprietary Logistics in 3D process, RateLinx helps businesses in a wide range of industries access intelligence from their integrated data. With increased visibility, they are solving even the most challenging supply chain problems while reducing overall costs.


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