There comes a time during each freight bid when the full package (the shipping characteristics documents, fuel surcharge formulas, accessorial charge template, pricing instructions, carrier questionnaire, key milestone dates and data entry tools) is sent to a designated list of asset-based carriers and non-asset-based transportation providers.  At this stage, it is valuable to arrange a video conference call to explain the process and the bid expectations.  This is often followed by a Q & A period when the carriers can gain a fuller understanding of the bid.

After a designated number of days, the bids are submitted, and the shipper and/or consulting company analyzes the data and prepares their results summary.  There are often three elements to the bid analysis.

1. Analysis of the Questionnaire Responses
2. Analysis of the Bids
3. Interviews with a set of short-listed Carriers

In this blog I will provide an overview of first two sets of data analysis; in the next blog, I will focus on the carrier interview.

1. Analysis of the Carrier Questionnaire

Initially each carrier questionnaire should be scrutinized to see if there are any questions that were left unanswered.  A failure to provide a safety rating, a company’s OR, or the size of a company’s fleet, are telltale signs that the carrier has something to hide.  The carrier should be asked to provide any missing information.

The bid participants should then be ranked on how well they match against the shipper’ s requirements.  The questionnaire is a screening device.  Here are some key pieces of data that need to be extracted.

• Does the carrier have the assets and infrastructure to serve the account?
• Location of terminals, fleet and drivers
• Does the carrier’s service profile match the shipper’s requirements?
• Can they do 8 AM deliveries, weekend pickups, deliveries?
• If they provide specialized services (e.g. refrigerated LTL), what percent of their revenues are derived from this segment of their business?
• Days and hours when customer service is available.
• Will a dedicated and backup rep be assigned to service the account?
• Will these resources always be serving the account and its customers?
• Can the carrier supply a trailer pool, if required?
• Can they provide appointment pickups and deliveries?

Small well managed local fleets can do an exceptional job in specific markets, but small, undercapitalized, poorly managed fleets can create a vulnerability.

Performance Data

We live in a very competitive environment; a shipper’s carriers need to perform at a high level.

• Will your carriers meet the shippers’ standards in terms of On Time service %, Claims Ratio, Billing Accuracy?
• How long have they been in business?
• What has been their OR over the last 5 years?
• Have they been consistently profitable?

Data Supplied to Shippers

These are some of the questions for which you should be seeking answers.

• What types of reports can the carrier provide?
• Can the carrier customize the reports to the shipper’s needs?
• How is the shipper notified of potentially late deliveries?
• Will the shipper be supplied with a username and password so they can go into the carrier’s website at any time of the day or night, to check on shipment delivery statuses?

2. Rate and Capacity Analysis

This is the component of the analysis where the data is segregated by service (e.g. LTL, TL etc.).

Truckload

This is the location where all TL bids are ranked for all carriers on every lane.  State/province clusters should be analyzed to see how well each carrier can service a designated region.  The rankings should be related to fleet capacities to make an initial determination as to how each carrier can service specific geographical areas.  Similarly, all carriers should be evaluated based on total cost savings.

LTL

LTL data needs to be sorted by state/province and by region (e.g. NE USA, SW USA, NW USA, Atlantic Provinces etc.).  This analysis and the cost saving by LTL carrier help determine which companies can play a meaningful role in servicing a shipper’s freight.

Carrier Selection

Obtaining answers to these key questions can help a shipper select a group of carriers that can be eliminated from the bid and another set of carriers that should be interviewed in person.

• How many carriers are required to service specific geographic areas?
• Do these carriers have enough equipment to meet our needs?
• How do I best leverage our volumes (e.g. state, region)?
• Since carriers go out of business (e.g. Roadway, CF, Yellow) or have capacity limitations, how many backup carriers should a shipper utilize to keep them engaged and interested?

Completing this exercise allows shippers to invite a meaningful number of carriers to the important personal interview process.

To stay up to date on Best Practices in Freight Management, follow me on X (formerly Twitter) @DanGoodwill and join the Freight Management Best Practices group on LinkedIn. If you are looking for ways to improve the effectiveness of your freight management processes or to save money on freight, contact me at dan@dantranscon.com.