Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Posted by on in Freight Bids
  • Font size: Larger Smaller
  • Hits: 284
  • Print

Get your “House in Order” Before Conducting a Freight Bid



One of the most frequent complaints I hear from carriers, in person, on social media, or at conferences, is about the number and quality of freight bids that they receive. Carriers complain about the poor quality of the data, the number of carriers in the bid, and about the lack of professionalism in the bid process. They also assert that if the shipper would just meet with them face to face, rather than through a bid process, the result would be more successful for both parties and would take a lot less time, money and effort.

My company has designed and executed many successful bids over the past fourteen years. We have learned that for many shippers, success comes from getting “your house in order” before executing the bid. This is what is involved.

Many shippers have been moving the same freight, to the same consignees, using the same processes, for several years. In their haste to put their freight out for bid, they overlook certain aspects of their business.

A company's product portfolio evolves over time.  New products are introduced as old ones are retired. Miniaturization and packaging changes can have significant impacts on freight densities, and as a by-product, freight rates.  It is essential for shippers to obtain precise calculations of updated product densities before launching a bid exercise.

Businesses change over time. New divisions are added while others may be closed or sold. This may alter freight flows.  Some companies overlook the opportunity to merge their freight with their new sister or acquired divisions to improve their negotiating leverage. In other cases, new pool or consolidation points may evolve.

We sometimes find companies that experience a deterioration in their business volumes. Poor economic or competitive conditions may reduce shipping volumes and leverage. This can necessitate combining volumes with competitive shippers, forming industry associations or taking other creative approaches to make their freight more attractive to carriers.

Shippers should also look at their order fulfillment processes and cycle times. Some consignees may be able to provide more lead time on their orders if you ask them. This can allow for combining daily LTL orders into larger shipment sizes and moving them on designated days.

In other cases, intermodal transportation, in some areas, may be an effective option to over the road service, at a significant savings.  For certain Canadian-based companies, they may be able to arrange direct shipping of their products from their US vendors to their Canadian consignees, by-passing their Canadian warehouses in some instances, and reducing cross-docking, re-handling, and line haul costs.

It is critical to identify and implement these efficiencies before conducting a bid. These operational changes will translate into even bigger savings after the bid has been conducted. If necessary, delay the launch of the bid until these changes are made. Keep in mind that your carriers’ rates are tied to freight volumes on specific corridors. If you make these changes after the bid, you run the risk that the carriers will come back and ask for a renegotiation of the rates.

Shippers also need to get their data in order before conducting bid. It is essential that the carriers in the bid be supplied with accurate data upon which they can base their rates. The data should be cleansed to remove errors in weights; the volumes in certain lanes should be corrected to reflect new customers added during the year and the loss of some old ones.

Two other areas to look at are production and inventory management processes. For some shippers, these may be delicate issues to raise with their supply chain partners. Nevertheless, if there are problems with production processes such that the company is required to make excessive use of expedited services, or if cramped warehouses force the company to move suboptimal shipment sizes, these translate into higher than necessary freight costs. Again, these items should be addressed, if possible, before executing the bid.

By making ongoing changes to a company’s supply chain, this ensures that the business is operating as efficiently as possible. By combining these changes with a well organized FRP process, shippers can maximize their savings. For more information on how to conduct a professional freight bid, check out my series of blogs on this topic ( ).


To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (



  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Tuesday, 22 August 2017

Most Recent Posts


Tag Cloud

Load Boards Microsoft the future of transportation dimensional pricing Accessorial Charges Transportation MBA Freight Shuttle System Business Strategy Adrian Gonzalez future of freight industry FCA pipelines NS Shipper Fire Phone Colilers International Dedicated Trucking 360ideaspace Comey shipper-carrier roundtable shipper-carrier collaboration fuel surcharge University of Tennessee Muhammad Ali Celadon freight audit NMFC CN LCV's Rate per Mile Keystone Pipeline customer engagement Consulting freight forwarders Horizontal Supply Chain Collaboration NCC Truckload peak season cheap oil Canadian Transportation & Logistics Job satisfaction Transportation service Freight Rates BNSF Canadian truckers Otto Rail freight transportation broker security coaching freight transportation in 2011 e-commerce Canadian freight market Canada's global strategy Reshoring Whole Foods employee termination bulk shipping $75000 bond Politics RFP rail safety US Housing Market energy efficiency Carriers Facebook freight agreements Freight Management Ferromex Transcom Fleet Leasing Distribution Transport Capital Partners (TCP) Wal-Mart Canada-U.S. trade agreement YRC solutions provider freight RFP Freight driver shortages Regina Search engine optimization professional drivers freight rate increases Deferred Packaging shipping wine Tracy Matura Stephen Harper Trade Vision Sales Management CITA Shipper Pulse Survey derailments selling trucking companies dynamic pricing 2012 Transportation Business Strategies. Jugaad US Election Retail transportation FCPC FuelQuest Retail Trucking Outsourcing Sales UP routing guide trade Amazon Social Media Success failure entrepreneur truck drivers Doug Nix Training New Hires MPG Leadership Failure Rotman School of Business Freight Carriers Association of Canada Freight Capacity Spanx Dan Goodwill New York Times Global experience tanker cars financial management Twitter home delibery Entrepreneur CP Rail buying trucking companies David Tuttle Load broker LTL IANA KCS CSA network optimization Education online shopping hiring process Freight contracts consumer centric last mile delivery shipper-carrier contracts Infrastructure Business Transformation Strategy 2013 Economic Forecast Hudsons Bay Company CN Rail Training intermodal TMP Worldwide Career Advice Toronto Associates 2015 Economic Forecast CSA scores LinkedIn Emergent Strategy Harper Davos speech Map-21 Dedicated Contract Carriage robotics Werner economy Blogging freight cost savings US Economy freight transportation conference Loblaw Masters in Logistics 2014 economic forecast carrier conference FMCSA BlueGrace Logistics FMS 3PL Derek Singleton TransForce USA Truck capacity shortage Business skills Doug Davis Warehousing US Manufacturing Transloading freight payment Grocery APL Cleveland Cavaliers Management Yield Improvement 2014 freight volumes marketing trucking company acquisitions Transportation Buying Trends Survey CSX Swift driver Surety bond Driving for Profit Schneider Logistics Crisis management ProMiles Freight Matching economic forecasts for 2012 Canada U.S. trade automation Canada Packaging Trump Social Media in Transportation Sales Training transportation newspaper CRM Driver Shortage mentoring freight costs US Auto Sales ShipMax TMS Life Lessons Scott Monty Donald Trump Canadian economy Crude Oil by Rail President Obama business start-up home delivery Success Omni Channel freight broker 2014 freight forecast Bobby Harris Inbound Transportation Railway Association of Canada Transplace 3PLTL freight bid Conway drones transportation news EBOR small business Finance and Transportation Software Advice transportation audit Broker Freight Recession truck driver JB Hunt broker bonds autonomous vehicles NAFTA Global Transportation Hub Climate Change freight payment freight audit driverless shipping capacity shortages Right Shoring Sales

Blog Archives