Freight Bidding Season and Transportation Sourcing Events

The new year and Q1 is one of the most popular times of the year for annual transportation sourcing events. As shippers evaluate their costs and determine their budgets for the upcoming fiscal year, carriers across the country are looking for contract opportunities and preparing to submit bids (if they haven’t already).

Freight bidding during this time of year can be both highly competitive and complicated. From the shippers’ end, they have to consider a number of different factors such as the carrier’s reliability, cost and capacity when choosing from different carrier bids. Carriers, on the other hand, have to spend considerable time obtaining requests for proposals (RFPs) and actually writing out and submitting the bids, in addition to considering other factors like risk and profitability.

Preparing for sourcing events and putting together freight bids can be a stressful experience for carriers. And that stress can be made even worse when that effort doesn’t result in them winning a bid. Shippers understandably have to be selective, which is why we’ll explain below how carriers can prepare beforehand to set themselves up for success for freight bidding season.

The Freight Bidding Process

If you’re reading this at the beginning of the year, there’s a chance that you’ve already received an RFP for an annual contract. This differs from other types of bids, such as mini bids (which is a simplified RFP that shippers send out for more competitive rates when the market shifts) and spot rates (which is a single-occasion bid for a fixed rate).

Shippers tend to send out RFPs for annual contracts toward the end of the year, when contracts are expiring and companies start to look at their finances for the next fiscal year. They’ll have to go through dozens or even hundreds of RFPs during this time of year, and they’re only becoming more complex as they look to optimize their transportation networks and reduce costs.

When carriers go to create their bids, they have to keep a few things in mind to ensure that they put themselves in position to win a bid while strengthening their bottom lines.

5 Freight Bidding Tips

Stay updated on current market conditions – Things like spot rates can change weekly, so it’s imperative that carriers gather information on both current and historical costs prior to submitting their bids. Shippers will have the latest technology at their disposal to structure their RFPs, which is exactly why carriers should as well. You can utilize established load boards and other types of software to gather information.
Develop a bid strategy – Not every bid opportunity that reaches your company will be the right one. Maybe you have certain lanes that haven’t been as successful for your company, or maybe there are lessons that you can take away from last year’s bidding season. That’s why it’s important to talk to your team members and get their input. This can help your company develop a strategy that puts your company in the best position possible.
Know the weight and size requirements – It’s critical for carriers to ensure their bids are as accurate as possible, so that they can work within the limits of their contract. Shipments that are too heavy or won’t fit on your truck will create significant problems. Make sure your company understands the size and weight requirements associated with the shipment to avoid any potential issues that will cause you to lose a bid or impact your company’s ability to deliver freight safely and on time.
Understand your routes – Plan your routes as well as you can from the origin point to the final destination to help your team estimate fuel costs and any potential wear and tear your truck might endure along the way. Having this information will allow your company to offer a rate that factors in these expenses.
Learn your competitors’ rates and strategies – You’ll most likely be in competition with other carriers and freight brokers during the bid process, and you can bet they’ll be conducting research on your company as well. Even better, perform this research year-round so that your company is better prepared when you start receiving an influx of RFPs at the start of freight bidding season.

What to Know for Transportation Sourcing Events

The start of a new year is also the time when many of the shippers who’ve sent RFPs will be participating in transportation sourcing events. These events are a more streamlined way for shippers to meet with multiple vendors competing for their business and compare options, often ensuring they get lower rates in the process.

For carriers, it’s important to remember that it can take multiple bid cycles to build trust with shippers you don’t have a pre-existing relationship with. While price point and fees certainly will play a large role in whether or not your bid is accepted, reputation and experience will often take priority. The best way to separate yourself from the competition is to highlight what makes your company unique in these instances.

When you have the opportunity to meet face-to-face with shippers, be sure to highlight your differentiators whether they be experience, technology, services, specialties and more. Also, don’t be afraid to use client testimonials in your freight bid to show how you’ve helped similar clients.

The bid process can be an incredibly stressful one for both shippers and carriers alike, and there’s a chance your bid may be rejected. In these instances, it’s important to not get discouraged. There are always going to be shippers that need to have their freight moved, and these events are a great way to network as well. Make a solid impression during these events, and there’s a chance that shippers may become clients throughout the year or during upcoming freight bidding seasons.