Logistics process management requires constant review to reduce costs and optimize operations. Processes and partnerships with other suppliers must be reviewed in order to achieve lower costs, better communication and service levels.
In this context, the transport bid fits in as an important action to readjust contracts and partnerships. It is a way to consult the market and find the ideal logistics operators for your company's logistics operations, reducing costs/deadlines, in order to satisfy your customers and other partners.
However, this process requires care and attentive management. This insight seeks, in summary, to bring some points of attention and tips to keep in mind during the complex process of conducting a bid.
A bid can be divided into four main phases: Understanding the Operation, Drafting the Notice, Conducting the Bid and Selecting the Winners. Each phase is crucial to ensure the selection of the most appropriate logistics solution for the company's operation and it is important to understand that some of these phases can occur in parallel and do not necessarily depend on the completion of the previous phase.
- Understanding the Operation
The initial step in conducting a transportation bid is to understand the company’s current operations. Once the current scenario is understood, it is important to ask whether it is the one that will be “bidded/quoted” or whether there are already operational changes that need to be reflected in the bid notice. This understanding is essential to identify specific needs and areas for improvement. Analyzing the efficiency, cost and capacity of the existing operation in relation to the quoted proposal helps define the criteria for supplier selection. This detailed knowledge allows the company to align its expectations and needs with potential suppliers.
- Bid Driving
The phase we call bid management can be initiated in parallel with understanding the operation, given that the construction of a long-list and the sending of an interest questionnaire do not require detailed mapping of the transport operation.
This phase begins with sending an interest questionnaire to potential partners, assessing their capacity and willingness to participate. This questionnaire helps to filter suppliers that meet the basic capacity and compatibility criteria. With this list already filtered, sending NDAs for signature is only necessary for a smaller universe of logistics operators.
During this phase, maintaining ongoing and transparent communication is essential, which can be challenging given the high volume of data and contacts involved in the bid. To achieve this, it is important to use the appropriate platforms and communication channels for a bid process. A clear and well-defined schedule for sending questions from competitors, submitting proposals and reviewing them is also essential.
- Preparation of the Notice
The preparation of the notice is a critical phase, as it defines the requirements and expectations of the transportation service to be contracted. Providing all necessary information (such as route volume, average dropsize, expected delivery time, seasonality, among others) allows suppliers to prepare competitive and realistic proposals. In addition, it is important to make very clear the pricing driver of the rate to be filled by suppliers (R$/trip, R$/delivery, R$/kg, among others).
Some important considerations in the process of constructing the notice include:
- Specifics and Standardization of Logistics Services: Ensure clarity in technical and operational specifications to avoid ambiguities. Does the quoted service require the supplier to load and unload the vehicle? Will some type of cargo treatment be required (repalletizing, repackaging, etc.)? Will the supplier need to schedule delivery with the customer who will receive the cargo?
- Net vs. Gross Values: Clearly specify the price structure, distinguishing between net freight and gross freight, to ensure that all competitors are quoting under the same premises.
- Additional Costs (GRIS/ADV): Include fees such as GRIS (Risk Management) and ADV (Ad Valorem) to cover risks and insurance, ensuring realistic pricing.
- Draft Contract: Prepare a draft contract, addressing points such as payment terms and adjustment basket, which protect both parties against economic variations.
- Winner Selection
The selection of the winners involves a careful analysis of the proposals received, considering several factors, such as costs, deadlines and service capacity. It is crucial to decide between hiring a dedicated carrier or a pool of carriers, depending on the volume of transport and the flexibility required for the operation. A dedicated carrier can offer a more personalized and controlled service, while a pool of carriers can provide greater flexibility and responsiveness to variations in demand.
Once selected, the implementation of the service must be carefully planned. This step involves coordination between the company and the chosen suppliers to ensure a smooth and efficient transition. During negotiations with the finalists, it may be useful to conduct on-site visits to their operations to gain a deeper understanding of the potential partners’ operations.
Conclusion
Conducting a transportation bid is a complex process that requires detailed planning and clear communication at every stage. By following these steps, companies can ensure that they select the best logistics partners, optimizing their operations and reducing costs. Through careful analysis and well-planned execution, it is possible to achieve an efficient logistics operation that is aligned with the company's strategic needs.
Want to understand more about how to conduct an efficient transportation bid? ILOS has experience in this type of project and can help you.
