As a purchasing, logistics, or operations manager dealing with regular transport of goods in bulk, you have to set robust freight procurement plans for your business. The ability to efficiently procure the right transportation at the right price can make the difference between profit and loss, timely delivery, and frustrating delays.
This article offers practical tips to help you streamline your procurement strategy, cut through the clutter, and bring more stability to your operations.
1. Streamline the RFP process
Sending out a Request for Proposal (RFP) often feels like casting a net and hoping for the best catch. But what if you could improve your odds, ensuring that each request yields quality bids that fit your needs?
Start by creating a standardized RFP template. Ensure that it covers all necessary details, from shipment volumes and frequency to service expectations and reporting requirements. This not only speeds up your process but also ensures carriers understand exactly what you're looking for.
Then, time the freight market. Some might argue that there's no perfect time to send out proposal requests. But, observing market dynamics can give you an edge. As much as possible, you will want to strike a balance between quality transport service and affordability. Periods of low demand might get you better rates, but also consider carrier availability and peak seasons.
Once the proposals start coming in, have a systematic approach to evaluation. Develop a scoring system based on your key criteria – it could be contract rates, service levels, or carrier performance. This makes the selection process unbiased, so you're not comparing apples to oranges.
2. Organize your freight schedules
The timeline is a crucial factor in the entire freight procurement process. In fact, the days and times you target for freight procurement can significantly impact your rate and service delivery.
Having a predefined freight schedule can help in planning and avoiding last-minute scrambles. A set schedule provides predictability to both you and your carriers, allowing for better resource allocation.
There's no need to rely solely on spreadsheets. Several freight management systems allow you to create, adjust, and track schedules with ease. These tools provide real-time visibility, alerting you to potential conflicts or delays.
It also helps you to keep an open line of communication with your carriers. Sharing your schedules in advance can help them allocate resources better, ensuring your shipments get priority. Regular check-ins can also help in addressing potential issues before they escalate.
Regularly review your schedules to ensure they align with your current needs. This includes adjusting for seasonal demands, new routes, or changes in shipment volumes. Just as you'd factor in maintenance for machinery, account for downtimes in freight movements. This could be due to public holidays, carrier maintenance days, or external factors like strikes.
3. Build strategic relationships with shippers
Every logistics manager wants to make sure their transportation management is very cost-effective. But that doesn’t mean you should only go for the cheapest transport procurement services. You have to be strategic about choosing a logistics partner.
When looking at freight rates, consider factors like reliability, flexibility, and carrier performance records, especially if you want to establish long-term contracts. Sometimes, paying a premium for consistent service is a wiser long-term investment.
Ensure that your shippers feel comfortable bringing up concerns or suggesting improvements. Regular check-ins can also help in addressing potential issues before they escalate.
If there are ways your organization can support a shipper's growth—either through referrals, joint marketing, or even technological collaborations—explore them. A shipper that grows with you is more likely to prioritize your needs.
GoRamp's contract management solution handles everything from rate management to pricing optimization and cost savings, so you can have the most profitable transport management solution.
4. Provide all the necessary details to the provider
When coordinating freight movements, clear communication is very important for your shippers to deliver good service. Clearly outline your shipment size, weight, and type. Does the shipment need temperature control? Should it be kept away from other goods due to contamination risks?
Whether it's perishable goods, machinery, or hazardous materials, specific handling or equipment might be required.
Be precise about details on loading docks, warehouse locations, and delivery points to prevent delays. If there are specific time windows for pick-ups or deliveries, communicate these upfront. This is very important, especially for international shipments where you need customs paperwork and special regulatory permits.
And finally, provide contact details of key personnel at both the origin and destination. In case of any challenges or queries, the shippers shouldn’t be left searching for whom to call.
5. Prepare a contingency plan
As unexpected and unforeseen circumstances are inevitable, it’s best to set a contingency plan in place for your freight procurement process.
Start by identifying potential threats to your freight operations. This could be internal – like system failures, or external – such as strikes or natural disasters. Then, prepare a routing guide to help you identify alternative transportation methods or pathways to have a plan B for crucial routes.
If you have the means, you can also source for alternative freight procurement solutions so you don’t put all your eggs in one basket. This way, you're less vulnerable to disruptions if a particular carrier faces issues.
Another way to stay prepared is by stockpiling essential goods. For critical components or products, consider maintaining a buffer stock. This can bridge the gap during short-term disruptions and prevent operational standstill. For instance, bulk goods can be temporarily stored in totes or drums on certain premises during emergencies until the situation is resolved.
When something goes wrong, or there’s a sudden interruption, you know exactly what to do, what resources to use, and what service provider to contact.
Optimize your supply chain with digital freight procurement
Every decision, from selecting carriers to implementing technology, plays a pivotal role in shaping the efficiency, cost-effectiveness, and resilience of your logistics operations. Investing in the right tools can further optimize your supply chain management.
GoRamp has an extensive freight management solution with an easy-to-use interface that makes it easy to source freight forwarders and plan multiple shipments in a single place.
Book a 20-minute call to see the solution work in real time.