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More RFP’S or RFQ’s In Freight Transportation

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Lately are hearing  this word more and more, some call it Request of Proposals (RFP) and some refer to it as Request of Quotes ( RFQ ). This time around I chose this topic in order to help sales executives to go through this challenging process . When anything increases in popularity , we tend to ask the same question: Why? So if you want, lets try to find out why we are hearing more about freight bids and why they are needed more often.

Every year is a different story or different situation as I have been in the industry of International Shipping and Transportation  for years, but there is one thing that always captures my attention. I’m always amazed at how the supply capacity in business and consumers’ demands get affected by the changes in the economy. What happens during a recession? As soon as the revenue shrinks, the demand in consumption also starts shrinking and immediately we see the business volume going down. As we all know low demands are a serious trigger effecting freight rates. We could actually put all blame on ” the cost ” issue. Just to lower the cost, ocean carriers starts chasing an opportunity to increase their ocean rates. Therefore, I believe it would not be wrong to say that ever since the recession, with the need of bringing the cost down, shippers or consignees would like to come up with even more RFQ’s now. I think the bids are certainly a great tool to find the best service partner who offers the best freight rates but conducting as many  RFQ’s for the same freight in the same year for the same trade lanes might be overwhelming at times.

As an international NVOCC’s or as a carrier, I believe we all understand that the purpose here is to secure competitive freight rates with a longer validity. In this article not only the rates but  I also would like to emphasize the other elements as well because as a participant while we all focus on obtaining the best freight rates we may overlook the other values we should offer as a service partner. If you want to be a winner, trust me there are factors we should all look into.

Apparently as a bid participant , we must analyze the importers or exporters’ service requirements and also logistical needs first . While some companies value the Online capabilities more, the others may value the level of customer service or the strength  of The Nvo’s financial resources . Therefore, as a good start, what are the important things then we need to do or the best practice we should have before we get invited for an RFQ?

You really must understand that as a sales person you need to meet with the importer or the exporter. Developing an open conversation to get to know about their requirements, to engage with them, to understand their expectations will absolutely put you on a different level especially from their perspective . We all know that targeted sales means to learn about the prospect more because eventually the goal is to make a long term commitment to them. Could you commit though without finding out what is important to them . Of course we all know the answer. Now then lets see what tools or sales instruments we could use before we are invited to the RFP.  You could continue making visits , sending emails or calling the prospect  but please watch very carefully the content or message you give them. Please make sure you are creative and dynamic when you pass information about your company. Remember that you are not the only one trying to win them over! So you have to show them why you are their perfect match.  Social media is huge so its another excellent sales instrument to connect with the prospect  . Networking through Linked in , Twitter or Facebook gives an advantage to identify who we are as a sales executive and also as a service provider .

Please remember that time has changed and its really not the quantity but the quality that counts . RFQ’s are naturally affected by this concept . What then are the qualities prospects look when conducting RfQ’s : Here are some solid expectations from a participant : Making sure the supplied data is accurate , is provided on time and complies with the outline of the RFQ . Besides the rates , we should also inform them about the variety of services we have , how customized or personalized our service could be, about the service areas we cover, about the relationships we have with important vendors , about financial strength , our online capabilities . All service providers may vary on size , company culture  or financial resources etc. Therefore, we have to prove to the prospects why they should select us by proposing as much value as we can .

In the end , we all know that prospects are after saving some percentage on freight cost. I am positive that there they may be some who conduct the Rfq’s just to keep their current forwarder or an NVOCC in line with their rates. I kind of agree with Mr.Michael Mclaughin who shared same thoughts in one of his article on mindshareconsulting.com . With all the complexion, I still think that you want to be the winner right.  Well then do not just fill the rate spreadsheet. Differentiate yourself and make sure you are not good but great in passing all those values you have for them. Now lots of luck , just like me  I am sure you will also need some….

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December 23, 2013 By Lora Altin Ozbilir

Comments

Comments
  • Nazrul December 30, 2013 at 11:17 am

    Hi Lora ,

    Your articles on Int`l. freight business will help professional development .

    Thanks .

    With Best Regards ,

    Nazrul – Bangladesh

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