Customers want to buy freight or negotiate their freight rates and issue a tender or an RFQ to a group of forwarders or carriers they’d like to take part in this process. This is clear and straightforward. The process behind it is less visible and finds itself deep in organizations where many stakeholders are involved yet few do the actual pricing and tender response work, they go mostly by the titles of tender managers, bid managers and pricing analysts. In many organizations they receive hundreds of tenders per year if not thousands and they all need to be analysed, clarified, priced, verified and sent back to the (potential) customer under time pressure.
Nowadays we see a big push for new tools and software in forwarder organizations as part of the digitization drive and it is no secret that forwarders have been behind in upgrading systems and processes. Typically in logistics, work has been and in many cases still is being solved by adding manpower. It is therefore no surprise that the people involved in responding to RFQ’s have to do that work without any significant tools which typically comes down to e-mail and Excel, sometimes Sharepoint and sometimes even an in-house built system.
Why should there be a system for tender management?
First of all shippers work of their own processes and standards which means there is no general standard which means that all tender documents received need a customized approach and analysis. This takes up a huge amount of time and is inefficient. Secondly, not all rates are stored centrally or are available and rates need to be requested from partners or from local colleagues. This means that the RFQ bid sheet needs to be cut up and sent to the right people, in forwarder organizations that can mean it will go to over 50 people around the globe. Obviously these quotes will come back and need validation and verification. Often they don’t get back in time which means chasing up of people. Often shippers send tender updates and this needs to be sent further into the organization as well. All the quotes eventually need to be merged back into the original file of the shipper and sent back, on time. Add internal calls, clarifications and discussions with internal stakeholders such as management, sales and account management and you understand this is a heavy process. Especially when you run 20 tenders or more at the same time which often happens.
If you can highly automate the tender management and response process you do not only save time but you gain visibility of the process, better understand how to quote and are faster to turn tenders around. Last but not least you create a better environment for the tender management staff as this work undoubtedly leads to stress and frustration and not many people last longer than 3 years as a pricing analyst because of it.
To conclude, the tender management processes in many organizations can hugely benefit from digitization in efficiency and in cost reduction as well. Although these costs are quite hidden as they can be scattered throughout the organization and within different P&L structures, it is estimated by some forwarders that the cost of responding to an Air or Ocean bid sits between € 10,000-€ 15,000.
At Freightender we started addressing this fascinating area of logistics in 2017 and we built a comprehensive platform to help forwarders manage this process faster and smarter. We are pleased to be a leader in this niche and are excited about how we can help tender managers on their digitization journey!