RFP for LTL Freight Services:
Selecting a freight broker or transportation service provider is one of the most important decisions you will make for your organization.
Why? Because in the event orders are not delivered on-time you will have potentially lost a customer if you are a supplier and if you are a buyer you could be in for production delays which equate into profit loss. Like it or not freight shipping services can make or break your business and they are an integral part of the supply chain.
The Bureau of Transportation Statistics in the USA reported that the trucking and transportation market on a typical business day ships approximately 43 million tons of merchandise, valued at about $29 billion, moved almost 12 billion ton-miles on the nation’s interconnected transportation network. These statistics imply the significance this industry sector has in regards to transporting our goods. In fact, if it is shutdown for any period it can cripple a country and your business.
Designing a request for proposal for Less than Truckload (LTL) services might include some of the following details:
SAMPLE SCOPE OF WORK for your RFP for LTL Freight Services:
The estimated annual LTL tonnage is approximately _______________million pounds (_,000,000) including inbound, outbound interstate and intrastate shipments.
The Following is a historical comparison of volume of freight shipped for the last five years:
2006 – 1,899,820 lbs.
2007 – 2,237,577 lbs.
2008 – 2,43,635 lbs.
2009 – 2,911,596 lbs.
2010 – 2,879,598 lbs.
The stated tonnage in this RFP is not a guarantee of a specific number of shipments or total volume. The Shipper does not guarantee to ship any specific number of LTL shipments, i.e., no minimum annual volume.
The above scope of work provides your bidders a very good indication of expectation. From this they can determine the equipment, manpower and overhead required to service this contract if they were awarded the business. Providing historical data is an excellent way to estimate your anticipated shipments and as always provide a clear disclaimer about guarantees.
Other areas you might include in your RFP would be tracking capabilities, routing or coverage areas, specific details on their fleets, facilities and equipment. Ask about fleet size and ownership, do they sub-contract work (independents). This may not be a deciding factor but knowing whether an actual employee of the freight company or an independent contractor is transporting your goods is a fact you should be aware of.
When it comes to due diligence items, you might request a copy of their Spill Response Plan, Emergency Response Plan, do they employ a safety coordinator, safety records, insurance and damage claim history are good questions to clarify.
Related post – FOB Points go hand in hand when it comes to shipping freight services. To review our post on FOB Points please click HERE.