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Prepare for an RFP in 4 Steps

As a large-scale shipper, you use a request for proposal (RFP) to put freight out for bid, typically on an annual basis, correct? You are smart. This process helps keep your current freight providers on their game and gives you the opportunity to evaluate the capability of newcomers. Here are four steps that will have you well-prepared for your RFP process:

1. Get Organized

Details. And lots of them. That is the basis of a good RFP. The homework you need to do is not only for the sake of line items in the RFP but also for the alignment of your internal team. You need to work together to define the ideal outcome of the process. Once you are in lockstep regarding what a successful RFP looks like, there will be numerous facts to gather and decisions to make. You should get a jump start on these:

  • Know your annual freight spend and volume
    • When you can, break your spend out by mode. This will help pinpoint your savings potential and give you data to measure against.
  • Profile your freight in detail
    • The particulars will help freight providers create tailored solutions for you. Document your freight’s handling requirements, load time, standard weights, pickup and delivery times. Providers will also want to know if you have driver-friendly facilities and how quickly you pay. It is also beneficial to document the efficiency of your check-in and check-out process.
  • Outline the full objectives of your RFP in your clear and concise bid package
    • This is where you define your expectations for the RFP. What do you hope to achieve? Freight services want to provide the information you are looking for. This will help both your organization and those invited to bid to act with intention throughout the process.  
  • Set the number of bid rounds
    • The number of rounds in the RFP process helps those bidding understand your communication cadence and informs their own strategy in regard to winning your business.

Pro tip! Gather visuals of the products you ship. Part of your job is to make your freight attractive to the service provider. They need to want to move your freight.

2. Determine the Participants

Your carrier strategy likely includes a mix of carriers and third-party logistics companies (3PLs) — small, large, national, regional. The tender percentage awarded to each is deliberate and likely based on the requirements of your freight. Bring this same thought process as you determine the invite list of your RFP. You want a good mix to help you thrive in a changing logistics landscape. Balance this group based on fit with your supply chain operations.

The RFP process is the perfect opportunity to evaluate your incumbent shipping services against potential new providers — how they compare on rates as well as overall fit in your strategy. Remember, these partners can make a large impact on how customers view your reliability. So, once you have your carrier mix determined, go ahead and prepare your list of hard-hitting questions:

  • How does our freight fit into your network?
  • Where will we rank among your clients in freight spend?
  • Are we aligned on KPIs?
  • Have you done X before?
    • Whatever your freight requires, make sure they have handled that situation in the past.

3. Establish a Benchmark

To determine your RFPs success, you have to know if it helped you hit your established goals. So, you need a baseline for comparison. There are a few ways you can accomplish this:

  • Gather historical data from your company
  • Reach out to industry trade associations that may share their knowledge
  • Work with an outside consultant

As you are compiling this data, be on the lookout for opportunities to optimize your transportation program. Maybe your RFP should consider modal conversion or the opportunities for lane aggregation.  

After a set time, once your new RFP is in place, look at the numbers in comparison to your baseline. Are they trending in the manner you had hoped? Preparing for measurement and analysis is a plan for success.

4. Outline RFP Administration

You will need to create a system of checks and balances for the RFP process to help secure the best outcome for your business. Define the communication pattern so you have a game plan to reach out to the participants after each round. We also advise an open line of communication with carriers and providers throughout the course of the RFP.

Pro tip! Do not provide target rates in your initial RFP. It could adversely impact the results and cause you to overlook providers that are a great fit with your operations.

After the RFP Process

You prepared and administered your RFP. Now what? Once your freight has been awarded, there is still more to do to get the trucks rolling. Onboarding calls are very important to make sure you are on the same page with each provider regarding service levels and volume commitments. You put a significant amount of your time and energy into the RFP, work to make sure it was worth the investment.

3PLs are a vital part of success in most supply chains. Your carrier strategy likely endorses a mix of 3PLs and asset-based carriers. We provide the value of strategy and solution that only a 3PL can. If our networks compliment one another, we will be a trusted resource to help your company succeed in hitting the goals of your RFP and beyond.

Submit your RFP to inquiry@agforcets.com.

 

Agforce Transport Services Joins U.S. EPA SmartWay® Transport Partnership

Leawood, KS — Agforce Transport Services today announced that it joined the SmartWay® Transport Partnership, an innovative collaboration between U.S. Environmental Protection Agency (EPA) and industry that provides a framework to assess the environmental and energy efficiency of goods movement supply chains.

Agforce Transport Services will contribute to the Partnership’s savings of 215.4 million barrels of oil, $29.7 billion in fuel costs and 103 million tons of air pollutants. This is equivalent to eliminating annual energy use in over 14 million homes. By joining SmartWay Transport Partnership, Agforce Transport Services demonstrates its strong environmental leadership and corporate responsibility.

“As a broker, we are conscious of the carriers we choose to move freight in our network, currently partnering with more than 300 SmartWay carriers. It’s not an easy designation for carriers to achieve, and it speaks to their overall quality and dedication to sustainability. We see this partnership as invaluable to our green efforts and the overall environmental footprint of the freight industry,” said Andy Tuley, Vice President – Business Development.

Developed jointly in early 2003 by EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility, this innovative program was launched in 2004. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including shipper, logistics companies, truck, rail, barge, and multimodal carriers.

Agforce offers streamlined and flexible services helping companies dramatically improve their supply chain. We deliver the most effective solution for your business to help you ship your product where it needs to be — when it needs to be there. Together, we can simplify logistics. For more information about Agforce Transport Services, visit agforcets.com or call 844.713.6723.

For information about the SmartWay Transport Partnership visit www.epa.gov/smartway.

LTL Rate Increases and Market Saturation

High demand and favorable market conditions mean most LTL carriers find themselves firmly in the driver’s seat when it comes to pricing and choice of freight as we enter the second half of 2018. Peak shipping season occurs during the third and fourth quarters along with contract negotiation between many shippers and carriers. With LTL companies already operating at full capacity and the undeniable impact of freight rates on profitability for most companies, shippers will be better prepared for what’s ahead when you understand the why behind the current state of the LTL market.

  • LTL Capacity
    While the economy is certainly a catalyst of LTL demand, there are other contributing factors. Tight LTL capacity also stems from the changing retail landscape (brick-and-mortar to ecommerce), spillover from full truckload demand, available equipment, and competition for available drivers.
  • Retail
    The “middle mile” of ecommerce shipments are often handled by LTL carriers. With a 16 percent growth in online retail purchases in 2017, and little sign of slow-down in 2018, ecommerce will continue to impact LTL capacity. Some carriers have adjusted operations by adding hubs and service centers to accommodate the industry, including their more rigid on-time delivery expectations.
  • Truckload Demand Spillover
    The overly saturated truckload market has some shippers looking to LTL carriers. That being said, heavy partial truckload shipments are not always ideal in LTL carrier operations. This has many carriers weeding out the freight that does not complement their network.
  • Available Equipment
    According to an article from Supply Chain 24/7, LTL carriers have not added much equipment to their fleets in the past few years. They speculate, however, that even a surge in available trucks would not have much impact due to the driver shortage.
  • Available Drivers
    Several growth sectors, including construction and manufacturing, share a workforce with LTL carriers. Competition within other industries that may offer more lucrative opportunity is a challenge for LTL carriers. The driver shortage of the truckload sector has not yet had a large impact on LTL.

Unexpected Consequences of High Demand

The benefit of high demand for LTL carriers is revenue growth — which is up 10% or more through volume or yield gains. It is not all roses though. There are challenges for carriers operating over capacity, and shippers are likely to feel it.

Carriers are maximizing profits, in part by weeding out freight that is less profitable — not a good fit for their network or operations. They are using pricing initiatives that make the shipments costly and ultimately leave shippers disinclined to tender freight that carriers find unattractive.

The freight that is moving through the overly saturated LTL operations may experience inconsistent service levels. Some terminals are already running weeks behind. The holiday surge will likely bring more missed pickups and transit delays for shippers. Without enough employees or equipment to handle such high shipment volume, some carriers have embargoed their guaranteed transit services. YRC Worldwide has suspended reimbursement of their Time-Critical service due to their struggle to keep up with demand. A note on their website indicates they may reinstate the practice, but are still facing difficulties, “We are currently working on a re-launch of our time critical services. While our service is improving, we continue to face industry challenges including peak shipping volumes, driver shortages and capacity constraints.”

Summary

With carriers’ eyes on profits and high demand in the market, freight shipping rates are likely to continue increasing during shipper-carrier contract negotiation the remainder of the year. Prices will go up, but do not expect service levels to do the same. Most LTL carriers are not operationally equipped to handle this surge in demand. Shippers will need to prepare for inconsistent transit days and allow time in their supply chain for things like missed pickups and late shipments.

Together, we can simplify logistics. Contact us today for a free consultation. Give us a call at 844.713.6723 or email us at inquiry@agforcets.com.

 

National Truck Driver Appreciation Week and Beyond — Thank a Truck Driver

From the alarm clock you snooze in the morning to the TV you Netflix and chill with at night, it’s likely you have a truck driver to thank for making all the things you need, want and enjoy in your life accessible. We appreciate our driver partners every day, and we love the spotlight they enjoy during National Truck Driver Appreciation Week. It is a great time to reflect on all they do to keep our nation connected.

Let’s take a minute to explore the importance of truck drivers. They are undoubtedly the center of the freight industry, making it possible to move goods from here to there. Could they also be the hub of our general society? Think about the important institutions that would have trouble obtaining resources without truck drivers, like hospitals or prisons.

In an article by TruckerPlanet.net, they consider a world sans drivers. Their article states in the first 24 hours without truck drivers hospital, service station, and manufacturing operations would be impacted, as well as food supply. In the days that follow, supplies would become scarce and food shortage would be a concern — not to mention waste build up. Imagining this scenario makes it quite easy to give thanks to the men and women that help keep us cared for and fed.

It also shows just how important the trucking industry is to our national economy, contributing nearly $739 billion in revenue a year. About 70 percent of all freight tonnage is transported by truck, and 80 percent of U.S. communities are supplied by trucking deliveries.

There are currently 15.5 million trucks in operation traveling more than four million miles of roads. We imagined a world without drivers, but even a drop in the number of truckers on the road would have significant consequences. It would almost immediately translate to slower delivery times and higher priced goods.

Truck Driving is Hard

Let’s not forget what truck drivers give up to help us stay connected and productive, starting with the time they spend away from family and friends. Driving about 125,000 miles a year, they may have around 3 weeks between nights in their own bed.

In addition, a truck driver’s health can suffer. Over the road drivers may not have a lot of choice when it comes to healthy food selection, and sitting for long periods of time is not good for anyone. Seeing a doctor or health care professional in general can be a challenge for truck drivers with their schedules allowing for limited time at home.

And how can we not mention the dangers drivers face on the road itself? We need our drivers safe. That is easier said than done when you’re hauling 45,000 pounds or more during rush hour in Chicago, in the dark of night around sharp corners, or in frigid conditions while snow starts to accumulate. That is more than most of us would be willing to put on the line. It takes a lot of skill to navigate the roads in a truck.

Showing Appreciation

Long story short, drivers do more for us in our everyday life than what is typically recognized. From keeping gas in the stations to apples in the store, they keep us connected to the goods we cannot live without – often at a cost to their personal lives. With that in mind, let’s remember to thank our hardworking truck drivers during National Driver Appreciation Week, and every day that follows. They truly deserve respect and appreciation for the work they do to keep our country moving.

Together, we can simplify logistics. Contact us today for a free consultation. Give us a call at 844.713.6723 or email us at inquiry@agforcets.com.

 

What’s Driving the Trucker Shortage?

The U.S. trucking industry is short of drivers—about 50,000 short, according to an October 2017 estimate from the American Trucking Associations (ATA). The developing driver drought is a critical issue that has captured the attention of the trucking world: In an annual survey conducted by the American Transportation Research Institute, driver shortage ranked first among industry concerns.

A number of factors are contributing to the shortage, ranging from economic trends to demographic and regulatory shifts to the rigors of the job:

  • Freight volumes are on the rise, thanks to healthy commerce and a strengthening economy.
  • The average driver age for commercial truck drivers in the U.S. is 55, and 25 percent of current drivers near retirement age.
  • The trucking industry is having trouble attracting younger people to the profession. One issue is that prospective drivers must be 21 years old to hold an interstate commercial driver’s license. That typically means three years after high school, by which point many potential candidates have pursued jobs in other sectors.
  • A range of federal regulations—most recently the Elog mandate put in place in April—require truckers to track the time they work, which can impact productivity, and thus pay.
  • The long hours and requirements of the job can limit its appeal. Most drivers—especially newer ones—are on the road for extended periods of time, returning home only a few times a month. Adapting to life on the road (showering at rest stops, limited dietary choices, safety issues, and more) can make the job less appealing to some.
  • Drivers must pass a DOT (Department of Transportation) physical at least every two years. Some with specific health issues must do this annually. A lot of times the driver must pay for the physical out of their own pocket.
  • Sleep apnea and diabetes can disqualify a driver if certain criteria are not met.
  • Carriers cannot find drivers that can pass the required drug test at hire and then randomly throughout their employment.

The ATA estimates that because of industry growth and retirements, the trucking sector will need to recruit nearly 100,000 new drivers every year to keep up with the demand for drivers. The shortage is particularly acute in the long-haul, over-the-road truckload segment.

There are steps the trucking industry can take to help address the need for drivers:

  • Try to expand the demographic. For example, women currently make up only 6 percent of the truck drivers. Some observers see veterans seeking career transition after military service as another good potential source of prospective truckers.
  • Continue to boost driver wages. The national median for truck driver pay is $53,000, which represents a $7,000 increase from the previous year. For private fleet drivers, the pay increase is up $13,000.
  • Decrease time on the road. Trucking companies can address lifestyle issues of the profession by offering route options that are closer to drivers’ homes, reducing the long-haul lifestyle aspects of the job.

The truck driver shortage affects the entire economy and could have a significant impact on supplier costs and shipping delays. Agforce Transport Services monitors and tracks trucking industry developments like the driver shortage to provide informed consultation to customers.

Agforce specializes in customized transportation solutions for our customers’ specific business requirements. To learn more about how we can help address your company’s needs, contact us today for a free consultation. Give us a call at 844-713-6723 or email us at inquiry@agforcets.com.

Rail Price Spike: What You Need to Know

A capacity crunch in rail shipping is occurring earlier in the year than anticipated has the industry bolstering for substantial and sustained price hikes. Shippers should be aware of this trend. Rail prices are expected to continue to rise over the course of the year.

Market observers are pointing to fully booked rail lines on freight routes out of Southern California as an anomaly that indicates the trend, since the current level of demand typically doesn’t take hold until later in the year. Experts are anticipating unprecedented pricing peaks in rail prices in late summer and into the fall as many factors push more freight to railroads, including overall strong economic growth, a shortage of truck capacity, rising diesel prices, and reduced driver productivity attributed to the electronic logging device (Elog) mandate.

These factors, along with the capacity availability and reliability of intermodal shipping, are shifting the market:

  • Total domestic intermodal traffic expanded 7.4 percent year-over-year in the first quarter of 2018 (the strongest gain since the second quarter of 2014), according to the Intermodal Association of North America, as shippers that could not find truckload capacity turned to the rails.
  • The four-week moving average on U.S. intermodal is up 7.9 percent, according to the Association of American Railroads.
  • The Cass Intermodal Price Index rose 6.6 percent year over year in April to 141.9, close to the all-time record of 143.2 established the month before. The three-month moving average is up 5.9 percent.

With capacity so tight, shippers will need to be more proactive and flexible than ever, and look to lock up capacity as soon as it is available—especially smaller shippers that don’t have predictable volume and weren’t able to lock in capacity contracts earlier on. Those shippers will need to rely on the spot market to find capacity at a time when prices are at record highs.

All of that means shippers are likely to face a difficult year of negotiations and decisions. And in unpredictable markets like the current one, experienced partners and advisors are more important than ever. Agforce Transport Services monitors shipping markets closely and advises our customers how best to navigate the volatility that typically characterizes the market. We can help shippers navigate market fluctuations and better manage rate volatility by leveraging a wide variety of carriers.

Agforce specializes in customized transportation solutions for our customer’s specific business needs. To learn more, contact Agforce today for a free consultation. Give us a call at 844-713-6723 or email us at inquiry@agforcets.com.

Market News – Flatbed and Oversized Freight Options


Businesses with larger loads requiring special equipment utilize flatbed and oversized options to move their freight. This mode meets specific size and weight requirements with various types of equipment including:

  • Standard step decks
  • Standard flats
  • Double drops/lowboys
  • Hot shots
  • 53’ trailers

Flatbed demand is thriving this year. According to DAT, load-to-truck ratio has doubled year-over-year with an increase of 102% – ascending since August 2016. What markets drive these demands? According to DAT, there are four significant markets to watch:

  1. Oil, natural gas, and plastics
  2. Wind energy
  3. Construction
  4. Automotive

Read more about DAT’s findings in their article 4 Markets Driving Skyrocketing Flatbed Demand

Finding the right partners to discuss flatbed and oversized options and equipment requirements mentioned in this article can make it easier to reach your business goals.

Agforce Transport Services specializes in customized transportation solutions for our customers’ specific business needs and requirements. To learn more about how we can help simply your path to market, contact us today for a free consultation. Give us a call at 844-713-6723 or email us at inquiry@agforcets.com.


Related Stories

For additional information related to changes in the marketplace, status of the logistics industry and what’s ahead, check out these articles:

Food Logistics:  Spot Truckload Rates, Demand Stay Hot into August

Food Logistics provides an overview of the freight surge summary that reports the end of July moving into early August.  The article shares the four-week trend lines and national averages for van, flatbed, and refrigerated rates.

Read full article…

DAT:  How Natural Gas and Plastics Impact the Truckload Spot Market

DAT provides insight on how new natural gas and petrochemical production investments have created a noticeable impact on the trucking spot market.

Read full article…

Evaluating Freight Bids and Transportation Strategies


As a decision-maker in the industry, you are likely in the midst of the bidding season and planning process. This is the best time to evaluate the economic demands and supply chain complexities that impact your freight transportation model and strategy. It’s also a vital time to evaluate your existing and new carriers and brokers to ensure that they add concrete value through services, achieving your goals while meeting supply chain demands.

According to industry economic forecasters, shipping demand will continue to grow in 2017. The Freight Transportation Services Index (TSI), which reports freight amounts carried by the for-hire transportation industry, released results in March. Here are some interesting facts from the report:

  • Index highs and lows: For-hire freight shipments in January 2017 (123.2) were 30.1 percent higher than the low in April 2009 during the recession (94.7). The January 2017 level was 1.6 percent lower than the historic peak reached in July 2016 (125.2).
  • Year-to-date: For-hire freight shipments measured by the index were at the same level as in January compared to the end of 2016.
  • Long-term trend: For-hire freight shipments are up 10.6 percent in the five years from January 2012 and 12.3 percent since January 2007.
  • Same month of previous year: January 2017 for-hire freight shipments were up 0.8 percent from January 2016.

Due to supply chain demands, shipping rates and ongoing regulatory changes, we’re also seeing shippers reevaluate choices and partnerships across the supply chain. Finding the balance between managing supply chain complexity and choosing partnerships that meet and exceed expectations is crucial. 

Therefore, as part of your planning and bidding process, it’s also the best time to look at existing carriers and brokers whose services add tangible value. When making decisions, consider key factors that are most important to you and your business such as seasonality, transportation options and price, technology and organizational structure.

These factors should impact decision-making along with thought to the following suggestions:

  • Work with carriers that are flexible, who offer and have more options to negotiate better prices, gain quicker transit times and provide various modes of transportation services.
  • Spread out shipments and loads to gain pricing efficiencies and better use of carrier services.
  • Consider intermodal options where fuel is less of a factor in pricing (moving from intermodal boxcar to rail, etc.).
  • Align networks and embrace collaboration. For example, carriers can signal changes in their network with pricing, which allows shippers to take advantage of these changes.

The complexity of the supply chain and economic demands will continue. However, finding partners whom will collaborate on new opportunities can make it easier to reach your business goals.

Agforce Transport Services specializes in customized transportation solutions for our customer’s specific business needs and requirements. To learn more about how we can help simply your path to market, contact us today for a free consultation. Give us a call at 844-713-6723 or email us at inquiry@agforcets.com.


Related Stories

For additional information related to changes in the marketplace, status of the logistics industry and what’s ahead, check out these articles:

Logistics Management:  25th Annual Masters of Logistics

Logistics Management highlights results of the “25th Annual Trends and Issues in Transportation and Logistics” study which suggests three factors – transportation, technology and organizational structure – are impacting strategies and desired financial performance.

Read full article…

Food Logistics:  Fixing Food Loss with Disruptive Tech

Food Logistics reports that more than one-third of all food is spoiled or damaged before it reaches supermarket shelves and discusses a new initiative aimed to change the food system through innovation and collaboration.

Read full article…

Logistics Management:  Study Identifies Best Approaches to Survive Supply Chain Complexity

Joint APICS and Michigan State University study offers solutions to a major industry challenge.

Logistics Management shares insight from a report that addresses the increased complexity of today’s supply chain flow and challenges, and ways in which to approach it effectively.

Read full article…

Business Logistics: Key Trends That Are Here to Stay


Technology

Technology is already playing a significant role today. We will continue to see this trend throughout the coming years. The reason technology greatly impacts businesses is that customers are demanding more visibility, and their expectations are changing. Today people want product delivery reliability and within their budget. Companies are looking for a trusted transportation and logistics provider to meet consumer trends.

The additional benefit of technology is the integration with customer processes. Collaborating to share real-time data strengthens relationships and increases visibility. Customers rely on their transportation and logistics partner to provide the best service and technology solutions.

Logistics Management’s State of Logistics 2016 reports that technology, operational regulations and requirements will impact how businesses work with their 3PL partners. The featured in this article indicates that companies adapting to these changes are coming out ahead. The report also supports what top experts in the logistics field are already seeing take place in the market.

Crucial Relationships

Leveraging 3PLs continues to evolve, and it’s a necessary trend for supply-chain partners and customers. Open communication, understanding business needs, and collaboration are critical in establishing a successful relationship between customers and 3PLs. The results that businesses see from a productive relationship are improved efficiencies, cost savings and customized services. When working with a 3PL, it’s important to ensure that they are not only proactive and consultative, but can also meet the demands of business customers today, which include:

  1. Providing the right facilities and mode solution
  2. Technology + real-time data and communication
  3. Ability to understand needs and collaboration
  4. Thought leadership
  5. Ease of doing business

At Agforce, we’d love to discuss your current needs and find ways to help support the trends featured in this article. Contact us at 844-713-6723 or email us at inquiry@agforcets.com.

Industry Articles


Fortune

Why Craft Liquor Is the Next Big Thing

Forbes

Future Of Logistics: Five Technologies That Will Self-Orchestrate The Supply Chain

Inbound Logistics

3PL Partnerships. How to Ink the Deal

Food Logistics

Leveraging The Power Of Your 3PL

No Secret Ingredients: The Importance Of Transparency In Food Manufacturing