Some shippers operate under the misconception that once the bid awards have been made, the RFP process has been completed. This is not the case. There is another critical step that can “make or break” the bid process. It is absolutely essential, particularly in multi-plant companies, to have a process in place, immediately upon implementation, to monitor routing guide compliance.
There is an old adage in business that you cannot manage what you cannot measure. This fully applies to the implementation of freight bids.
Never underestimate the power of human relationships. Tickets to sporting events, golf outings, annual fishing trips or vacations at a carrier’s summer or winter residence can do wonders to dismantle the work of a freight bid. In our work we have seen companies use low ranked carriers, or even carriers not listed in the routing guide, to move their freight. To maintain certain long standing carrier relationships, some shippers can and will find reasons to make a switch back to the incumbents.
We would recommend that you not conduct a freight bid until your company is able to put in place some form of reliable compliance tracking. Even a weekly spreadsheet that displays by lane, the carriers moving the freight that week and the reasons for replacing a carrier in the routing guide, would be a helpful tool.
If you decide to move forward with a freight bid initiative and then implement it, with no way to track routing guide compliance, you are asking for trouble. It won’t be long before the CFO starts asking questions as to why the expected savings have not materialized. For companies that can track routing guidance compliance on the date of the bid awards, this will significantly increase the odds of success.
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