The subject of Shipper-Carrier Collaboration and Freight Bids came up in at least three tracks at this week’s Supply Chain Canada Annual Conference, presented by SCL and Canadian Industrial Transportation Association. The subject was discussed at length during a panel discussion entitled, “Shipper-Trucker Relations” led by Lou Smyrlis, Editorial Director, Transportation Media, Business Information Group. To address the sad state of relations, the panelists highlighted some of the issues raised at a recent meeting held between representatives of the Ontario Trucking Association and the CITA, one of Canada’s leading shipper advocacy groups.
This discussion was of great interest to me and my company since we have been involved with freight RFPs (Request for Proposals) for over nine years, helping shippers design and execute their bids and helping carriers respond to some of the more complex RFPs. Here is some of what I heard this week and a few ideas on how to fix several of the problems. First a bit of background
The Great Recession – the Trigger for the Freight Bid Mania
Prior to forming my consulting practice in 2004, I worked for carriers in the freight industry for many years. Freight bids have been around for at least twenty years. Before entering the consulting arena, I had seen and responded to my fair share of RFPs. Freight bids became very prevalent during the Great Recession in the late 2000s. As business volumes and revenues shrank, many shippers employed this tool to drive down their freight rates.
One of the panelists on the Shipper-Carrier Relations track spoke about how overused and abused the tool became. He highlighted the fact that some shippers conducted as many as three bids on the same freight in the same year to drive down rates. Freight bids have now become an overworked and often times poorly used instrument to source modes and carriers. One trucking company executive on the panel was very blunt in his views on freight bids. He stated simply, “I hate them.”...