01 May Freight Payment RFP: 4 Tips to a Successful Request for Proposal

So it’s time to consider change.  Either your current internal process isn’t making the grade, or the ‘pain-to-change’ now outweighs any benefit of staying with your current freight payment company.  It’s now time to draft and distribute a freight payment RFP to select providers.

This post won’t attempt to create the exact questions you should ask a provider.  However, there are four tips to preparing your freight payment RFP that, if followed, can increase the likelihood of contracting with the right freight audit and payment company best-suited for your business.  We strongly encourage you to consider the following ‘tips’ as the industry’s best practices.  Opting to employ them will increase the likelihood of entering into a solid business relationship with more peace of mind.

TIP #1—Rally the Troops

A freight payment RFP is not the time to act as a one-man-band.  Freight payment services will effect multiple departments.  You must get transportation and logistics personnel along with finance and information technology (IT) involved.  Running a successful freight payment RFP requires communal buy-in.

Internal collaboration is critical as shippers look to outsource for the first time or transition away from an existing provider.  The whole team must be on the same page.   This, of course, includes the executive sponsor and one signing the contract.   Don’t waste time by not organizing the right team to select a provider.  It is common for one department to sponsor and issue the RFP, do the review, and select the partner only to have road blocks presented during implementation because another department was left out of the freight payment RFP process.  We strongly recommend making sure all parties are informed and have bought into the process.

TIP #2—Be Time Definite

Nobody wants to make a mistake or jump head-long into a service that isn’t the right fit.  However, a shipper that closely follows a time-definite freight payment RFP process will experience greater success and satisfaction upon selection.  Try to minimize delays in notifications of advancement in the RFP process or selection as the chosen supplier.  A prolonged delay, postponement, vacation, or even holidays can draw out the proposal process.  Remember that selecting a provider needs to be made based on accurate information and knowledge gained from reading the answers to the freight payment RFP or participation in a supplier presentation.

A shipper would be wise to make decisions based on fresh knowledge.  A review that stretches more than 45 days is going to be stale with hazy recollections of freight payment services.  Be mindful of scheduling conflicts, vacations, and holidays, and plan accordingly.  Once the decision is made, provide a courtesy debrief with the runner-up, then move into a timely contract negotiation.  Lean on your legal department to finalize needed language and get the implementation underway.  A team that is all on the same page will allocate resources to implement efficiently, creating a win-win for all.

TIP #3—The Freight Payment RFP Scorecard

Most supply chain and transportation buyers understand the value of using a scorecard during the freight payment RFP process.  A shipper’s sourcing or purchasing group should be able to develop a simple but comprehensive scorecard.   Each team player that participates in supplier presentations should have a way to quantify their services.  Scorecards should be based on a ranking system (i.e. 1-5) by subject or category (i.e. audit, freight payment process, customer service model, reporting, etc.).  This allows your company to rank answers in accordance with company goals, objectives, and needed services.  The collection and quantification of scores will aid the decision making process.

Additionally, a wise shipper will remove any potential bias held by an internal team member towards a specific supplier if the service provider’s name is removed from the freight payment RFP responses.  This blind review ensures a more critical and accurate review will occur.  Your team is more likely to invest time and effort to score the supplier if they don’t know who the freight payment company is.

TIP #4—Invest in an Onsite Visit

A shipper may ultimately spend tens of thousands of dollars with a freight audit and payment company and pass millions of dollars through their bank account.  Would you feel comfortable doing that without first paying them a visit?

Seek a budget approval to travel and visit your top two finalists.  Don’t skimp here.  Make the trip.

Yes, the technology-age has removed any need to partner with a firm next door or even regionally.  The Internet, web conferencing, and telecommunication has removed geographic boundaries.  However, taking the time to meet the customer service and implementation team of your future freight audit and payment partner is critical.  Being onsite, a shipper can meet senior executives and founders while seeing the security protocols for both the supplier building and technology.  Taking a tour of your partner’s facility can be one of the final and most important aspects of running a successful freight payment RFP.

Having been in business for over 20 years, SSI has participated in 100s of freight payment RFPs.  We know what works and what doesn’t.  We’ve seen shippers invest wisely in the review process and walk into positive, healthy, long-term partnerships.

To learn more about SSI and how to run a successful freight payment RFP, download our white paper.