Money drives decisions. We understand that. And in an industry such as international shipping, the freight budget is often treated as the loathed financial cost. You just want your goods picked up and delivered so you can focus on the good things in life, right? After all, who cares about the name of the company or person moving the freight – you just want it done. So you machine-gun 100 RFQ’s out to various freight forwarders and receive drastically sparse results – why are some cheap and others so expensive?
As a freight forwarder that deals with quote requests on a frequent basis (multiple times per day), we feel qualified to offer “best practice” advice to the public. If you are looking to send out an RFQ to freight forwarders soon, here are some of our recommendations:
Templates – Ours or Theirs?
The template you use for your RFQ may have a direct affect on the time it takes to receive the numbers back. Some freight forwarders have a preferred template or structure that they like their quote requesters to use. Before asking for a quote, we highly recommend that you reach out to the freight forwarder and ask if they have any particular structural format or template they’d prefer you to use.
We understand that it can feel like a bit of a hassle, but if you already have your own template, the simple copy/paste of Excel data will be well-worth your time.
Customized Method vs Machine-Gun Method
Much of your approach to how and who you ask for quotes will reveal your underlying intentions – which are probably best addressed before you even begin the process. Are you looking for a reliable forwarder that you can call your “buddy” and get beers with on the weekends for the next 5-10 years? Or did your current forwarder drop the ball and now you just need someone to pick up the freight fast and cheap? Or is it common practice for you to ask for new quotes every 2 weeks because you always select the lowest-cost forwarder?
Identify your objectives before deciding your method. If you are in the market to develop a new, loyal relationship with a freight forwarder, you should take an entirely different approach than if you are just chasing the lowest cost. Now to our methods:
Customized RFQ’s are for when you are looking for quote information from a specific forwarder for a specific reason (i.e., you are looking to find the perfect forwarder that you can establish a loyal business relationship with.)
The best way to approach this type of RFQ is by transparency and communication. Don’t just ask for a quote on 5 containers of ping-pong balls. If you import 80 containers per year of ping pong balls, let your freight forwarder know – the additional information can go a long way in negotiating contracts and relaying cost-benefits from doing so.
You’ve shipped your goods before and you probably know what you’re looking for. An unfortunate way to waste your time is by requesting a quote for a shipment without telling the freight forwarder your frustrations or preferred methods of delivery and then receiving a quote back that you don’t like. If you are looking for a future business partner, communicate up-front all of your concerns, past experiences, and what you are looking for.
The customized RFQ process is by far the best process in the long-run for establishing business relationships and a reliable freight forwarder network. Think of it as a conversation – not a transaction.
Ah yes – the machine gun method. We see it a lot, we understand the intention behind it and why it’s attractive to quote requesters, but it is a horrible method to finding a freight forwarder. Here’s how it works:
You mock up a template for the lanes you need quotes on. You Google freight forwarders in your area. You jot down their phone numbers and emails on an excel sheet. You BCC everyone in the same email and “machine gun” spray 200 forwarders with the same RFQ sheet. You have the intern copy the data from 200 returned sheets and tell you the lowest cost freight forwarder. You book them. You regret it. You repeat and hope for a different result.
Unfortunately, it seems to be common practice. We totally get it – our customers aren’t as passionate about freight delivery as we are. You want it out of your facility and at its destination as quick and cheap as possible. However, this is what’s actually happening:
Every forwarder knows when they are receiving a quote request that is probably being sent to hundreds of other guys. Many forwarders won’t even want to participate because they know that the requester is just looking for the lowest cost. What this essentially means is that you are getting responses from the bottom feeders. Yes – the guys who can move your freight for half the price of the good forwarders aren’t a part of some underground club with air and sea carriers. They are just giving low-level service at dirt cheap for the opportunity to book your shipment.
If this is your current method, it may be time to ask yourself 3 questions:
1) How many transportation vendors have you used in the past 5 years?
2) Why do you keep switching?
3) When is the last time you fired a transportation vendor and why?
If you switch frequently because forwarders keep screwing up, it’s not because freight forwarders don’t know what they’re doing – its because the freight forwarders that move cargo at lowest cost don’t know what they’re doing.
If you are frustrated with the RFQ process, it’s really time to analyze what your actual process is. Are you taking the time to disclose your annual shipping volume, preferred methods of shipping, negative past experiences, and concerns with a forwarder to make sure they fully understand your situation before quoting you? Or are you BCC’ing in 2,000 forwarders to one email and machine-gunning out the same excel RFQ template to all of them, selecting the lowest-cost bottom-feeder, and firing them a month later out of frustration only to repeat the process again?
We know – requesting quotes on international shipments is not glamorous. It’s time-consuming and often frustrating. But putting the extra work up front to communicate with forwarders and spending the extra time to inform them of what you are looking for will give you a clearer picture as to what business with them may look like in the future.
If you would like to submit an RFQ to our team at Interlog USA or would just like to discuss more on the topic of RFQ’s, please call us at any time! We are excited to help and have a plethora of information on the subject!