Is 2023 the year your company wants to start working with a 3PL? There is no time to waste, as deadlines are fast approaching.
The freight shipping and logistics industries are complex. Hence, as you research what goes into partnering with a 3PL, specific terms related to the industry and a list of documentation your company needs have likely come up. One such document is a request for proposal (RFP). The RFP is one of the more critical pieces of documentation you will need near the start of the partnering process.
Subscribe to the PLS Logistics Services blog to stay up to date
What is an RFP?
In logistics and transportation, RFPs serve as proposal layouts to help find a 3PL that best meets a business’s needs. This document is vital in helping the company find a suitable and reliable business partner to place a bid. Typically, the company that writes an RFP also includes a request for information from another party to have in the bid.
Why Do You Need An RFP?
The main goal of the RFP is to help shippers find the best 3Pl provider to meet their needs. The RFP process opens lines of communication so that all parties are on the same page about the shipper’s needs, expectations, and goals (both long and short-term).
For the 3PL, the form helps them understand their role, brainstorm solutions to the shipper’s problems, and quote accurate pricing.
Steps to A Successful RFP
Provide Company Background
It is imperative to give thorough and precise information about your company, including your current business goals and priorities. Describe the specifics of your business and provide any information that can help bidders better understand your distribution needs.
The main goal of the RFP is to help shippers find the best 3Pl provider to meet their needs. The RFP process essentially opens lines of communication so that all parties are on the same page about the shipper’s needs, expectations, and goals (both long and short-term).
For the 3PL, the form helps them understand their role, brainstorm solutions to the shipper’s problems, and quote accurate pricing. Remember that potential 3PLs also choose between different customers, so a clear and compelling introduction might do the trick.
Describe a problem that needs to be solved
Remember, providing detail as to what problems your company needs to be solved is key. Explain the specific pain points within your business to give insight as to why you need the service and describe what your company is trying to achieve. This will supply the clarity needed to allow the 3PL to understand the specific solution your business might need and what KPIs they need to hit, resulting in a more fruitful collaboration.
Your company should identify any gaps in service, what you want your execution to look like, and any technical requirements the 3PL may have. This will allow the 3PL to see the entire picture and implement a plan.
Make sure you have complete and correct data
To get the most out of your partnership with a 3PL and to ensure load rates are accurate, all the details you provide in the RFP must be complete and correct. Believe it or not, supplying incorrect destination addresses is a common mistake. Describe the exact services, budget range, timeline, contract conditions, and technology requirements. Also include information about licenses and certifications, liabilities, and any other essential information you will need from the bidder. This will help you sort out candidates and choose more productively. Also, be sure what you are providing supports what you are trying to achieve.
Additionally, shippers must include as much information as possible on freight volumes, standard dimensions, and product handling. Detail whether the product is stackable, if the containers are cardboard or plastic, or if driver assistance is needed.
One way to ensure that you have complete and correct data is to include those in your company’s operation department in the RFP process. They are the ones who turn plans on paper into reality and can often supply added details about freight and your company’s specific needs. In short, your operations department can help you provide the correct information in your RFP.
Do Your 3PL Candidates Have Experience in Your Industry and Available Growth Capacity?
As the bidding process moves, it is important to consider a 3PL with experience in your industry. Since some industries have special transportation rules, it helps if your partner has the resources and expertise to adhere to those regulations.
You will also want to make sure any 3PL you partner with has the appropriate capacity should your shipping amount increase. A 3PL’s limitations could limit your growth potential.
Include Details Such as Length and Location
How long do you want to work with a 3PL? This is a particularly important piece of information that allows your logistics partner to give you a more accurate quote. Consider that many carriers like to lock in rates for a year, so you should send all this information as quickly and accurately as possible.
As part of your RFP, you will need to detail where your freight needs to ship and when. Your 3PL partner must be to successfully deliver wherever you need. Remember that not all have the lanes secured to make this happen.
Understand The Current Market
The logistics market can change quickly. You need to stay current on not only your industry’s market but also truckload markets and forecasts to provide the most accurate information to your RFP.
When do you need to submit your RFP?
The earlier in the year, the better! Now is when companies are putting together their RFPs to send to 3PLs. You will want to complete your RFP as soon as possible to secure the best partner for your company and freight capacity at the best price.
Once you send your RFP and receive bids from logistics providers, it is up to you to choose a vendor with experience in your industry. Remember, not all vendors will be able to service your business goals.
PLS Logistics Services has 30 years of experience in reviewing and meeting the requirements of any RFP for freight transportation. Get a quote today.