The recent blog,The FTL Shipper/Carrier Dynamic: How The Emerge “Network Effect” Improved your “Net Work” about the Network Effect, discusses how the Emerge Freight Procurement Platform gives FTL shippers immediate access to over 30,000 pre-vetted carriers. Based on the premise that the expansion of one’s carrier base leads to the best combination of Full Truckload price and service, there’s no disputing that the Emerge Network Effect positively impacts the quality of a shipper’s “Net Work”.
Leveraging the Network Effect
One of the many ways Emerge unleashes the Network Effect is through the platform’s Dynamic RFP. By enabling companies to quickly and efficiently conduct multiple bids per year, carriers can present offers that reflect their ability to commit assets to a FTL program. Over time the speed, accuracy and flexibility inherent to running shorter bids become a virtuous cycle that improves shipper/carrier relations.
Of course, the success of the shipper/carrier dynamic hinges on carriers participating in these cycles. In other words, having access to +30,000 carriers is a huge plus, but with capacity and drivers so tight these days, getting them to participate can be challenging. Within the context of optimizing the features of the Freight Procurement Platform, this blog discusses ways in which shippers can further entice carriers to bid on their business.
Long before Emerge revolutionized the FTL procurement market, there were a number of reasons why a carrier chose to either bid or decline to bid on a shipper’s freight. As obvious as these factors may seem, they are fundamental to a carrier’s bid/no-bid decision-making process and, as such, must be explicitly stated here:
- Bid requirements have to fit the strategic and operational objectives of the carrier
- A bidder has to be confident that they can make a fair profit in exchange for a quality service
- An RFP must contain sufficient details for carriers to provide a realistic response
- The carrier has to believe that they have a competitive chance of winning the business
While there are other reasons why a carrier might decline to respond to an RFP, the above variables occupy a big part of a carrier’s thought process. And amongst these four factors, the one that is most likely to be overlooked by shippers is the last one…does the carrier think they have a “shot in hell of ringing the bell”.
To summarize, if there isn’t enough information in a Request for Proposal to determine if its requirements align with a carrier’s operating model, the carrier isn’t sure they can make a fair profit AND they don’t feel like they have a fair shot at winning the business, it’s highly unlikely that they’ll dedicate the resources needed to submit a legitimate offer.
Based on the above realities, here are some ways that shippers can combine their tactics with the capabilities of the Emerge Freight Procurement Platform to consistently attract quality carriers to a shorter bid.
Conduct multiple bids per year with a clear objective for each one.
Whereas shippers should make the best use of the Emerge Dynamic RFP platform, it is essential each event have a clear objective. More importantly, the goal of the shorter bid should be explicitly stated, so bidders know how best to design a solution.
Whether a shorter bid is based on a three-month project to stand up a new DC, a seasonal shipping surge, or the addition of a new customer location to a shipper’s network, bidders are more likely to believe they have a chance of winning loads when they know what the objective is beforehand.
Give bidders the details they need to present a high-quality offering.
In addition to stating the objective of a shorter bid, shippers should also provide as many details as possible about operational and service requirements. Carriers will take an RFP more seriously when they understand factors like volumes/frequency, inbound vs. outbound freight, equipment needs, single vs. team drivers, appointments, etc.
When using the Emerge Dynamic RFP platform it’s easy to design a template that provides all the details a carrier needs to respond with a solid service offering. Better yet, carriers know that all respondents see the same RFP information on the platform, so it’s clear that everyone is on the same footing.
Make it easy for bidders to participate.
With capacity and driver availability so tight, carriers are more selective than ever about the bids they participate in. Not only are they more selective, but they will also gravitate towards bids that aren’t a major hassle to participate in.
While recognizing that there’s a fine line between facilitating bid responses and a shipper’s need to vet a carrier properly, the Emerge Freight Procurement Platform is designed to meet these needs. Apart from all carriers being fully vetted ahead of time, the concise and easy-to-follow structure of the bid templates removes any obstacles that may cause a carrier not to bid.
Award loads to high potential partners.
The best way to prove to a carrier that there’s a chance of winning loads is to actually give them freight. Although we would never encourage the awarding of business solely for the sake of doing so, awarded lanes and test loads send a clear signal about a shipper’s commitment to new relationships. By no coincidence, the Emerge Freight Procurement Platform makes the transition from conducting a short bid to tendering and moving freight in a snap, so neither party will miss a beat when it comes time to move shipments.
Facilitate the carrier payment process.
In addition to all of the above factors, one of the best ways to attract quality carriers to a shorter bid is to have them know they’ll get paid in a timely fashion, if they move loads. Once again, the purpose-built nature of the Freight Procurement Platform takes this point into account, and upon executing a shipment through the marketplace, it is Emerge that pays the carrier directly, on time, and in full.
At the end of the day, consistently attracting quality carriers to an RFP is a three-part process. First, a shipper has to understand what motivates carriers to pursue business in the first place. This approach compels shippers to identify the variables in a carrier’s bid/no-bid thought process, with a particular appreciation for the fact that carriers are more likely to bid on loads when they think they have a fair chance of winning.
Once bidders believe they have much more than a “shot in hell” of being awarded business, the shipper has to remove any obstacles to bidding. As a purpose-built platform, the Emerge solution does just that through features like Scenario Builder, centralized awards management, contract execution and fields that capture detailed service requirements.
The third step in the process comes when the shipper and carrier work together to create a mutually beneficial relationship. Based on the understanding that both parties have their own business objectives, partners have to work together to create a win/win vibe. At that level of cooperation, it’s not just the carrier who “rings the bell” when loads get awarded, both shipper and carrier do so in tandem. And in order to achieve that level of collaboration, the Emerge Freight Procurement Platform is there every step of the way to facilitate the process!