Compare Quote Apples to Apples [Chapter 5]
A chapter in our freight procurement best practices series, how to standardize your quoting process.
There is no practical industry standard for logistics quotations and therefore everyone comes up with their own format. This makes it cumbersome and expensive to compare quotations equally; apples-to-apples. Not only that, most shippers have to calculate the total potential cost themselves, assuming they would know how and what applies to the shipment and what does not. The fun really starts when multiple currencies come into play across different systems of measurement. Is 2 euro per kg more expensive than 1.1 USD per lbs?
The solution: Standardize your quoting process and add smart features to make it complete. There are a few tips that will help to standardize your quoting process.
Get A Total Quote To Compare
An automated process will also help you to calculate the total quote of the shipment based on the breakdown provided by the logistics service provider. The logistics service provider can see the total quote prior to submitting so you always know the total cost is complete as per your requirements. And if the shipment was quoted in different currencies it can show you all quotations in your preferred currency.
Automated Currency Exchange
Logistics providers like to minimize their risk of currency exchange and therefore might decide to quote a part of the shipment in a different currency. To avoid having to calculate these exchange rates, any decent automated platform will do this for you. It calculates all charges automatically based on the real-time exchange rates of your preferred currency. For example, you receive a quote in USD, MYR, and SGD and your preferred currency is USD. In Cargobase you will see the breakdown in the quoted currency and in USD, with a total quote in USD.
Use Fixed Charge Codes
Have providers submit quotations broken-down in cost elements that you prefer. For example, a freight quote is not just $1000, it consists of several elements like air freight charges per kg, fuel & security charges, pick up fees, MAWB fees, screening charges, and many more.
If you determine the breakdown, it will be easier for you to compare quotes and to determine a new price when elements change. But the best thing is that it allows you to track price changes over time. Per provider, lane, team, department, or freight mode.