The Blank Check VS RFQ

Spot-buy freight is often the highest freight cost in our supply chain as we don’t know all the options available to us and end up paying more than we need to. Putting an RFQ in place instead of signing a blank check will encourage providers to quote their best prices and reduce margins significantly.

It’s late in the office and we have a line down at the manufacturing facility. No one wants that and we never see it coming. Everyone kicks into high gear at a time like this. There is only money to lose with every minute we waste. We type rapid emails and make numerous call to providers, it takes a while. Then we keep our fingers crossed and wait.

We scramble at the ring of the first return call.

“We’ll take it!”

From across the world the tools we need get loaded and make their way to the facility as we get slapped with a bill priced far higher than any regular shipments.

“Is this how much it costs? I wouldn’t know…”

Here’s The Situation

Spot-buy freight is often the highest freight cost to shippers due to it nature; urgent shipment, a new lane and no rates on file. The need is immediate and handled without a process. More often than not, shippers aren’t ready and take a long time to arrange what is needed, disrupting their regular workflow. There’s a lack of control over the situation, with little time and information available to make a good decision. It’s hard to blame logistics service providers from capitalising on this. If it were you, you’d likely too.

You’re paying more than you need to

This results in freight costs 40-300% more than what another provider can offer.

If only there was more time to contact them, if only they knew that there are others quoting for the same shipment. The lack of time and option to choose the best quote from providers is a problem shippers have to deal with in these unfamiliar situations. Anxiously, doing the unnecessary and paying large amounts beyond their control. Shippers should be able to put in place a process that includes an RFQ for spot-buy shipments and to receive quotes in a competitive environment. When providers are aware that they aren’t the only ones “playing”, it triggers them to reduce the margins they put on quotes in a bid to win the shipment.

Let’s Fix This

Cargobase has developed its platform to address these common problems that arise in spot-buy shipments. It’s RFQ feature allows shippers to reach out to multiple providers with a simple check of boxes when asked who they would like to invite to quote. This RFQ reaches all selected providers and they are informed simultaneously, closing the gap in the lag of information and saving time. Providers are aware that multiple providers are being contacted but don’t know who. This encourages them to quote their best prices based on the shipment. A time limit at the quoting phase ensures the quotes are made in time for the shipper to compare. With new information on routes, timing and quote price, shippers can make a choice from the quotes offered to them.

“Is this how much it costs? I wouldn’t know…”