Are You Stuck With Your New Transportation Vendor?

Are You STUCK With Your New Transportation Vendor

Businesses often times feel stuck with a vendor but detain from switching. The fear of receiving the same results from a switch is a big enough reason for many companies to prolong switching vendors. The last thing anyone wants to deal with is switching vendors to realize nothing has changed.

Stuck With Your New Vendor?

The vendor selection process can be long. Companies often lock themselves into a deal that is not right for their business. Sometimes that’s due to impatience or just simple miscommunication regarding expectations, however, the hassle is ultimately avoidable if the right steps are taken at the right time.

RFQ’s Don’t Always Give the Right Prices

Most business choices revolve around money.

That’s why RFQ’s are a popular process businesses use when selecting a new vendor. Many businesses choose the cheapest vendor based on RFQ’s to increase cost savings, but are blindsided during the transaction when hidden costs and unforeseen events are introduced to the equation making it more expensive and involved than anticipated. Forwarders send RFQ’s on assumptions over crucial details that are often left out in the initial pricing request. That means vendor selections are made over pricing with missing information, much of which may be entirely specific to your shipping process. Therefore, you might be choosing the “cheapest” rate on paper, but unexpected costs down the road can leave you burned by your decision.

Freight forwarders are not meant to be a price tag. They are meant to be a source of value and industry expertise. The right partnership is about finding the best solutions and dynamic in your business partnership – not just how much a shipment is going to cost according to an assumed estimate on paper.

Contracts

Contracts can sometimes be a great option for shippers. But they can often lead to locking yourself into a bad deal. When signing into a contract, the attempt is to reduce volatility in rates, which unfortunately means sacrificing potential cost savings from the spot market.

You may be eligible for a contract depending on the frequency you ship, but make sure you really know what that entails. Businesses who are barely big enough by volume standards for a contract with large freight forwarders usually end up paying more than expected. Contracts usually have minimum shipment counts that must be met in order to avert fines. Failing to meet those counts can result in hefty expenses. Companies with low shipment counts may be given contracts with terrible rates. Before jumping into a contract, make sure you are not getting yourself into a bad deal.

Switching Process

Switching is not about making a decision- it’s about making a discovery. A discovery regarding what your company truly needs from a partner.

Look at what you have been burned by in the past and use that as a guide for your future vendor selection. Sometimes minor behaviors upfront can be indicative of larger problems a particular vendor may have. For example, how long a freight forwarder takes to return an RFQ, their attention to detail, and how well-formatted they make the quote can give you a clear glimpse into what their communication and operations processes might look like. Benchmark these behaviors against those of other vendors and use your past experiences as a litmus test to gauge which vendor will be best for you.

Do Your Research

The best transportation vendor will not magically appear. Thorough research and evaluation needs to be done to ensure you will not end up with the same results. Consider some of these questions when researching: How are they different from other vendors? What do they take pride in? Do they demonstrate accountability? Does the vendor have actionable solutions to fix my frustrations?

Communicate Expectations

Communication is key when deciding on a vendor.

With all the components that go along with the shipping process, a vendor who can meet your communication standards is vital. Being specific and right to the point about what is expected sets standards high for vendors and makes accountability possible. Receiving excellent communication is as important for your company as it is to your vendors. Being on the same page is imperative for a good business relationship.

Our team at InterlogUSA surveyed hundreds of companies and found out that 65% have frustrations with their current forwarders. Two out of the four most common industry burns we found were undeclared expectations and transactional surprises. We understand the significance communication and met expectations are between businesses and their partners. So we created solutions for these frustrations with our Interlog SHIELD Protocol.

Get Accurate RFQ’s

If you still believe that an RFQ is completely necessary, make sure it includes all details necessary to offer a quote. Make sure that you ask your forwarder what details they need for better accuracy on quotes. Forwarders will often submit an RFQ based on assumptions of critical variables. Depending on your shipment practices, rates can fluctuate greatly. Being specific about frequency of shipping, type of product, shipping mode, transit time needed, incoterms, and other variables improve the accuracy of a quote.

Keep in mind that RFQ’s help find the most cost-effective vendor to select, but it is not always about the price they offer.

Make a Discovery

After researching and communicating with all possible vendors, it is time to evaluate which one benefits your company the most. Think about the frustrations you have with your current vendor, and analyze the new pool of vendors for which one solves those frustrations.

This is an important step. Before selecting a vendor, make sure you exhaust all possible areas of improvement to select the best business partner for you. As much as everyone wishes the cheapest vendor could accomplish all their expectations, it’s almost never the case. Think about which will meet your communication standards, stay accountable to your expectations, and offer the best rates after all is said and done.

Conclusion

If you feel stuck, switch again. Don’t settle for a vendor that causes frustrations. With enough research and comparison, you can find one that solves your most commonly experienced problems. RFQs are not always the best way to go when deciding on a vendor. It is important to consider a vendor’s customer service, communication, business practices, and proof of accountability for their own actions.

Our team at InterlogUSA would love to talk and answer any questions you have!

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