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How To Achieve Better RFP Preparation for Ocean Freight Negotiations
Importers - RFP Preparation for Ocean Freight Negotiation

It's that time again to plan for next round of ocean freight negotiations. Your import ocean rates expire in April-May next year.

Should we go to market based on known trends, or expected changes rates, volumes or lanes. We have to make a decision soon, because the RFP Tender planning and preparation cycle is 8-10 weeks in a the formal RFP Tender cycle.

How to prepare for Ocean Freight Negotiations? How do we negotiate the best transportation pricing?
Let's have a look at what resources we have available:-
* First and foremost the industry intelligence. What is the market saying?
* Internally, what is happenning to our ocean freight volumes and lanes?
* Are we likely to get better rates due to increased volumes, market shifts?
* Do we make a strategic shift in preferred carriers?
* Shall we negotiate an extension of the curerates?

All of these issues and more should affect your decision. Only to be complicated by the kinds of solutions you have to accommodate either processes.
Do we have an in-house built solution, a simple spreadsheet or access to a third-party's solutions for:

Transportation Procurement
To prepare for a formal RFP tender it requires major decision support capabilities to analyze and process:
* carrier quotes;
* target rates;
* countering
* multiple rounds;
* service/price criteria;
* scenarios and analytics.
* nominations and awards

Rate and Contract Management
Do we have the ability to easily update rates and surcharges?
* extended or renegotiated by these variables: by carrier; by contract; by mode; by trade lanes; and by spot quotes.

All of the above capabilities and functions dictate whether you expect a significant change or gain in rates that is not offset by the cost of updating or negotiating new rates. While the resources expended in this process can be significant, they should be offset by the savings or cost avoidance as a result of your efforts. You will probably have no additional resources yourself do these projects. By now you're getting used to the demands on your time as a logistician. It is very easy to compare 2 to 4 person-weeks of costs spent against the amount of savings or avoidance through using tools specifically built for transportation management function.

If I have gained your attention why not ask for a look at Freightgate's Procurement and Rate Management Solutions. Get more Competitive Now. Take a Demo and Compare:

Gary Chisamore the author, is the VP of Business Development at Freightgate and a 40 year veteran of the Logistics, Supply Chain and International Trade sectors.

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RE: How To Achieve Better RFP Preparation for Ocean Freight Negotiations
12/1/16 5:31 PM as a reply to Gary Chisamore.
Very well explained Mr. Gary Chisamore, Sea or Ocean carrier contracts are very complex. Just to add up, it is the shippers responsibility to do their homework and ensure the success of negotiations. Some key considerations to have a better freight negotiations are:

1. Its not just about the price. When picking carrier, shippers must be able to consider the access to capacity, specifically in peak season when they move more cargo than normal or usual.

2. Know what you really need. Shippers must be able to understand how the cargo fits in the carrier service patterns.

3. You must know your carrier. Shippers must have a full knowledge of the profile of their providers and must be able to understand their strength and weaknesses.

4. Willing to compromise if necessary. The shippers must know what service elements are the most important and wherein their is a room for flexible negotiations.

these are many factors out there but these are some that are very effective.

BR International Freight Forwarders USA to Australia Provider
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