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As temperatures drop and leaves turn orange, those of us in the shipping logistics industry know that it’s once again time for tender season.
What is tender season?
Tender season refers to the time when most shipping companies send out “requests for tenders” (RFTs), also called “requests for prices” (RFPs), to carriers and shipping service providers. Thus begins the process by which shippers hope to create a dependable supply chain for their business for the coming year.
Securing shipping lanes with reliable carriers is a fundamental key to success for shipping companies. However, managing RFTs for hundreds or thousands of lanes with multiple carriers can be a long and painstaking process. It can also lead to frustration if awarded tender agreements end up failing.
In this article we will shed some light on tender season and assess some common problems that come up during the process. Hopefully these insights will help to make your tendering process smooth and successful.
Where to mark tender season on your calendar
For most, tender season overlaps with peak transport season, starting in mid-August and continuing through the end of the year. Some shippers even continue their process until February. A second tender season typically occurs in June and July.
Tender season scheduling can vary from company to company as each shipper works according to their own calendar. The season may be aligned with vacation schedules as well as business budget schedules. It’s a big part of preparing for Q1 in the coming year.
Some companies spend a lot of time on their tendering process, doing multiple pricing rounds a couple times each year. Others keep it as concise as possible.
“If a company prepares their papers and forecasts effectively before summer holidays, then they can start tendering in June to finalize their contracts for the next year in Q3 or 4,” says Vasi Savin, sennder’s senior manager of tender management.
Tender season presents a variety of challenges
Freight pricing has always been variable, and in recent years it has only become harder to predict. Now more than ever, pressure in the supply chain is creating a volatile market where predicting the price to ship freight months in advance is increasingly difficult.
This can cause problems for shippers and carriers, which tend to negotiate rates for shipping services up to a year in advance.
One part of the problem begins with carriers, brokers, and the level of competition inherent in the tendering process. Some service providers may bid low to win business from their competitors, but end up declining freight when market rates rise and they are able to earn better rates on other loads. Unfortunately, this results in undelivered loads and broken trust between shippers and carriers.
Since dropped loads are not uncommon, shippers spend extra time and effort securing contingency plans. This can be costly in terms of time and resources. It can also result in an inability to meet their primary commitments.
These two problems feed into each other and can create a negative feedback loop in which trust on both sides is eroded. In a worst case scenario, the entire tendering process may amount to wasted effort.
sennder helps shippers plan for unpredictability
You need a wealth of data to forecast next year’s freight shipping market. Without an accurate forecast, it is next to impossible to create a dependable supply chain.
For this reason, trust in data is one of sennder’s core values. By collecting data from thousands of carriers and leveraging a fleet of 40,000+ trucks across Europe, we can be confident in the rates we offer, and the dependability of service we can provide.
Better yet, many big and small shippers who work with us ultimately find that sennder can serve as a one-stop shop for their full-truck load (FTL) shipping needs.
Learn more about tendering with sennder
For more tips on navigating tender season, stay tuned for our next blog on solutions for the tender season.
If you need answers now, you can always get in touch with our team.
Contact us with your tenders to see how sennder can make shipping easier.
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