The annual freight rate contract negotiation process is underway, and it is imperative that shippers fully evaluate their carrier options, utilizing knowledge of historical changes and past performance in their trade lanes. The complexity of freight rate contracts places a strong burden on shippers and NVOCCs to comprehensively understand the proposed rates and surcharges, including any exclusions or exceptions.
Reconciling all of these factors in the carrier rate selection process is a difficult objective for both the partners receiving RFPs to quote, and those reviewing responses. In addition, understanding the carrier's historical on-time performance for a lane is a key factor in deciding whether to award the carrier volume for that lane.
So, how do you ensure your global shipments are contracted with a cost-effective and reliable provider? How do you quickly and accurately quote lanes in an RFP or analyze the response to an RFP? When seeking answers to these questions, shippers and NVOCC's should consider the following as imperatives for managing carrier freight rates.
1. Standardize and centrally manage carrier contracts
Carrier contract formats and verbiage regarding the conditions for applying tariff surcharges vary greatly. Converting various textual contract formats into a standard structure, where services can be easily compared across carriers, enables a solid foundation for centralized management and cost comparison. What this means for your company is a simplified and more efficient process for accessing accurate, fully calculable surcharges and rates to identify the best options.