Why Freight Audit RFP’s are a waste of time

February 24, 2015 - 16:13

Many companies put together RFP's for Freight Audit & Payment. Unfortunately RFP's do exactly the opposite of what they should do as the RFP process becomes an event on itself and creates a distance between the issuing company and potential providers. Companies think up a lot of rules and strict procedures around it and get lost in their own process swamp. Have you ever experienced a company sticking to its own self-imposed deadlines regarding an RFP/RFQ or even an RFI? Exactly. Below are some points that you may want to take into account before you get all excited when a 20 pager full with detailed questions lands in your e-mail box.

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RFPs are appropriate for commodity goods and services only

Freight Audit is a complex matter and it concerns outsourcing or creating new processes on an ongoing basis for a long period of time. Interaction on different levels is needed on an ongoing basis and customization of data, processes and KPI's come into play.
This fact alone should preclude any responsible professional from answering an RFP because the above cannot be taken into account via an RFP. What's more, asking for a bid in this way is a clear indication that the company regards Freight Audit as a pure commodity. Also, by using an RFP the company is asking for your commitment before both of you know anything about the other...and that's just plain dumb.

An RFP puts the cart before the horse. RFPs are typically voluminous and filled with information that is irrelevant to a first step. It, therefore, embodies a waste of effort and reflects poorly on the potential client's company.
An RFP indicates the potential client doesn't understand professional relationships. Professional relationships are built on mutual responsibility and respect. An RFP demands strictly one-sided responsibility (from the "vendor") and indicates a measure of slight regard. It also indicates that the potential client is mostly interested in maintaining control of the project rather than allowing the provider to bring their skills to bear for the client's benefit. It is unlikely that the client or the client's staff is practiced at to a reasonable extent to run Freight Audit projects, so it is unseemly and irresponsible of them to attempt to seize control from the beginning.

RFP's do not serve Freight Audit -Procurement Solutions

An RFP places emphasis on the wrong things. RFPs invite competition, not suitability. An RFP basically asks, in spirit or in plain text, that you dazzle the potential client with bullshit.... in combination with the lowest bid. None of this has anything to do with your getting to know one another, or anything else that makes for a successful project.
Delay is always a good measure of the failure of an RFP. Often the RFP process turns out to be delayed, as it tends to get more complex or takes more time to review. This also has to do with the fact that many companies copy and paste questions from previous RFP's they have done or from other companies. Often they do not understand the impact of their own questions or do not understand the relevancy or irrelevancy of certain questions. They only really start to think about Freight Audit when they are in the middle of the process.
Pricing is all they remember. You chew on this RFP for an average of 20 hours together with colleagues to make sure all the answers are detailed enough and spend time on the technical details, process descriptions, insurance policies, backup plans, compliance, and all the other detail but guess what? After the typical delay of the project, the people return back to the table and look again at the different providers and do you think they remember how great your systems are, what unique feature you offer? No, they only the price.

So the RFP process is effectively a process to buy at the lowest price without too much understanding of what the supplier really can offer. That is a big risk, as they tend not to have a good understanding of the concept to buy Freight Audit.

Pieter Kinds
Director Business Development ControlPay
Twitter:@Freightpayment