Phase 1: Data Collection and Analysis (Weeks 1-3)
Shipper responsibilities:
- Export 12-24 months of shipment history
- Define must-have vs. nice-to-have service requirements
- Advise which carriers to exclude from the sourcing event
- Sign an RFP Authorization Form
Expected TLI transportation sourcing event outcomes:
- Clean and categorize data by mode, lane, and service type
- Calculate current cost per mile, cost per pound metrics
- Document service failures and operational constraints
- Clear understanding of lane density and volume patterns
- Baseline cost structure for benchmarking RFP results
- Carrier performance history for incumbent evaluation
- Service level requirements documented for bid specifications
Phase 2: RFP Design and Carrier Selection (Week 4)
TLI builds a comprehensive bid packages that include:
- Executive summary of your business and shipment volume projections
- Detailed lane-level data with origin, destination, volume, weight, PCF
- Service requirements and operational expectations
- Technology integration requirements (EDI, API, TMS connectivity)
- Proposed contract terms, payment schedules, and cargo liability requirements
- Performance measurement criteria and quarterly review process
Carrier selection criteria:
- Geographic coverage matching your lane network
- Service capabilities aligned with your commodity requirements
- Financial stability and safety ratings
- Technology compatibility with ViewPoint TMS
- Cultural fit and relationship history
Avoid the temptation to include every available carrier. Focus on 15-25 qualified carriers for truckload RFPs and 4-6, per location, for LTL contract management to ensure meaningful participation without overwhelming your analysis.
Phase 3: Bid Submission and Clarification (Weeks 5-6)
Best practices during bid evaluation:
- Require standardized response formats for apples-to-apples base rate comparison
- Conduct carrier Q&A sessions to clarify requirements
- Customize accessorial sheets
- Request contracts and service level agreements
- Build rated scenarios using historical data
- Verify fuel surcharge formulas and accessorial rate schedules
- Ask carriers to explain their pricing methodology and assumptions
Red flags that we watch out for:
- Rates significantly below market that signal unsustainable pricing
- Vague accessorial language that creates billing surprises
- Unwillingness to commit to performance metrics
- Complex fuel surcharge formulas that hide margin
- Contract terms heavily favoring carrier protection over service
Phase 4: Scenario Modeling and Optimization (Week 7)
This is where strategic freight contract optimization separates from simple bid analysis. TLI does not just compare carrier rates line by line, instead we model how different strategies impact total transportation spend.
Run scenarios including:
- Single-carrier awards per lane for maximum volume commitment
- Dual-carrier awards providing backup capacity and competitive pressure
- Regional carrier mixes optimizing for coverage and cost
- Service tier analysis (guaranteed vs. standard LTL pricing)
- Fuel surcharge sensitivity across different DOE index scenarios
Use historical shipment data to calculate total program cost under each scenario, accounting for:
- Base freight rates
- Fuel surcharges at various price points
- Expected accessorial charges based on past patterns
- Tender rejection costs and spot market backup
- Technology implementation and ongoing management costs
Phase 5: Negotiation and Award (Weeks 8-9)
Armed with scenario analysis, enter negotiations with clear targets. Remember that TLI’s freight contract negotiation isn’t about squeezing carriers to unsustainable levels, it’s about finding pricing that works for both parties.
Negotiation tactics:
- Share aggregated rate benchmarks (not individual carrier bids)
- Request final and best offers only after clarifying mutual expectations
- Negotiate volume commitments with corresponding rate improvements
- Address accessorial rates as aggressively as base rates
- Secure contract terms that allow quarterly performance reviews
Our award communications include:
- Volume projections by lane for awarded carriers
- Clear timeline for contract execution and implementation
- Technology integration requirements and testing schedule
- Performance expectation documentation
- Onboarding process for new carrier relationships
Phase 6: Implementation and Performance Management (Weeks 10+)
Signing contracts represents the beginning of freight contract management, not the end.
30-day implementation checklist:
- Load routing guides into TMS with correct carrier prioritization
- Complete EDI/API testing and backup communication protocols
- Train operations teams on new carrier contacts and procedures
- Setup automated GL Coding and cost center management
- Establish weekly check-ins with newly awarded carriers
- Set baseline performance metrics for comparison
Ongoing management requirements:
- Weekly KPI reporting on tender acceptance, on-time performance
- Monthly invoice audits comparing actual charges to contracted rates
- Quarterly business reviews based on the carriers results
- Annual rate benchmarking and mini-bid events for underperforming lanes
- Continuous communication about volume changes and service issues