While RFPs can be a great way to gather additional information on logistics companies and receive competitive bids from a number of companies, they can also have the potential to become a colossal waste of resources for both your company and the 3PL providers participating. In fact some logistics companies will not even participate in exhaustive RFPs; this is particularly true for companies that are known for issuing yearly benchmarking exercises.
If you are going to issue an RFP consider limiting the distribution to only 3-5 companies. By doing extensive preliminary research select which providers will fit your needs and then consider issuing a succinct Request for Quote to these select companies. Need to find out more information on companies? Review their website, visit trade magazine sites and directories and then contact the companies electronically or give a business development or sales rep at each company a call to really understand each logistics providers strengths and unique service offerings.
Before making those initial contacts make sure you understand your program inside/out and in great detail. Every company is different so it’s important to give your 3PL a good idea of what your program looks like and how it runs. Usually the more information you can provide the better the rates will be because it limits the amount of assumptions that need to be made in the engineering/pricing process. Here are number things that 3PL providers would typically like to know that will enable them to generate a proper quote.
- Product(s) Description
- Average Monthly Inventory: # of pallets/skids/rolls; # of cases
- Average case weight
- Average cases per pallet
- Average SKUs in inventory
- Product Stackability
- Pallet Dimensions
- # of inbounds received per year
- # of outbound orders per year
- Are the shipments coming in on rail, truck, LTL small parcel?
- Locations/Lanes for shipments/pickups
- Technology requirements: EDI, RF Scanning, RFID?
