Avoiding the tender season crunch: strategies for smarter, faster sourcing events

Tender season is a pivotal time for logistics and shipping professionals, significantly influencing market dynamics, pricing strategies, and operational planning. Yet, it's also frequently associated with stress, excessive workload, and inefficiencies. By adopting smarter, faster sourcing strategies, procurement teams can avoid the common pitfalls associated with tender season, turning this high-stakes period into a competitive advantage.

Tender Season Defined

Tender season is when organizations in the logistics and shipping industries negotiate crucial transportation rates and contracts. Typically falling between late Q4 and early Q1 for major shippers and throughout Q1 for medium-sized companies, these events set the tone for freight rates and capacity availability for the year ahead. Smaller companies often engage slightly later, allowing the market's major players to establish benchmarks before stepping in.

However, traditional tendering methods, characterized by inflexible annual contracts and cumbersome manual processes, struggle to adapt to today's rapidly changing market. Procurement teams can no longer rely on outdated processes from a decade ago, as these do not reflect the realities of today's market conditions.

Smarter Sourcing through Optimization

Strategic sourcing during tender season should prioritize high-volume lanes to maximize efficiency and cost savings. Adopting sourcing optimization techniques is key. Optimization is a powerful tool that allows procurement teams to evaluate multiple scenarios simultaneously, incorporating various cost and non-cost factors to swiftly make informed decisions even with complex bid data.

Sourcing optimization ensures that businesses not only achieve immediate cost savings but also better manage risks, improve service quality, and maintain flexibility. This structured, analytical approach simplifies negotiations, reducing the burden on procurement teams and helping secure more favorable terms.

Faster Sourcing via Automation

Manual processes remain one of the biggest challenges during tender season. Frequently, large Request for Proposals (RFPs) include thousands of lanes, creating inefficiencies and draining resources. This approach often results in wasted time for both carriers and shippers, particularly when managing smaller, one-off shipments.

Solutions like Keelvar's Autonomous Sourcing offer significant improvements by automating routine sourcing events. Autonomous Sourcing quickly and competitively secures rates for smaller shipments through focused, automated events. This method ensures better carrier attention, competitive pricing, and a reduced administrative burden, enabling procurement teams to focus on higher-value strategic tasks.

A Five-Step Guide for Efficient Tender Planning

1. Detailed Analysis: Start by clearly understanding your shipping needs – types of goods, shipment frequencies, and special handling requirements.
2. Carrier Selection: Identify both existing and potential new carriers. Stay informed on market trends to select the best candidates.
3. Carrier Allocation Strategy: Develop a comprehensive carrier allocation plan considering primary routes, customer needs, and operational capabilities.
4. Clear, Comprehensive RFP: Clearly articulate transport requirements within a structured, straightforward RFP. Transparency will drive more precise, actionable bids.
5. Efficient Implementation: After tender completion, promptly finalize carrier selections, negotiate contracts, and implement results quickly for seamless partnerships.

Leveraging Advanced Tender Management Tools

Integrating specialized sourcing optimization platforms such as Keelvar significantly enhances tender management. Keelvar’s platform provides advanced analytics, automation, and scenario-building capabilities, enabling procurement teams to:

• Execute events rapidly and at scale.
• Analyze bids comprehensively, considering both price and non-price factors.
• Streamline communication with carriers, improving process acceptance on both sides.
• Continuously adapt sourcing strategies based on real-time market insights, ensuring agility and responsiveness.

Future-Proofing Tender Strategies

Although annual RFPs remain relevant, their role is evolving. As Dylan from Keelvar aptly notes, “The annual RFP is not dead. Long live the annual RFP. We're just changing the positioning of that RFP.” 

Procurement teams equipped with the right strategies and advanced tools are positioned to not just manage tender season efficiently but also proactively seize market opportunities. The key lies in embracing smarter, faster sourcing methods, transforming tender season from a period of crunch to a time of strategic clarity and business advantage.