Spot rate tendering

Spot rate tendering

As discussed in an earlier article (link) spot rates make up a large portion of the traded freight volume. Many industries that have irregular demand or a high degree of variability in their flows often rely on spot tendering for their transportation needs (As a small recap: we consider spot tendering as all freight that is bought outside of long term contracts or agreements). Although spot rate tendering brings flexibility to the operations, spot rate bookings are considered more demanding in the organization then pre-tendere freight. Comparing both processes, as is shown in the chart below:

The process of sending out the requests to the potential partners, the collection and benchmarking of these bids and the communication on whether or not a bid is won is often managed by mail and phone. Let alone the administrative overhead, this process is prone to errors and frustrations. 

To overcome this, Transmate has improved its spot rate request system to better support the spot rate collection process. Automating the notifications that are being send out to the bidders, triggering alerts on closing price requests and calculating the offers versus historic and theoretical rates. 

The platform offers:

• Spot rate requests as part of the Transmate TMS

• Spot rate requests as integration service for ERP’s

• No touch rate requests as integration service for ERP’s

For processes that require human interaction, the platform has an interface to track incoming bids and benchmark these versus the theoretic and historical costs. For fully no-touch price requests, the service returns the best fit carrier based on business rules without human intervention. 

The process

The interfaces are simple and the proces flow straightforward. Once the shipment data is available a user can set up a request and submit in minutes:

As indicated, this whole process can be automated. Shipments that are received through API (or EDI) can automatically set up a price request and select business partners based on previous enquiries or business logic. Finding similar bids in order to retrieve best fit carriers uses Transmate geo api that parses shipment lanes and matches these with similar lanes in our database. Optionally, the bidding options can be configured: 

• Allow bidding in different currencies

• Allow a bidder to add new charges or should he adhere to a predefined template

• Allow a bidder to add comments

• Set bidding template

• Bid closure time

• And more...

After reviewing the request, it is ready to be sent out. The partner selection allows to manually select partners or can be automatically generated. After sending out, the partner contacts will be notified. In the partner overview you can track the successful delivery of the mails, email clicks, the fact that the partners have viewed the request and have placed an offer.

Analyzing data

Transmate analyses the bids alongside and enriches with historical bids and our own cost model to benchmark the prices.

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The analysis plots the lead-times alongside the prices and give an overview per shipment and per carrier for both lead time and price. In the detailed overview the offers are shown alongside the transmate theoretic cost model and similar bids from the past. All costs can be benchmarked based on cost, lead-time, cost per km or cost per km and tonnage.

Allocation 

Shipments can get allocated directly in the analysis tab or in the shipment tab. The transmate system automatically notifies all parties involved in the spot tender. Also the allocation performance and bid performance of each partner is tracked and can be consulted in the online reports.

Automation

Transmate offers automation possibilities ranging from a complete no-touch spot request to assisted spot request or fully controlled. 

A no-touch spot rate request fulfills all steps without intervention: an order gets in from ERP and Transmate selects, sends, collects and assigns based on business rules. The result can be returned to the ERP system alongside with offered costs.

Assisted spot rate requests will automatically assign best fit partners based on either historical requests or business rules, and allow the user to manually select the appropriate partner

If a user wants full control, this is available in the platform interface and helps the planner / purchaser to send and collect all information.

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Want to learn more? Connect with our sales to get a demo