An effective 3PL Request for Proposal

Posted January 6, 2020

In Business, Business & Data, Freight, Supply chain & Logistics, Supply chain & Logistics, Trucking, Trucking

What is a 3PL Request for Proposal or RFP?

An effective RFP process is essential to the development and continuity of successful shipper-3PL relationships. A 3PL Request for Proposal (RFP) is a business document created by a shipper to announce and provide details about a logistics project. Through a Request for Proposal, the shipper solicits bids from 3PLs who will help complete the project. A rigorous Request for Proposal (RFP) process helps shippers effectively communicate their needs and the desired outcome to prospective 3PLs.

Key players involved in the Request for Proposal Process

From the shipper’s side:

The shipper’s procurement and operational management teams

From the 3PL’s side:

The 3PL RFP, Business Development, Sales, Tender and Solution Design teams.

Key elements for a 3PL Request for Proposal

A well-written RFP helps logistics providers understand their role, identify solutions and project accurate pricing. A 3PL Request for Proposal should include:

Problem overview
Overview of the services required
Specific business requirements
KPIs
Proposal guidelines
Due Date
Selection Criteria
Method of questions and clarifications
Single Contact Point
Pricing and cost breakdown specifications
Terms and conditions
Response method

The Request for Proposal process

The Request for Proposal process consists of the following steps:

1-Shipper issues a Request for Proposal

2- 3PL providers review and decide to respond to shipper’s Request for Proposal.

3- 3PL providers send a proposal

4- Shipper evaluates the 3PLs proposals

The 3PL provider presents a proposal and the shipper evaluates if that proposal meets the requirements and represents a suitable solution to the problem.

Checklist:

Proposed solution

Is aligned with the problem the shipper is trying to solve?

How long is it going to take to implement it?

Is it based on facts?

Proposed price

Does it compare to the planned budget?

Terms and conditions

Does the proposal meet the terms and conditions and specific requirements of your company?

Skills and Abilities

Is the provider qualified?

References

What is the 3PL’s reputation?

5- Shipper and 3PL Services providers negotiate and discuss the proposals

6- Shipper awards one 3PL provider and they sign a contract

7- Shipper evaluates performance and gives feedback to drive to continuous improvement.

The key to a successful RFP process

Effective communication between Shippers and 3PL providers is central to a meaningful Request for Proposals process. The 2019 23rd Annual Third-Party Logistics Study: The State of Logistics Outsourcing by C. John Langley Jr., Ph.D., and Infosys, 2019, study reveals that “Although 86% of 3PLs agreed that they diligently deal with their pipelines of bids, RFPs, and tenders, only 65% of shippers agreed that 3PL responses to RFPs, bids, and tenders are consistently prepared on-time and in full, with feedback and buy-in from the 3PLs’ supporting functions.” There is a need to improve communication and data sharing during the RFP process.

Tips to maintain effective communication during a RFP process

Be specific and clear on the outcome expected
Communicate the method of questions and clarifications to the 3PL Service Providers
Assign a single contact point
Make sure you share all data needed by the 3PL to create a meaningful proposal
Answer all questions timely

Sources:

Click to access ministry_rfp_guide.pdf

2019 23rd Annual Third-Party Logistics Study: The State of Logistics Outsourcing,” C. John Langley Jr., Ph.D., and Infosys, 2019.

Marben Acosta Terán

Marben Acosta Teran oversees the overall international B2B marketing strategy for Mexicom Logistics. She is passionate about building a solid brand while creating useful content for its audience. Marben loves learning more about the industry and being part of the Mexicom family.