Dedicated Freight this RFP Season

What does RFP season mean for those looking for dedicated freight?

2022 Review

2022 was a year of highs and lows. Pricing peaked and dropped all within a calendar year. It’s all catching up with us.

We’ve heard time and time about the lag and supply chain disruptions, but what does that mean for those trying to find dedicated freight?

Early this year it might have seemed impossible to enter the industry as a carrier and find dedicated freight. Now, things are starting to shift and shippers are taking note.

For those who came in and tried to make a quick buck during peak pricing, those of us who were in the market pre-pandemic can see you scrambling. What’s happening?

Increase in used equipment sales as small fleet and owner-operators shut down or sell equipment
Re-distribution of drivers from for-hire fleets to private fleets
Ease in driver recruitment as drivers look for new employment opportunities
Shift in talent as driver capacity is redistributed (more experienced drivers available)
Increased capability for established trucking companies.

the re-birth of rfps

If you suspect that we may be moving from more frequent RFPs with shorter contract terms, you might be right. RFPs have increased as we approach the new year, more than they have in recent years. Will everything move back to the annual RFP and contract? Time will tell.

Shippers adapt pricing strategies and will be looking to make-up losses from previous years. With many forecasting we will slowly start seeing traditional freight seasonality again (and maybe actually having a true produce season), shippers are ready to set pricing again hence the ‘re-birth’ of RFPs.

getting and maintaining dedicated freight

Pricing events are best for finding dedicated freight. Your sales team will have to know their stuff in order to sell past the rates and leverage service, experience, and your operations team.

Obtaining dedicated lanes looks a lot like maintaining them. Service is key.

OTP/OTD
Communication
Top-notch service

Whether you know it or not (and we suggest you find out), you have a reputation with shippers. You must deliberately build that reputation through service.

dedicated freight: pricing influence

Transportation is all about forecasting. It’s hard to forecast if you do not have consistent volume.

The biggest subject for forecasting is pricing. If you are only seeing 1% of a shipper’s freight, you do not have much influence on pricing. If you are working with 20% of a shipper’s freight, you hold greater influence. Let’s zoom out and think about the entirety of freight moving in the U.S. today:

Where is pricing coming from? Spot v. contract
How is driver capacity distributed? Private fleets or for-hire fleets
What’s the diversity of the transportation network? Assets v. brokerages v. full-service 3PLs

You have to think about where you are positioned and overall market share.