In logistics planning, success often hinges on one key factor: securing the right carrier to deliver your goods on time. Early tendering—a proactive approach to offering shipments to carriers—can improve first tender acceptance and bring significant freight management benefits like cost savings and improved OTIF (On-Time, in full) performance. Let’s explore how early tendering transforms freight management and why it’s essential for your supply chain strategy.
Understanding the Tendering Process
Once the routing guide is set, the shipper may request that the top-ranked carrier move the product on the lane for any given pick-up day. This requesting a carrier to move a load is called the tender. That carrier can choose to accept or reject any load. If they decline, the next carrier in line (by preference) gets the offer. This next carrier is generally more expensive and/or has a worse on-time record. There is a time element here, too. The back-and-forth process with carriers can, in itself, generate service delays.
So, how can shippers boost first tender acceptance and secure their preferred carrier? The answer lies in early tendering.
Early Tendering: A Solution for Freight Management
Early tendering gives carriers more days of notice and certainty about upcoming shipments, increasing the likelihood of first tender acceptance. For example, replenishment shipments—usually planned 2–3 days in advance—benefit greatly from the additional day(s) of notice. However, timing matters:
- The more notice the preferred carrier gets the higher the probability of them accepting the load (first tender acceptance). BUT
- Often, the decision of what should be on the load is made before tendering the shipment. The more days this decision occurs before any replenishment shipment, the less information the supply planner has to make a good decision – a decision that provides high order fill with the least inventory. If it was possible to wait longer before determining load composition, there is a higher probability of transferring the correct stock. i.e., there is more complete information about orders, inventories at the receiving site, and product availability at the shipping location.
Why Carriers Decline Shipments Despite Routing Guides
Many shippers use an annual bid process to select carriers based on cost and service, assigning them to a routing guide in order of preference. However, they might decline even when you tender a load to your top-ranked carrier. Here’s why:
- Insufficient Lead Time: Trucks are often pre-committed, leaving no capacity for short-notice shipments.
- Demand Exceeds Supply: A carrier may not have enough trucks to meet the daily demand, particularly if volumes fluctuate significantly throughout the week or year. (See diagram to the right)
- Economic Shifts: Carriers may prioritize more profitable opportunities, making it uneconomical to fulfill your shipment.
While strong carrier relationships help, operational bottlenecks like these frequently pose challenges.
How ProvisionAi’s LevelLoad Enhances Early Tendering
ProvisionAi’s LevelLoad revolutionizes early tendering by combining advanced AI with data-driven insights to drive early tendering, better timeliness, and improved customer order fill. Here’s how it works:
- Forecasting and Planning: LevelLoad calculates daily truck needs using supply planning data for the next 30 days.
- Optimize the Flows: LevelLoad factors in storage limits, site throughput capabilities, carrier costs, and trailer availability to provide a network-wide plan for carrier requirements over the entire time horizon.
- Dynamic Tendering: Provides carriers with confirmed tenders for a given date – say 5 days in the future.
LevelLoad separates tendering from load content decisions, allowing shippers to optimize what goes on each truck closer to the shipping date with the help of its sister software, AutoO2.
Key Benefits of Early Tendering for Shippers, Customers, and Carriers
Early tendering, powered by LevelLoad, delivers measurable improvements across the supply chain:
- For Shippers: Lower freight costs, reduced shipment volatility, and fewer disruptions in daily operations. Teams spend less time firefighting and more time focusing on strategic tasks.
- For Customers: Improved OTIF performance ensures higher order-fill and timely deliveries, enhancing customer satisfaction and loyalty.
- For Carriers: This is a game changer – providing an effective way for them to reduce operating costs because better predictability reduces deadhead miles and increases operational efficiency.
For instance, with these strategies, Kimberly-Clark achieved “millions” in transportation savings alone. Let’s take a closer look at that. Using the LevelLoad technology, Kimberly-Clark could tender shipments 2.5 days earlier. Earlier tendering is achieved using LevelLoad’s reliable, automated technology. Before any staff start work in the morning, LevelLoad has already created the optimized plan and submitted the results for tendering. So by 6 AM on a Monday, carriers know the loads they should handle on Friday.
Early tendering also creates significant benefits for sustainability. Environmentally conscious shippers want to use carriers that are also environmentally conscious. Often, this revolves around using EPA SmartWay-certified carriers. Unfortunately, many “spot market” truckers are often not SmartWay certified.
Ebook: Kimbler-Clark Optimizes Transportation Case Study
Transform Your Logistics with Early Tendering
For years, carriers were excluded from long-term supply chain capacity planning, resulting in inefficiencies and missed opportunities. Early tendering, supported by advanced solutions like ProvisionAi’s LevelLoad, reintegrates carriers into the planning process, transforming freight management.
Early tendering isn’t just a logistics strategy—it’s a game-changer for digital transformation. By integrating carriers into supply chain capacity planning, freight managers can improve efficiency, cut costs, and enhance customer service. With tools like LevelLoad, early tendering is a must-have for any forward-thinking organization.
