Freight Tender

Freight Tender: Annual tender in which a shipper bundles its plannable transport volume and agrees fixed prices for many lanes at once.

A freight tender, also called an annual tender or contract tender, is the big sibling of spot tendering. Instead of requesting a quote for a single shipment, the shipper awards its entire plannable volume for a fixed period, usually one year. Forwarders do not bid for one job, but for all lanes, volumes and services described in the tender.

How is a freight tender structured?

The heart of a tender is the rate structure. It defines the combinations for which forwarders must quote a price:

• Lanes: where goods are transported from and to, for example from postcode area to postcode area.
• Tiers: prices by weight, pallets or loading meters, so that small and large shipments are priced fairly.
• Services: for example full truckload, part load or special requirements.

These building blocks make up the rate sheet that every forwarder fills in. An extract could look like this:

In a real tender, hundreds of lanes and thousands of individual prices quickly add up.

How a freight tender works

1. Analyse volumes: Which lanes are served and how often?
2. Define the rate structure: lanes, tiers and services.
3. Invite forwarders and have them fill in the rate sheets.
4. Check the bids: Are all prices complete and plausible?
5. Compare award scenarios and select the partners.
6. Sign contracts for the agreed period.

Plausibility checks: catch errors before they get expensive

Typos happen in large rate sheets. A forwarder accidentally enters €8,900 instead of €890 for a lane, or a cell is left empty. In a spreadsheet with thousands of prices, this is easy to miss and distorts the entire comparison. A plausibility check detects such outliers, for example because a price is far above the other bids or a smaller tier is more expensive than a larger one.

Practical example: award scenarios

Why do freight tenders often take so long?

The effort rarely lies in the decision itself, but in getting there. When bids arrive as spreadsheets by email, they have to be merged, checked for errors and brought into a comparable format. Follow-up questions to the forwarders come on top. With many lanes, this takes weeks, and every further negotiation round starts from scratch.

Common mistakes in freight tenders

• Including too many rare lanes. Lanes that are served only a few times a year hardly bring better prices in a tender, but make it large and hard to manage. They are usually better placed in spot tendering.
• Stating unrealistic volumes. Forwarders calculate with the volume you give them. If the actual volume is much lower, the agreed prices often cannot be held over the course of the year.
• Looking only at the total price. A forwarder can be cheap on average and still be much more expensive on individual important lanes. Comparing per lane and running scenarios shows where the money really is.
• Leaving the structure open. If forwarders may send their own spreadsheets, the real work only starts after the deadline: bringing everything into one format, chasing gaps, looking for errors.

Freight tenders with eFrexx

In eFrexx, you define the rate structure, with as many lanes and tiered prices as you need. eFrexx checks every entry for plausibility instantly, on your side and on the bidders' side. You run through different award scenarios directly in the system to make the best decision. This is how our customers shorten their tender cycles by up to 70 %.