Beyond RFPs: Navigating the Future of Freight Contracts with Proven Tactics

As freight markets evolve, so do the challenges faced by shippers in pricing and rate structures. In a recent interview at FreightWaves' F3: Future of Freight Festival, Andrew Leto, the CEO and Founder of Emerge, shared insights into the importance of a panoramic freight procurement platform and the strategies needed to navigate the complex landscape of contract freight bids.

Leto, a seasoned entrepreneur who founded GlobalTranz in 2003, highlighted the outdated methods that shippers and carriers were using to connect in the freight market. Recognizing the need for innovation, xa established Emerge, a freight procurement platform with a vast marketplace of over 45,000 carriers, aiming to revolutionize how shippers expand their transportation networks.

In the interview, Leto emphasized the critical role of Request-for-Pricing (RFP) events in the freight industry. He pointed out that many shippers limit their RFP events to a narrow pool of carriers, missing out on potential connections. This limitation became particularly evident in the last few years when capacity tightened, and shippers faced challenges due to the lack of available carriers.

Emerge's solution to this problem is a free freight procurement platform that not only facilitates contract freight bids but also opens doors for carriers outside the shipper's network to connect. Leto stressed the importance of breaking away from the traditional model where carriers' sales representatives manually handle most bookings. He noted that despite advancements in technology, a significant portion of loads (about 98%) is still booked through this non-digital process, contributing to falling profit margins in the industry.

Leto's insights also extended to the struggles faced by digital freight brokerages, citing the example of Convoy Inc.'s closure due to a "massive freight recession." He highlighted the need for billions of dollars in freight contracts available for bid in a marketplace to successfully digitize freight operations, emphasizing that achieving this scale requires a substantial number of daily shipper loads.

Addressing those aspiring to build a business in the industry, Leto acknowledged the challenges but remained optimistic. He advised entrepreneurs to embrace the need for bootstrapping and finding ways to make money without burning through capital. Despite the current hesitancy among investors in the industry, Leto believes there are still numerous opportunities for innovative startups to make a significant impact.

Navigating the intricate landscape of pricing and rate structures for contract freight bids requires a strategic approach, especially in an industry marked by dynamic shifts and evolving challenges. In light of Andrew Leto's insights on the crucial role of digital contract freight bidding platforms, shippers are encouraged to embrace innovation and rethink traditional practices. As we delve into the complexities of upcoming contract freight bids, it's essential to not only consider the perspective on the importance of broadening carrier networks but also to implement practical strategies. Here are five actionable tips for optimizing freight procurement strategies, fostering resilience, and achieving success in a competitive market:

5 Tips for Shippers Navigating Contract Freight Bids

1. Embrace Digital Contract Freight Procurement Platforms: Invest in comprehensive contract freight procurement platforms like to streamline the RFP process. Digital platforms provide the ability to connect with a broader network of carriers, ensuring a more competitive environment and a large quantity of quality freight contracts for bid
2. Diversify Transportation Networks: Break away from the traditional practice of limiting carrier participation in RFP events. Broaden your carrier network to include new and diverse players, leveraging platforms that facilitate connections beyond your existing network. This ensures flexibility and reliability, especially during periods of tight capacity.
3. Utilize Data Analytics: Leverage data analytics tools within freight procurement platforms to gain insights into market trends, pricing fluctuations, freight bids, and carrier performance. Informed decision-making based on data-driven analysis enhances negotiation strategies and improves overall supply chain efficiency.
4. Explore Dynamic Pricing Models: Consider adopting dynamic pricing models that adjust based on real-time market conditions. Dynamic pricing allows for agility in response to changes in demand, capacity, and external factors, enabling shippers to secure competitive rates while maintaining flexibility.
5. Collaborate and Communicate Effectively: Foster open communication with carriers and logistics partners. Clearly communicate your expectations, volume forecasts, and any unique requirements. Establishing strong collaborative relationships promotes transparency and can lead to more favorable pricing structures in the long run.

Incorporating these tips into your freight procurement strategy positions shippers to thrive in a competitive and ever-changing freight market. As you prepare for upcoming contract freight bids, a proactive and technology-driven approach will be key to maximizing efficiency and minimizing costs.

In conclusion, as shippers prepare for upcoming contract freight bids, the capabilities of a comprehensive freight procurement platform like Emerge should be at the forefront of their considerations. Embracing digital solutions and expanding networks beyond the traditional confines can pave the way for success in an ever-evolving freight landscape.