03 Apr Smarter Buying Without RFP’s
Do you have an RFP to publish this year that will include household goods moving? If so, I’d like to help you. There’s no manual for the household goods moving industry and even for those with an MBA in Supply Chain or Logistics Management it is a struggle. The industry includes providers from two-men-and-a-truck to some of the most sophisticated transportation companies in the world that all price their services differently. And with a seemingly infinite number of variables and locations, is it any wonder that international household goods RFPs are garbage?
Yes, I said garbage. I have personally responded to hundreds of international household goods moving RFPs over my career. These are time-consuming and costly projects, with hours of work in analyzing your supply chain, reviewing costs over the life of the last contract, and identifying where you need savings. To put it simply, international household goods moving is hard. There is an incalculable number of variables when considering actual people’s homes and their possessions: shipment weight/volume, origin location, destination location, residence access(s), special handling, shipment timing, availability, and I could go on and on.
Generally, RFPs take one of two approaches to attempt to manage these variables. One is to create a very detailed and complicated RFP that addresses everything with an explicit rule set – origin rates, destination rates, inland transportation, freight costs, every conceivable accessorial rate – all broken out and detailed for every possible location around the world. This creates an RFP that is overly difficult to respond to and a set of contract rates that is complicated and time-consuming to manage. In addition, freight rates change quite frequently and locking in pricing means the cost of this risk is included in the rates, raising your pricing.
The alternative approach is too broad with little in the way of clarification, causing those responders to make their best guess and gamble with their profitability. You see huge pricing variances in these RFPs, as the resulting contracts will have loop-holes big enough to drive a truck through. Movers that low-balled their submitted pricing will find profitability by exploiting those gaps in the RFP process. And those movers that provided fair, honest pricing will seem too costly in comparison.
No matter the RFP approach, the end result does not allow the buyer to effectively manage their costs or evaluate and show true savings. And when moving services represent 20% of total relocation spend on average, it is not an area where you can afford to have anything but competitive pricing from quality movers.
So what’s a procurement professional to do? PricePoint has developed a system that empowers you to easily get a fair, accurate, and binding price on each and every move. Prices are instantly available showing your preferred movers with door-to-door rates. There is no need for inconveniencing your assignees with multiple surveys. Bids can be run at initiation based on your allowances because PricePoint links the bid to your mover’s rates for all weights and volumes. And by measuring everything about your moves against the marketplace, PricePoint closes the loopholes and stops the games.
Perhaps most importantly, PricePoint provides analysis at every step. Not only are the movers’ quality scores and pricing transparent, you receive a report on every shipment detailing the approved invoice amount and your move’s performance compared to the to the market average. Lastly, PricePoint provides quarterly reviews to provide you with powerful intelligence on your moves so you can manage your program better and improve performance.
With no sign-up or up-front costs from PricePoint, the only risk for you is hiding in your next RFP. Contact us today for a demo so we can show you the simple and smart way for companies to buy and sell moving services.