Friday, February 15, 2008

A Whole New World

This past week, my brother-in-law and I attended a conference with one of the largest shippers of any type of meat in the world. We had never gone to anything of that sort before, but we wanted to see what we might learn about our industry there. I came away with some interesting perspectives on what we could gain from making a bid on their freight - which was the purpose of the conference.

First, we saw companies that started up in the last several years that already have done more in sales than we ever have. We saw huge companies that even ordinary (non-industry) people would recognize and we saw carriers that are far smaller than us. We used the conference as a chance to network and hopefully build some contacts, but mostly we listened to what we could gain from getting involved with this shipper, who actually owns eight companies that are all offering their freight together starting tomorrow.

We could double or triple our business if we got involved. We could miss out on a huge opportunity if we don't. We could damage our reputation if we overbid on the volume we could handle. We could be left wishing we'd gone for more if it turns out to be a perfect new line for us to be in and we didn't bid on enough. The likelihood is we will end up somewhere in between - not completely satisfied with what we get, but hopeful we'll have a chance to do better in the future.

The most fascinating part about the whole process to me was how they plan to accept bids. They are using an online software that allows everyone to look at all the business they're offering and to bid on what amount they want on a given lane. They call it an alignment process - they let their carriers and brokers align themselves with their freight lanes in ways that improve the efficiency of both the shipper and the carrier. If what they say is true - and I tend to believe it is - they are not simply trying to trick everyone into undercutting each other, but instead trying to place an ideal volume with an ideal number of carriers that they believe can be profitable and therefore fulfill the contract. They've given everyone the same two weeks to submit bids, after which they will analyze the bids for a month and decide what awards should go to which carriers at what volume. We have a lot of catch up work to do to be competitive, but we're hopeful that we have a chance to get some of the business and begin changing how we operate. As a result, my blog will suffer for those two weeks, but hopefully I can write here and there about what I observe in the process of building a bid.


I wrote this post at the start of this week of bid analysis, but I kept pushing it back in publication date because I had other posts to get out. Now I've been working on these bids for several days, and I feel wonderful about the chance our business has to really grow and flourish from this new opportunity. My brother-in-law talked today to another person who went to the same conference that gave us a lot of insight into how we should view the bid process, how we should price our freight, and what we might expect in terms of an award of business. She also gave us a lot of hope that even if we don't get as many loads as we want, we still have a wonderful opportunity to cover more than we're given, which could really raise our grade next year when they're rebidding the business. I am very hopeful for the future of my business right now.

On a side note, When I was discussing it with my father, he asked me if I was praying for new business (not a typical question, though we're both fairly religious people), and I told him I was. I further explained to him, "Dad, it took a lot of faith for me to make a reservation for a place to stay and to then hop on a plane when we never actually received any reply telling us we were welcome to attend this conference." I am glad I had the faith to make this leap. Now here's hoping our prayers are truly answered.

-- Robert


Julie Pippert said...


Robert said...

Thanks. We're pretty excited right now.