RFQ/RFP and Procurement Practices

1. RFQ/RFP and Procurement Practices

2. Glossary of Terms • RFI: Request for Information • Business process with the purpose to collect written information about the capabilities of various suppliers. • RFQ: Request for Qualifications • Formal request used to screen potential service providers. Sometimes a separate initial step, other times part of the actual bid. • RFP: Request for Proposal • Document that solicits proposal by a company interested in procurement of a service or product. • RFQ (I know, confusing): Req. for Quotation • More specific invitation to quote • Generally more price related, or only price related.

3. RFPs -- DO’S AND DON’TS • Do • Get in Early – Allowing for potential Q and A -- allows for a connection to be made. • Have Credentials and Requirements portion already prepared and easy to customize. • Clearly identify the required scope of work. • Clearly identify time frame, and deadlines. • Highlight key staff members. • Identify and focus on your strengths. • Communicate solutions in your response. • Don’t be afraid to be creative. • Out-Organize the Sender • Identify what is important to the customer! • It isn’t always price…. • Track and Trace/Planning Capabilities • Security/Crisis Management • Locations • Reporting Capabilities • Submit Early to get noticed.

4. RFPs -- DO’S AND DON’TS • Don’t • Do not overpromise/exaggerate ability or qualifications. • Do not Go in Blind or Cold -- All RFPs are not created equal! • Meet with Key Decision Makers. • Do your Homework on the industry/company. • Establish a team of key players internally, early. (Pricing/Ops/Sales) • Give Open Ended Answers • Be to the point inside the RFP. Elaborate outside of RFP • Do not quit – Follow up if you lose a bid to improve for next RFP/Next Year. • Do not assume you were to expensive! • Don’t take it personally – you must operate like you are going to win every bid during the process but accept rejection as a change to improve. • Do not get lost in the details • Be sure your company’s strengths shine through the often tedious requirements.

5. Simple RFQs – Key Information -- General When working on a rate request, some information is key to get timely responses with competitive rates. Trade Terms/Type of Move: Often simply including “P2P, P2D, D2P, OR D2D” allows procurement teams to understand the desired inclusions of the quotation better than stating the incoterm. EXW/Door Pickup: City, State, Zip Code at minimum. FCA: Origin/Transfer Point must be clearly defines (Warehouse Address, Airport, etc.) General Assumptions: Trucking moves assumed to be nonresidential locations, and dock to dock moves. FCL Road Moves assume legal road weight (Generally 38000Lbs/20, 44000Lbs/40/HC) Cargo assumed to be properly consolidated or palletized for Air/LCL moves at time of move. Otherwise consolidation/palletizing charges may be incorrect when received at destination. For Insurance, Duty, or Customs Clearance: HS code and commercial value required. Annual Customs Bond Assumed Cargo assumed nonhazardous unless notified otherwise MSDS or UN Code, Class, and Packing Group required.

6. Simple RFQs – Key Information -- Ocean When working on a rate request, some information is key in getting timely responses with competitive rates. FCL Commodity Reefer: Specific Commodity Required (Example: Carrots, not Foodstuff) Reefer: Temperature Range Volume Quotation Volume vs. Share Volume vs. Total Volume • How many forwarders will the customer be working with? • How many carriers do they like to have in their portfolio? • 1000TEU becomes 200TEU rather quickly Current SSL Information important to leverage carriers against each other. Shipper/Consignee Name: Not required, but often requested by SSL for reefer customers.

7. Simple RFQs – Key Information -- Air When working on a rate request, some information is key to get timely responses with competitive rates. Known Shipper: Post 9/11 -- Qualifies cargo to travel on Passenger (PAX) planes exiting USA Unknown Shipper – Freighter (CAO) or Ocean Trucking: TSA Approved Trucking Options for dropping TO Airport TSA + Accredited to our system Otherwise, must drop to our TSA warehouse affiliates for Airport Transfer. Hazmat: MSDS or DG Declaration required UN Number + quantity determines ability to fly PAX or CAO. Temperature Controlled: Passive or Active? Passive: Dry Ice? Gel Pack? Lifespan? Active: RKN Units – Temperature Range Ready Dates and Required Arrival Dates Understanding Air Service Levels

8. Target Rates & Follow Up These are areas that I notice the largest need for improvement internally and externally. Target Rates – Customers are often reluctant to share target rates as they feel they are limiting their ability to save money, when in reality they are limiting our negotiating power with vendors. Sales Team needs to ask what rate level is required to win the business, and how much they can commit to at that level (for specific rate request), establish desired (and reasonable) margin, and provide a target rate to pricing team. Follow Up – Follow up programs need to be put in place. New for 2017: Since digitizing the quotation process, ATA has added an “Approved/Rejected” area for information to be recorded. We can then give detailed feedback to agents and carriers to improve our chances of closing business in the future.

9. Not Covered But Up for Discussion Alliances and Carrier Consolidation GRI Implementation in RFPs and RFQs USA Rail System (FCL) and USA IPI System (LCL) Air Freight Consolidation Opportunities Additional Questions, Comments, Examples, or Concerns?