How do you compare freight quotes to make sure you really are seeing the bottom line cost and comparing them equally?
The best way to protect yourself and ensure you are seeing a true cost from your forwarders is to provide the most accurate information possible and also define the terms of the quote and what your expectations are in return.
When you request pricing from your forwarders, the key is to define the terms of response very clearly in the beginning.
Define your Incoterms: (EXW, FCA, DAP, DDP, etc.) click here for Incoterms Review
Give as much detail as possible: Pickup and Delivery city with zip codes, actual weight and dimensions of the cargo, value of the goods, HTS Codes, etc. Basic Information Required to Obtain a Freight Quote.
Delivery Expectations: When does the cargo need to be to its final destination? When is it ready to move?
Special Requirements: Hazardous goods, special loading/unloading requirements or restrictions, time sensitive, temperature sensitive, fragile, etc… These factors can significantly change the quoting of your shipments.
Stipulate response format: Tell your forwarders what charges you want quoted separately or grouped together. Example: “Please list all charges separately and quote freight charges separate from fuel and security surcharges…”
Now when you compare your quotes received, you should have some consistency in the responses you receive back and will be able to identify the different charges each forwarder has presented to you.
Items to check when comparing your freight quotes:
- Where is the freight quoted to and from: Check to see what the forwarder has listed as the port/airport/address of departure and the port/airport/address of destination.
- Check the Incoterms: Make sure the forwarder has the correct Incoterms on their quote.
- Service Level: You may receive quotes back with multiple service level options. Make sure these service levels are defined with estimated transit days as well. If a service is being quoted as “guaranteed” make sure you get a clear definition of that service and what that guarantee covers and entitles you to. Guarantee does not always mean free!
- Read the fine print: Read the notes in the quotes that you received for charges that “may apply” or fees that are “excluded” in the rates presented.
- Ask Questions: Get to know your forwarders and don’t be afraid to ask questions and clarify information you are receiving.
Be cautious of the quotes that come in significantly lower than the others. We all like a good bargain, but be sure to ask questions to ensure you really are being given a true cost without stipulations. Get it in writing!
There are so many variables in transportation that can greatly increase or reduce your freight costs. The more details you can provide on the front end will benefit you by easing the comparison process. This will greatly reduce the risk of your shipments costing more in the end due to additional accessorial charges, additional handling or your shipment being quoted at a service level you did not need.
If you have any questions or would like more information, please feel free to contact me at across@supfrt.com or call 800.298.4305.
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