Rising diesel prices, driver shortages, blocked trade lanes – shippers are currently facing a variety of challenges. In this article, they will learn how they can turn the tender season to their advantage even in times of uncertainty – and what they should bear in mind when conducting tenders.
Global turbulences hit the logistics industry
Are you struggling to maintain your supply chains right now? Then you are in the same situation as many other shippers. The cause of this precarious situation are global turbulences that are affecting the entire economy and thus also the logistics industry. These include the current geopolitical uncertainties in Europe, new labor regulations such as the Mobility Package, and the Covid-19 pandemic. They affect the availability of capacity, fuel and personnel costs, and the accessibility of trade lanes. Setting up one’s own transport logistics efficiently under such conditions is not easy. One contribution to this is the implementation of tenders.
Securing capacities through a large carrier network
No truck, no shipment – it’s as simple as that equation. For shippers, securing capacity is therefore one of the biggest advantages when tendering business. This factor is becoming increasingly important due to the growing driver shortage in recent years – worsened by the Covid-19 pandemic as well as new regulations on CO2 taxation and cabotage. But even with a closed tender, the agreed capacities cannot always be guaranteed in practice, for example in the event of driver outages.
To minimize risk, it therefore makes sense to commission contractual partners with a diversified, large carrier network. InstaFreight offers its customers an extensive network of transport partners through its cooperation with over 25,000 carriers. In addition, InstaFreight focuses on growing its charter offer as well as on expanding on existing and new trade lanes. This way, capacities can be secured in the long term.
Switch to fuel floater as diesel prices fluctuate
“Money makes the world go round” was already stated by Liza Minnelli. In addition to securing capacities, the optimization or flexibilization of freight costs also plays a significant role in the tendering business. Due to the rising diesel prices since the start of the Covid 19 pandemic, shippers are increasingly tendering orders to hedge against a (predicted) further price increase. This makes sense strategically, however, tender contracts are currently being renegotiated again and again due to the rising diesel prices – a time-consuming and resource-intensive undertaking.
One solution to this is InstaFreight’s so-called fuel floater cost model, which is used for recurring business. With that model, diesel prices are automatically adjusted to the current market value at any given time, without the need to renegotiate contracts. InstaFreight’s transport partners are thus protected against rising fuel costs, while shippers benefit from falling fuel costs – a fair and transparent model for both sides.
Intermodal as a solution for blocked trade lanes
There is a third factor that has an impact on the efficiency of transport logistics: the accessibility of trade lanes. Current geopolitical disputes are jeopardizing international routes and thus the transport of goods. So what to do when roads become impassable?
InstaFreight offers intermodal solutions for such cases. Shifting volumes from road to rail is not only a way to secure the supply chain in times of crisis, but also saves CO2 and reduces freight costs. Especially if the cargo is heavy, transported over a long distance and not time-critical, it is financially profitable for a company to switch to combined transport.
To conclude, shippers can turn the tender season into a strategic advantage even in uncertain times – to secure capacity, realize a flexibilization of freight costs via the fuel floater model, and keep their trade lanes open through intermodal solutions.
Would you also like to benefit from InstaFreight as a contractual partner for your recurring business? Contact us by email at tender.management@instafreight.com for a non-binding offer.
