MISSISSAUGA, Ont. -- Jacquie Meyers, president of Meyers Transportation Systems, issued a plea to shippers and carriers attending the Surface Transportation Summit, to re-evaulate the tender process, which she says has commoditized the trucking business.
“There are lot of challenges inherent to these tenders,” Meyers said. “Number one, it reduces the decision making down to price…often times when we win these tenders, you are not really winning. It’s not a long-term win. It means you were the cheapest or close to the cheapest. You have to give something up to be cheap. If you’re the cheapest, what are you leaving out? Driver training? Safety? Security?”
Another downfall to the RFP process is that it creates a disconnect between decision makers, and those who’ll be most affected by those decisions on a daily basis, Meyers added. A senior executive who chooses a low-cost carrier based on price, leaves the warehouse managers, sales team and other front-line workers to deal with the mess.
She said shippers relying on a tender process to select transportation providers often focus on the line item transportation represents on their financial statements, but not all the other areas of the business that transportation affects. Lost loads, missed deliveries, unprofessional interactions with a shippers’ customers and other possible repercussions of choosing a carrier based on price can cost more to a business than what it saved in transportation costs.
“Transportation managers are judged on that transportation line item, but not the other lines that transportation impacts,” Meyers said.
She also said that tenders are onerous and time-consuming to complete and that they often come with heavy-handed contracts attached.
“Within these contracts are unfair and overreaching clauses that, honest to goodness, put a carrier at risk of bankruptcy should something go wrong,” she said.
All that said, Meyers acknowledged it’s impossible to avoid the tender process altogether. At Meyers, if the tender is geared towards choosing the lowest-cost carrier or if it goes out to dozens of companies, Meyers said her company won’t participate.
“If I can’t get a human to speak to me, I’m not going to be participating,” she said. However, the company will engage in the tender process if there’s some human interaction involved, and the possibility of a long-term business partnership developing.
“We’re asking to be a strategic partner, not just a line item on your financial statements,” Meyers added.