Episode Transcript
[00:00:02] Speaker A: You're listening to the Zipline Logistics Truck. Yeah. Podcast where we explore all kinds of hot topics in the logistics industry.
Get ready to learn, laugh, and get your freight on.
Ladies and gentlemen, welcome back to another edition of the Zipline Logistics Podcast. My name is Jesse Judy joined. With me as always, Teddy Lee Knox, our director of training and development. Teddy, good morning.
[00:00:37] Speaker B: Hello. How are you?
[00:00:38] Speaker A: Wonderful. Happy belated birthday. For those who are listening, we have a special guest today. We are talking upcoming bid season, navigating the bid season, RFPs, all that good stuff with our lead pricing analyst, Mr. Phil Gaither. Phil, good morning.
[00:00:55] Speaker C: Hey, good morning, Justin. Good morning, Teddy.
High Internet, hello world.
[00:01:02] Speaker D: Yeah.
[00:01:02] Speaker A: Exactly the words of a young Tiger woods back in 1996. I don't know why I know that, but here we go.
[00:01:07] Speaker B: I love that you know that.
[00:01:08] Speaker A: So we're just gonna dive in. Phil, what is an rfp?
[00:01:12] Speaker C: RFP request for pricing. Usually, you know what they call the bids, the list of lanes that they send to us, our customers send to us for us to quote out, to give them rates.
[00:01:25] Speaker B: Is there a difference between an RFP and a bid in your mind?
[00:01:29] Speaker C: There's technical differences, yes, but how I handle them in my day to day is very, very similar.
[00:01:35] Speaker B: Okay, nice. And what is, I guess, why would someone want to do an RFP or a bid? What's the benefit of a customer doing it? And I guess, is there any benefit in us being able to respond to an rfp?
[00:01:47] Speaker C: Yeah, I think the big benefit is to lock in pricing, to have that locked in pricing, especially if you're a shipper that needs kind of that consistency, needs to be able to forecast what exactly you're going to pay to get your product moved across the country. And for us, it kind of gives a sense of expected business that we know we're going to run these lanes for this customer this many times.
[00:02:16] Speaker B: I kind of know the answer, but
[00:02:17] Speaker A: I just want to, for our listeners.
[00:02:20] Speaker B: For our listeners, why is it helpful for us to understand the lanes in the business on a, a monthly, quarterly, or even annual basis?
[00:02:27] Speaker C: Well, I mean, because every lane's different seasonality based on where you're going, where you're coming from, and to be able to get the big picture of, hey, this lane, I don't know, New New Jersey to Los Angeles, we can see, we can know when that was seasonal, you know, how much the rate spike, what we need to prepare for, do we need to beg any sort of that type of thing into the rate itself. That just makes things smooth for us. Smooth for our customers.
[00:02:59] Speaker A: Yes, certainly the budgeting, I'm going to chime in as well here, but the budgeting part of it is seeing what we're expecting as far as zip line is concerned, our expected revenue, obviously for our customers, their expected budget for what their transportation costs are going to be for our carrier partners. It's where do I need to position my trucks? Right. If, If I have 10 trucks going. You mentioned New Jersey to Los Angeles a week, you know, that might affect where I'm going to put or what other lanes I'm going to aggressively price or plan for to get into New Jersey. Maybe I'm based in Ohio. I need to get those 10 plus trucks to the greater New Jersey, New York area so then I can get the long hauls out to Los Angeles. So there's a lot of planning. We talk about it all the time, Teddy. It's one of our, our goals here and I think we do a really, really good job of it. But it's been super important on the RFP process. Why do you think, Phil, someone would choose a specialized 3pls bid over others?
[00:04:00] Speaker C: I think a good portion of it is just the ease. I mean, we've, we've ran into issues dealing with customers like that. We've solved those issues time after time again. And you know, if you fix something enough times, eventually you realize what you need to do just to avoid that situation entirely.
[00:04:21] Speaker A: Yeah, that's fair. It can definitely be a challenge.
[00:04:24] Speaker C: Oh yeah.
[00:04:25] Speaker A: For us over the last couple years, navigating some of the, the CPG specific bids. But I think it's been beneficial to have those tough conversations when you're comparing, you know, someone say it's apples to apples, but it's really like apples to oranges. Hey, we know exactly what's going on at this Walmart or this Costco. They're a nighttime receiver or they have a 500 fine if you're late by more than 30 minutes, et cetera, et cetera. So that's all going into our bid that we present to you. It's clearly not going into the bid that this other competitor has provided. Yes, they may not know the details. Even better, I'm going to give Phil a shout out here. He's developed a system with his Excel wizardry to actually, you know, not all of our customers provide fully transparent data. That's a big part of this. Right. The cleaner the data, the cleaner the rate's going to be. So they'll just include a city, state and not a name of a receiver. But because of our expertise, we're able to pull that out and identify most likely what's going to happen. If you're talking to a snack food manufacturer and they're going into College Park, Georgia, nine times out of ten, it's Costco.
[00:05:36] Speaker C: Yeah, yeah, yeah, exactly.
[00:05:37] Speaker A: So Phil's utilized that experience and that information within our system to then automatically update it. And then we can have discussions with our account managers and our sales reps to those CPG expertise players to say, this is why you should trust us and this is why this rate makes more sense.
[00:05:55] Speaker B: That's probably one of my favorite things about my role here is having people come into Zipline and explaining all of these details to them and the nuances and the logisticizing that that we've talked about in other podcasts and then seeing them do it as early as three months on the floor with things like bids or even mini bids, projects, things like that, where they're actually able to find out these details, put them in action right away, and do exactly what you were talking about, where they've seen this issue once and never again are they letting it happen to them. They're making sure that it's taken care of from the start. I think that that's really cool to see, and I've seen it come to life in the RFP process from afar. I'm not the wizard that you are
[00:06:33] Speaker A: till you've been here three years. Is that right?
[00:06:35] Speaker C: Coming up on three years.
[00:06:36] Speaker A: Almost three years. Ok, so bid season. What would you kind of qualify or what time period would you consider bid season?
[00:06:46] Speaker C: Well, I did pull some numbers before I came in here.
[00:06:49] Speaker A: I thought you may have.
[00:06:50] Speaker C: Yeah. And historically, you know, February, March has been pretty busy for us and August as well. I will say we had the busiest bid month in what I think is Zipline history back in June of the beer.
[00:07:08] Speaker D: Really?
[00:07:09] Speaker C: Yeah, it was. It was a busy time over in the old pricing department.
[00:07:13] Speaker A: Do you want to take a crack at why that is before I jump in, or do you want to hear my thoughts first?
[00:07:19] Speaker B: I want to hear both.
[00:07:20] Speaker C: I think. I think a large part of it was the expansion of our Austin office, that they are sending a lot of bids my way and we're just getting them done, going through them.
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[00:08:24] Speaker A: That's a fair assessment, I think, just for our listeners, for our dedicated listeners. Certainly there's customers that are tracking down or preferring year long bids. We also have customers that do. I don't know how to say that. Bi, quarterly, twice a year bids, I guess. And then other people who just do it, who send out bids quarterly. And then the very, very rare instances of monthly bids. Right. That would be. Probably be the most rare that we see. But it does definitely happen to me if you're not to disparage those folks. But if you're forming a monthly rfp, you are strictly focused on the bottom dollar and you're probably not worried too much about service.
But I see that. I think the market has been a bit tenuous. We've discussed that before. We're kind of bouncing off the bottom, if you will. But there's signs of some seasonality disruptions. Again, we've talked about that. We just released our Q3 market update a few weeks ago.
So I think the shippers are trying to take advantage of carriers who are desperate for freight and who are willing to stick their necks out or put themselves on the line with some dreamlike pricing.
[00:09:37] Speaker C: Yeah, exactly.
[00:09:39] Speaker A: We're still seeing some of that of just risking it for the biscuit. I don't know. Go ahead, Teddy.
[00:09:46] Speaker B: I was expecting you to say, I have a question for both of you. So with what you were just explaining, what in your opinion would be the best way in the current market to submit RFPs or bids? Is there a cadence that works in a market like this versus a market that we saw before, you know, like in 2019, is there a preference on how you should be doing bids to take advantage of the market to actually work with carry from the customer side? From the customer side, yes. So like, in your opinion, what should happen?
Because in my opinion, a market cycle is about 18 months. It's not a year.
[00:10:20] Speaker A: Mm.
[00:10:21] Speaker B: So like, would knowing that, what would you recommend in the current market cycle and with the, any possible disruptions coming up in October.
[00:10:28] Speaker C: You know, honestly right now I think sort of the, I'm making a graph in my head here like the intersection of, you know, frequency and getting a price that makes sense for your company. I'd say about six months right now.
[00:10:44] Speaker B: Okay.
[00:10:45] Speaker C: That's enough to you know, price in any sort of seasonality, any kind of potential disruptions we might know about.
If, if I was in a shipper's shoes, I think I would do about six months RFPs.
[00:10:57] Speaker A: Yeah, that's fair. I was going to lean, you know, my, my preference is quarterly or, or the six month bid. Right. And I think the actions around that rfp, the discussions that you're having with your incumbent carriers, the focus on scorecarding on service levels, on, on time delivery, on disruptions. Right. I think that's a big part of it. It's very, very not easy. But it's easier to just send out a spreadsheet that says here are 250 lanes. Have at it versus all right, well here are these 250 lanes, but this carrier ran this at X or quarter two. Now we're going into quarter three. Let's have a conversation with them. Do you think this is going to be disruptive? Tell us where, where you were at. I mean it's transparency and partnership and all those things play a factor in it or should if you're trying to maintain high service levels and, and actually develop relationships. Right. It doesn't, it's easy for me to say it doesn't make a lot of sense and it's definitely better for us if we, you know, show up when we put a price in and we, we show up and deliver on the service expectations.
It feels like we should be in the front of the line as far as retaining that lane moving forward. But I understand it from a shipper's perspective, perspective or, or you know, a board's perspective that, that you have to continue to drive down costs wherever you can. So we gotta walk that fine line.
[00:12:18] Speaker B: It's fair. I feel like the majority of the time that I spend in training and development is on the market. It takes everyone a full cycle to actually understand the market before they can actually talk about it. So I think that you're, that makes sense. You should continue to talk about it. You shouldn't just look at it once a year or even just once a quarter. Might not be enough for a shipper.
[00:12:39] Speaker A: Yeah, there's definitely some challenges.
Right. I think a shipper may think that one load a week on a year long bid. So 50 to 52 loads is a lane. And most carriers, I would say 99 out of 100 carriers don't think that that's lane. That's not a lane, that's just a bit. Those are 52, you know, opportunities, spot opportunities as far as I'm concerned. But to expect the locked in price for the year is probably very, very difficult.
[00:13:05] Speaker C: You know, that kind of reminds me, I think another reason that we've seen bid volume increase. I think some shippers know a flip is on the horizon and they're trying to get get these good rates locked in while they can.
[00:13:21] Speaker A: Do you want to put it into the ether right now when you think the market flip is happening?
[00:13:26] Speaker C: No, no, I do not.
[00:13:27] Speaker B: You don't even need a crystal ball. You got the numbers, you got the spreadsheets.
[00:13:30] Speaker C: Yeah.
[00:13:31] Speaker A: Well, let us know. Phil, anything else that we want to share about bid season or RFPs in general that you think is worth sharing with our truck?
[00:13:38] Speaker C: Yeah, listeners, I like it personally when they don't password protect the Excel spreadsheet.
[00:13:46] Speaker A: All right, there you go. If you're going to share a spreadsheet, don't password protect it.
[00:13:51] Speaker C: Yeah, I know what I'm doing.
I can edit it. I can get your upload. Fine.
[00:13:56] Speaker A: Safety first.
[00:13:57] Speaker C: Yeah.
[00:13:57] Speaker A: Teddy, any final thoughts?
[00:13:59] Speaker B: No.
[00:14:00] Speaker A: Wonderful.
[00:14:00] Speaker B: That's it.
[00:14:01] Speaker A: Well, Phil, thank you for joining us. Thank you for your almost three year tenure here at Zipline Logistics. Certainly have improved our offerings. Shout out to our listeners. Please log in wherever you listen to your podcasts like and subscribe. Leave a review that really helps us out with our future reach.
If you need to hear any more about bid season, head over to www.ziplinelogistics.com backslash blog. Our topic will be there. It will be in the notes here as well. Phil, thank you for joining us. Teddy, as always, thanks for joining us on another edition of the Zipline Logistics podcast. We'll see you next time.
[00:14:43] Speaker B: Thank you.
