Bid season is here again. Last year carriers had the upper hand and double-digit rate increases were the norm.
This year shippers have already begun clawing back at rates as truck capacity is returning to the market.
With this in mind, we thought it would be interesting to find out how carriers felt about the bid process.
So, we conducted an email survey between October 22 and November 1, 2018. The sample size consisted of 105 dry van, refrigerated, and flatbed carriers operating fleets between 5 and 100 trucks.
Our survey seems to suggest carriers who win the most bids 1) are the most selective bidders, 2) know their numbers, and 3) are awarded lanes with the quickest turnaround times.
Almost half of the carriers in our survey receive anywhere from 0 to 50 bids per year, which means most receive two or three bids per week. At the extreme though, 25% of carriers told us they receive over 200 bids per year, or at least one bid per working day.
How do carriers deal with the extra work of sifting through and completing all the bid packets flooding into their inbox from brokers?
According to our respondents, most bid requests go directly into the delete folder. 44% of carriers say they complete less than 1 out of 10 bids they receive, while only 25% complete more than half.
Why is bid participation so low for carriers?
Carriers hit the delet button mostly because bids are for equipment they do not operate, or lanes they do not run. This is followed closely by believing the odds of winning lanes are too high to justify spending time submitting rates.
How long on average does it take for carriers to complete bids?
Our survey suggests most carriers know their rates. Over half say they complete and submit lane bids in less than day, while nearly a third spend less than three days to submit lane bids. Only 5% struggle with bids by taking more than seven days to submit.
How long does it take for carriers to find out if they’ve been awarded lanes?
It looks like 60% of brokers notify carriers within four weeks, while only 17% of brokers notify carriers past the eight-week mark if at all. This does seem rather low considering how long it usually takes brokers to get an answer from shippers.
How does all this work of submitting bids pay off?
The results were a bit of surprise as 37% of carriers told us they win some business from at least 90% of the bids they submit. The bottom third of carriers seem to win only 30% or less of the bids they submit.
So, for this bid season, if you remember to focus on carriers who are selective and know their numbers, then you’ll most likely receive the most competitive bids.
This of course gives you the best chance of both winning your bids, and then executing all the loads that will be swinging your way.
Check out our Carrier expectations for 2019 - freight volumes, rates, diesel, and trade survey here.