Tender rejections cost shippers time and money, not to mention unending frustration. With capacity tightening, specifically for certain load types, tender rejection rates are on the rise, and shippers are under extra pressure to get freight where it’s going on time. Since tender rejection can raise load prices by nearly 15%, it’s in every shippers’ best interest to get to the bottom of rejected tender.
Common Causes for Tender Rejection
There are some common causes for tender rejection, but the following list certainly doesn’t account for every reason a load might be rejected.
- Long distance to potential backhauls creating a lot of deadhead miles
- Short lead times
- An exceptionally competitive truck market
- Tight capacity in specific trucking segments
Minimizing Tender Rejections
You can’t eliminate the possibility of tender rejections altogether, but there are some ways that you can reduce the number of shipments rejected by carriers.
Occasionally, tender rejection may occur if a request for proposal isn’t clear enough. Ensure your internal processes give carriers all the information they need to understand the scope of your haul.
Choose Your Carriers Wisely
If the rate a carrier offers seems too good to be true, it probably is. A carrier may quote in order to gain business, but if their quote comes out below what the service costs to perform, they may reject the load.
A carrier audit is a great way to check in on tender rejection rates and determine if these rejections are making doing business with certain carriers in your repertoire too costly.
Increase Your Lead Time
If at all possible, try to stretch out lead times to at least a couple days. Give carriers time to fit you into their schedule ahead of time so that they can be assured business.
Consider forming relationships with carriers of all sizes and specs operating in your lanes. When you’ve got a long list of potential carriers for a load, you don’t have to hire a carrier who says they can probably fit you in. Spreading your business around helps small carriers thrive, and you may find a great new partnership.
Opt for Multi-Lane Carriers
Carriers may reject a load that comes with too high a connection cost. Any load that’s going to require a driver to schlep a lot of extra miles is one that’s not very appealing.
When you choose a carrier who operates in multiple lanes, especially lanes that connect to your load’s destination, the carrier can keep their costs down by turning another load in short order and therefore are less likely to reject a load.
Build Great Carrier Relationships
While you can’t mitigate every reason for tender rejection by building relationships with carriers, it can certainly go a long way towards getting your load out on the first try.
This is one of the big benefits of working with a 3PL to broker your loads. Freight brokers have already developed great connections with the carriers they engage. When faced with two similar loads at similar rates, a carrier is likely to opt for the load commissioned by the party with whom they have the best relationship.
One way to mitigate the impact of tender rejections is to use a 3PL. It’s a lot less trouble for you if a freight broker acts as intermediary when a load is rejected, and they have extra incentive to keep costs low while seeking an alternate carrier in order to keep your business. Need help assessing your carriers or adjusting processes to avoid tender rejection? Call us at 800.MYSHIPPING or fill out the form below.