TYPES OF FREIGHT ORDER REVERSE AUCTIONS


RFP (Quote) Freight Order Reverse Auctions

 

In a RFP (Request For Proposal) procurement auction the BUYER posts a FREIGHT ORDER with the origin and destination, a load or shipment description, specific terms and conditions. Freight rate QUOTES from all or a favored group or network transport carrier SELLERS are requested.   The BUYER generally ranks the quotes and ACCEPTS from one or more of the quotes received.  The BUYER reserves the right to REJECT all of the quotes received and go to the Network'sFREIGHT SPOT MARKET LOAD BOARD for spot market QUOTES from both in-network and out-of-network transport carriers.

Irregular Freight Order Reverse Auctions

 

Irregular Freight Order Reverse Auctions are generally conducted by a smaller BUYER or a collaborating group of BUYERS of loads and shipments for transport with in route stops and drops toward a destination point with various terms and conditions.  Generally the BUYER will not limited the number of pre-qualified and preferred transport carriers.  The shipper or Beneficial Cargo Owners will generally accept from one or more of the lowest transport carrier SELLER offers.  

Regular Freight Order Reverse Auctions

 

Regular Freight Order Reverse Auctions are transport procurements conducted by a BUYER or collaborative group of BUYERS having regular loads and shipments generally from the same origin and destination points with similar transport terms and conditions.  This type of Freight Order auction is generally limited to a selected and favored group of pre-qualified and preferred network transport carrier SELLERS. 

Future Freight Order Reverse Auctions

 

In a Future Freight Order Reverse Auction the BUYER or BUYERS want to procure a FUTURE quantity of miles at future per mile transport prices. Historically truckload transport costs have increased at approximate inflation rates. Therefore generally in this type of reverse auction the BUYER will generally be seeking to contract future miles at or near inflation adjusted per mile prices and auction will result in a longer term Contract for Carriage.

In this type of auction transport carrier SELLERS can opt in or out of some or all of or a portion of the total future per-mile quantities. For example, to avoid spot market volatility ups and downs, a BUYER wants to buy 400,000 future miles (100,000 miles in future month one, 100,000 in future month two and 200,000 in month three) at the future inflation adjusted basket of transport costs.  In this auction transport carriers have three options.

   1. Place an offer to SELL transport services for all 400,000 miles at the future inflation adjusted per mile price cost.

   2. Place an offer to SELL some portion of the miles at a future inflation adjusted per mile price cost.

   3. Place an offer to SELL some or all of the 400,000 miles at an alternate per-mile price or prices.

In a FUTURE FREIGHT REVERSE ORDER AUCTION a single BUYER or a BUYERS group may increase or decrease the per-mile prices at future intervals as long as there are OFFERING transport carriers. Single or a group of network transport carriers can combine OFFERS to meet the needs of a single BUYER or a collaborating group of BUYERS.

The final per-mile offers for transport will determine the price at which the BUYER or GROUP OF BUYERS can be fully supplied with future transport services without being subjected to the volatility of spot market per-mile pricing.