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A carrier comes to you (the shippers TM) and has a rate of 1.16 cents per...

A carrier comes to you (the shippers TM) and has a rate of 1.16 cents per mile that is 45cents cheaper than the average of the other eight carriers returning your bid package. What would be your reaction? Explain your answer.

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Answer #1

The quoted price is quite ambiguous. I need to ask the following questions from the carrier representative before taking a decision:

  • Is the quoted mileage of the carrier when it is empty, half loaded or fully loaded. Generally the mileage of a fully loaded carrier is lower than that of an empty one.
  • Details about the capacity of the carrier. The carrier will be used to transport my bid packages. Hence its capacity must be appropriate to effectively contain all the shipments.
  • Details about the fuel surcharge. Every carrier has a different fuel surcharge based on its performance. This fuel surcharge will comprise the total rate of the carrier.

The details will help in having a clearer picture of whether the deal of the new carrier is more profitable or the existing deal of the 8 carriers is more beneficial for business.

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