Operational metrics

MikeJr

Moderator
Staff member
30
If you are not tracking this you could be doing a heck of a lot of work giving out rates for customers that give you little to no business and the ones that want you to service them sometimes get left by the wayside because you are so busy trying to get out 'all rate quotes' you receive.

The acceptable ratios and metrics will differ based on your mix of clients, and how many resources you want to allocate to spot quoting.

In the end, a price needs to be provided at some point for every order you handle either on the 'spot', by tender (which will need periodic updates) or seldom after the shipment is booked for the clients that know and trust you are being fair with them.

Anyway, what a great month May turned out to be. Lets roll the momentum into June!!
Mike
 

Freight Broker

Well-Known Member
30
Its not something I monitor that closely. Generally for existing accounts my ratio is about 50/50.. which tells me that my rates are about where they need to be.. maybe a little better because I purposely quote high on stuff that I don't really want. For new accounts I will monitor for a few months.. if I'm quoting alot and geting nothing then I usually quit quoting after about a month.
 

TransAction

Active Member
15
Our TMS system thankfully tracks this very well. We can even drill down to customer specific. I actually had to call a customer last week telling them their quote to shipment ratio doesn't make sense for us to continue to handle as they requested 50 quotes in the first quarter of this year and gave us 5 shipments. We are at 68-75% which I am obviously very happy with. There are however instances that skew these numbers as we have many customers that "spot quote" but a good handful of them just say, send the quote and book it, trusting we are giving them fair market rates. On the other hand, we have some clients that ask us to quote several "scenario's" which should really count as one shipment.
 

frtbrkr

Member
5
Thanks everyone for their response. we use to monitor it off hand, but since last August we have actual data for each and every SPOT quote. it gave s a clear picture on the company overall and per customer. Understand that hard data might give you different information then your instinct and gut feeling.

Of course we deal differently with a customer which has a low QTL ratio but in the other hand give us repetitive shipments with agreed rates. Context is still important but it needs to be data driven. We are then checking why we are not winning those quotes and what we can do to improve.

someone post on this thread, it's always better to have more matrix then too little. i cant agree more.
 

frtbrkr

Member
5
Our TMS system thankfully tracks this very well. We can even drill down to customer specific. I actually had to call a customer last week telling them their quote to shipment ratio doesn't make sense for us to continue to handle as they requested 50 quotes in the first quarter of this year and gave us 5 shipments. We are at 68-75% which I am obviously very happy with. There are however instances that skew these numbers as we have many customers that "spot quote" but a good handful of them just say, send the quote and book it, trusting we are giving them fair market rates. On the other hand, we have some clients that ask us to quote several "scenario's" which should really count as one shipment.
Which TMS are you using? it it for an asset based or none-asset based company/divisions?
 

loaders

Site Supporter
30
There are two main reasons why a customer asks you for a quote. The first is they are looking for a lower rate on one of their existing lanes that is presently being handled by another carrier or broker. Basically they want to keep the incumbent honest. The other much more common reason (in my experience), is the customer is quoting new business for themselves and needs to apply a freight cost to their product/service. We have a number of long term customers whose business is not repetitive shipments to the same location. Their customer base is made up exclusively of “one ofs”. Every time they quote, they ask us to provide them with a freight cost. If they are awarded the business, we provide the freight. If I looked at the number of quotes compared to the number of shipments and used that as a metric for keeping them as a customer, they would have been gone years ago. Quoting is like fishing, you will catch nothing if you don’t have a line in the water. It just goes with the territory.
 

Freight Broker

Well-Known Member
30
Same here. I've got shippers who spot quote everything because almost each order is unique.. Some shippers are more reasonable than others in this respect.. I know I'm one of maybe 3 or 4 providers to them. And then there are those who email blast the RFQ to 1261 providers.. in which case I'm disinclined to respond at all.
 

frtbrkr

Member
5
i agree, i have a customer with a QTL ratio of 42%, when we asked them they said they are quoting with 4 brokers and we are getting the majority, but they need to have multiple to keep us all in check, i get that and i can live with it. we also have customers who quote us on orders coming up at a later date which they hope they will get. I'm not disagreeing with your points. all i'm saying make sure you have reports and keep track if it because it matters, dont just reply on your brains, especially when you dont do it by your self, rather you have paid staff doing the jobs.

The typical TMS software are not great at those reports and analysis. i hope someone can help me. it takes us some valuable time to build such reports.
 

loaders

Site Supporter
30
I have to wonder if the time and trouble involved in compiling these reports and data bases about the number quotes vs the number of loads awarded is greater than just giving your customer the quote they requested? Part of a broker’s job (in my opinion) is to be the “eyes and ears” for your customers, meaning doing the legwork and research about transportation so they can concentrate on what they do or make. If that means providing them with freight quotes to assist them in increasing their business, so be it. Listen, if after a year of providing almost daily quotes to a customer with getting one stick of business, I too would be seriously reconsidering our relationship. However, if I get one shipment from every 10, 15 or even 20 quotes to the same customer, they are one of my best friends.
 

frtbrkr

Member
5
Every company should make their own determination of how many quotes they are ready to provide for a customer and what they get in return, it depends on a variety of factors. My question is how it's best to keep track of it without spending too much time on the report it self.
 

MikeJr

Moderator
Staff member
30
Unless your TMS does it for you it'll be time consuming.

There are a few things to consider, sometimes you are helping your customer quote business they did not get, it's not a lost opportunity because you are providing a service assisting them in figuring out what it costs to transport their inputs or goods. You are helping them determine if a new supplier makes sense or what to add to their costs for a specific customer.
Like I said earlier, everything that you move you have to provide a price to the customer at some point, and if you don't do it - someone else sure will, like me! :)

Keep well,
Mike
 

frtbrkr

Member
5
Unless your TMS does it for you it'll be time consuming.

There are a few things to consider, sometimes you are helping your customer quote business they did not get, it's not a lost opportunity because you are providing a service assisting them in figuring out what it costs to transport their inputs or goods. You are helping them determine if a new supplier makes sense or what to add to their costs for a specific customer.
Like I said earlier, everything that you move you have to provide a price to the customer at some point, and if you don't do it - someone else sure will, like me! :)

Keep well,
Mike
Mike, you would want to keep track of what kind of quotes you lost to your competitors vs what you lost because your customer didn't got the business from theirs.

We don't disagree on the concept. all i want to make sure is that our TMS has the option of flagging the reasons why we didn't get the quote and the right reporting capabilities.

If anyone knows of a TMS which supports it, i would appreciate their help
 
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MikeJr

Moderator
Staff member
30
Of course, it would be great to know providing every quote was followed up on (now you're allocating more resources) and that the information given to you was accurate. I don't work in administration here but I do know it's tracked and you are 100% correct, the reason you lost the bid could be important information for future business. If I lose a quote request because I understood the customer wanted a premium LTL provider and it's obvious that I lost it because someone else gave the customer a rail rate I'd like to know that little tidbit for the next (similar) quote for that customer.

PM with TransAction, it could be worth your time.

Keep well,
Mike
 
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