It is March, and the procurement manager has a spreadsheet with sixty lanes on it. Last year’s rates sit in one column. Transporter quotes sit in his inbox as PDFs, each in a different layout, some per trip and some per tonne. Finance wants the new rates signed before April. Nobody in the room can say which of last year’s contract rates actually held.
A freight tender fixes what a lane should cost; the spot loads that fall outside it show what the lane really costs. We think the two have to be run as one system. The contract lanes come from the tender, and the overflow and refused loads go out through freight bidding on WhatsApp, so every spot rate becomes a live check on the contract rate.
A tender fixes the price of a lane, not the price of every load
In a freight tender, a shipper invites transporters to quote a rate per lane for a fixed period, usually a year. The winners get a share of the volume on that lane at that rate. Spot hiring is the opposite: one load, one rate, decided today.
The tender only covers loads that the contract transporter actually takes. Festive peaks, harvest months and a transporter short of trucks all push loads back to the spot market. Our guide on spot vs contract freight rates covers which lanes belong on which side. This post is about running the contract side well, and keeping it honest afterwards.
The lane list decides the tender before anyone quotes
Transporters can only price what you describe. A vague lane gets a padded rate, because the transporter is pricing the risk you did not explain. Before inviting anyone, build one row per lane with the same fields:
| Field | Why the transporter needs it |
|---|---|
| Origin and destination | Distance, tolls and the return market at the far end |
| Vehicle type | A 32 ft closed body and a trailer are different prices |
| Expected loads per month | Volume decides how sharply they can quote |
| Seasonality | Peak months need more trucks at short notice |
| Loading and unloading terms | Free time before detention, who loads |
| Return load, if any | A round trip priced as two one-ways is overpriced |
| Payment terms | Advance and balance change the rate |
Our freight RFQ checklist lists these fields in more detail. Add one more column for yourself: the rate actually paid on the lane last year, not the contract rate. If you do not have it, that gap is the first thing to fix.
Prequalify transporters on record, not on a presentation
A tender invitation is not a call for anyone with a phone number. Narrow the list before quotes come in, or you will be comparing rates from people who cannot place the trucks. In the Indian market that means a few plain questions per transporter:
- Do they own vehicles on this lane, or broker them from the market? Both can work, but you should know which.
- Which routes and vehicle types do they actually serve?
- Are their GST registration and vehicle documents in order?
- On loads you have given them before, how often did they place the truck on time, and how often did they back out after accepting?
The last question matters most and is the one many shippers cannot answer. If loads were booked by phone, the drop-offs live in people’s memories. That is a record problem, and it carries straight into the award.
Comparable quotes need one format and one closing time
Send every transporter the same lane sheet and ask them to fill in the same columns. Rate per trip or per tonne, decided by you, not by them. Fix a closing time for the first round and do not open early quotes before it.
After round one, many shippers run a second round with the top few on each lane, showing them they are not L1 without revealing other names or rates. Then award. Splitting a lane between L1 and L2 is common, because a single transporter on a busy lane is a single point of failure.
A worked example: the cheapest quote is not the cheapest lane
An illustrative lane, with round numbers chosen for the arithmetic. Say a plant ships 40 loads a month to one depot in 32 ft trucks. The tender returns L1 at ₹40,000 a trip and L2 at ₹41,500. The shipper awards 70% to L1 and 30% to L2.
| Plan | Loads | Rate | Cost |
|---|---|---|---|
| L1 | 28 | ₹40,000 | ₹11,20,000 |
| L2 | 12 | ₹41,500 | ₹4,98,000 |
| Planned month | 40 | avg ₹40,450 | ₹16,18,000 |
Now a peak month arrives. L1 refuses 8 of its 28 loads. Those go to the spot market at ₹46,000 each.
| Actual | Loads | Rate | Cost |
|---|---|---|---|
| L1 | 20 | ₹40,000 | ₹8,00,000 |
| L2 | 12 | ₹41,500 | ₹4,98,000 |
| Spot, refused by L1 | 8 | ₹46,000 | ₹3,68,000 |
| Actual month | 40 | avg ₹41,650 | ₹16,66,000 |
The month cost ₹48,000 more than planned. Giving all 40 loads to L2 at ₹41,500 would have cost ₹16,60,000, which is less than what actually happened. The ₹1,500 gap that won L1 the lane was worth ₹42,000 on paper (28 × ₹1,500) and was wiped out by eight refusals.
A contract rate is a promise. The refused load is the moment you find out what it was worth.
The year after the award is where tenders fail
Most tender effort goes into the award, and almost none into the year that follows. That is backwards. Three things need watching every month, lane by lane.
- Refusals. How many contract loads did each transporter decline, and at what spot rate were they replaced?
- Spot against contract. When spot bids on a contract lane keep coming in below the contract rate, the contract is stale. When they keep coming in well above it, expect more refusals.
- Rate paid against rate agreed. Extra charges and changed vehicles drift the actual cost away from the contract quietly.
This is where the spot side earns its place. In AutoBid, refused and overflow loads go out to the owners and brokers you choose on WhatsApp, bids come back ranked from L1 with each vendor’s win rate and status, and each award is compared with the rate actually paid on the lane, pulled from your ERP. Drop-offs after winning are recorded per vendor. By the next tender, you have a year of evidence instead of a feeling.
We prefer this over re-tendering everything every year. Lanes where spot and contract agree can roll over. Lanes where they have drifted apart are the ones to re-tender.
The strongest objection: tenders invite high quotes and quiet refusals
Experienced logistics heads push back here, and they have a point. Transporters know a year is long. Diesel moves, toll rates change and the peak season is unpredictable. So some quote high to protect themselves, and others quote low to win and then refuse the loads that stop being profitable. Either way, the tender rate looks scientific and behaves like a guess.
We take that seriously, and we do not think it is a reason to abandon tenders. It is a reason to design them differently. A fuel escalation clause linked to a published diesel price takes the biggest risk off the table, so transporters do not need to pad for it; confirm the exact wording with your legal adviser. Award volume in proportion to placement, not just price, so a transporter who refuses loses share. And keep an alternative ready, because a transporter who knows you can find a truck in an hour behaves differently from one who knows you cannot.
A tender without a working spot side is a promise nobody can enforce. With one, it becomes a baseline you can test every week.
What to do this week
- Pull last year’s actual rate paid for your ten busiest lanes and set it beside the contract rate.
- Count, for each of those lanes, how many loads went to spot because the contract transporter refused.
- Rewrite your lane sheet with the fields above, including return loads and seasonality.
- Pick two lanes where spot and contract have drifted furthest apart and mark them for re-tender.
A good tender is not the one with the lowest rates on the award sheet. It is the one whose rates still hold in October. For more on running freight procurement this way, see our freight procurement guides.