ocean freight rfp webinar_ocean freight... · ffw –freight forwarder intermediary ... request for...

2020-01-22

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OCEAN FREIGHT RFP

RFP or Not RFP

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Ocean Freight RFP

AGENDA

❖ Ocean Shipping Industry: History and Modern Containerized Market

▪ History of Ocean Shipping

▪ Containerized Services – Birth of “Intermodalism”

▪ Modern Ocean Container Carriers & Intermediaries

▪ Services included in Ocean Container Shipping

❖ Ocean Rate Structure and Attributes

▪ Basics of Containerized Ocean Pricing

▪ Ocean Rate Surcharges and Rate Structure

▪ Ocean Rate Dynamics and Seasonality

❖ Ocean Request For Proposal (RFP)

▪ Legal Requirements & Technicalities

▪ Preparation Steps and Considerations: Timeline

▪ Templates

▪ Execution and Wrap-up

❖ Agreeing on Terms and Execution

▪ Terms Agreement

▪ Further Execution of the Ocean Shipping Contract – it takes two parties

History of Ocean Shipping

➢ Importance of commercial shipping

➢ New Canals – Suez (1869) & Panama (1945)

➢ Shipping before 1956

Ocean Shipping Industry: History and Modern Containerized Market

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Containerized Services – Birth of “Intermodalism”

• Intermodalism

➢ Early examples of intermodal containers include railroads from

1830s and Pennsylvania Railroad regular container service

(1929)


➢ US Army uses the “Transporter”

container, developed for

removals of Korean War supply

movements (1950).

Containerized Services – Inception

• Inception

➢ 26 April 1956, Malcom McLean's - Sea-Land Services

➢ SS Ideal X with 58 metal container boxes sailed from Port

Newark, NJ to Houston, TX


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Containerized Services – Standardization

• Container Sizes

• Fleet Measurements

20’ TEU vs. FEU (FFE) 40’


Modern Ocean Container Carriers & Intermediaries

Modern carriers & intermediaries

➢ VOCC – Vessel Operating Common Carrier

Actual Operator

➢ NVOCC – Non-Vessel Operating Common Carrier

Aggregator/Consolidator

➢ FFW – Freight Forwarder

Intermediary


O.T.I.

(Ocean

Transp

ortatio

n

Interm

ediary)

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Modern Ocean Container Carriers & Intermediaries

Modern carriers & intermediaries

➢ VOCC ~50 carriers

➢ FFW & NVOCC (O.T.I.) > 40,000


= Christal Line = Danmar Lines

= Blue Anchor Line = Painter Express Line

= Expeditors International = Schenker Ocean

FFW NVOCC FFW NVOCC

Services included in Ocean Container Shipping

• Liner Service – Port to Port

• Intermodal Service – Door to Door


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Basics of Containerized Ocean Pricing

Terms

Glossary of Shipping Terms

Ocean Rate Structure and Attributes

Term Description Term Description

FCL Full Container Load LCL Less Than Container Load

ETD Estimated Time of Departure ETA Estimated Time of Arrival

CY Container Yard RY Rail Yard

Port Ocean Container Terminal Door Pick-up/Delivery Location

TEU/FEU Twenty/Forty Foot Equivalent Unit FAK Freight All Kinds

DMR Demurrage – storage at port DTN Detention – equipment usage

DC/DV Standard Dry Container HC High Cube Container

REEF Standard Reefer Container HCRF High Cube Reefer Container

OT Open Top Container FR Flat Rack Container

OTI Ocean Transportation Intermediary FFW Freight Forwarder

NVOCC Non-Vessel Operating Com. Carrier VOCC Vessel Operating Com. Carrier

Basics of Containerized Ocean Pricing

Terms

Glossary of Shipping Terms



FCL Full Container Load LCL Less Than Container Load

ETD Estimated Time of Departure ETA Estimated Time of Arrival

CY Container Yard RY Rail Yard

Port Ocean Container Terminal Door Pick-up/Delivery Location

TEU/FEU Twenty/Forty Foot Equivalent Unit FAK Freight All Kinds

DMR Demurrage – storage at port DTN Detention – equipment usage

DC/DV Standard Dry Container HC High Cube Container

REEF Standard Reefer Container HCRF High Cube Reefer Container

OT Open Top Container FR Flat Rack Container

OTI Ocean Transportation Intermediary FFW Freight Forwarder

NVOCC Non-Vessel Operating Com. Carrier VOCC Vessel Operating Com. Carrier

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https://www.maritime.dot.gov/sites/marad.dot.gov/files/docs/resources/3686/glossaryfinal.pdfhttps://www.maritime.dot.gov/sites/marad.dot.gov/files/docs/resources/3686/glossaryfinal.pdf

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Ocean Rate Surcharges and Rate Structure

Ocean Rate Structure

Why so complicated?

Surcharges



BAS Basis ocean freight THC Terminal Handling Charge

BAF Bunker Adjustment Factor VAS Value Added Services

CAF Currency Adjustment Factor PSS Peak Season Surcharge

D/ODF Documentation Fee – Des./Ori. GRI General Rate Increase

Ocean Rate Dynamics and Seasonality

Ocean Rates Seasonality

Rates Fluctuations Depend on:➢ Supply and Demand

➢ Seasonality

➢ Bunker costs


Fluctuations of 40’ container

rate from Shanghai, CN to Le

Havre, FR

2012, APR

2014, APR

2016, APR

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http://freightfilter.com/charges-glossary/

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Legal Requirements & Technicalities

Request for Proposal (RFP) can be simple or complex – usually results in contract to the proponent with the best compliant proposal.

• Request for bids creates expectation that all bidders will be treated fairly

and equally:➢ Same information to each bidder

➢ Communications through controlled processes

➢ Bids will be evaluated on disclosed terms only

• Private sector owner generally has discretion to award contract to bidder

with lowest price or any other bidder (depending on extent of privilege

clause) BUT in no event may contract be awarded to a non-compliant

bid.

• Owner may also cancel RFP, even if one or more bids compliant, if

privilege clause explicitly foresees this.

Ocean Request For Proposal (RFP)

Preparation Steps and Considerations

• What is the core service?

• What is the geographical scope and volume?

• What is the timeline of the RFQ?


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• What is the core service?

– Ocean

– Pre-carriage / Delivery

– Export declaration / Customs clearance

– Value added service such as online visibility



• What is the geographical scope and volume?

– Worldwide

– Specific markets or regions


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Preparation Steps and Considerations: Timeline

• What is the timeline of the RFQ?

– When is the best time to run RFQ?• March – May

– What does it take and how much time is required?


Templates

• RFQ Clarification Document

– “RFP Fixed Price For Logistics Services”• Cover page

• Instructions

– Definitions

– Proposal Deadline and Requirements

– Offer Validity

– Financial Responsibility

– Negotiations

– Rejection of Proposals

• Statement of Work

– Scope and Volume of Work

– Validity Period

– Expectations of Work

– Contract Conditions and Clarifications

• Terms and Conditions

– Service Requirements

– Freight Payment Policy

– Minimum Technology Requirements


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Templates

• RFQ Pricing Document

– “RFP Fixed Price Ocean Rate Submission”• Contains information ready for pricing

• Outlines format required by the customer


The COMPANY A

Company Legal Name:

XXXX XXXXX Tel. Main: XXX-XXX-XXXX Forwarder Operating Name:

Toronto, ON Forwarder National SCAC Code:XXX XXX

RFP Submitter's Name:

RFP Administrator Name: XXXXX XXXXXX RFP Submitter's Phone Number:

RFP Administrator Email: XXXXXXXX@the companya.com RFP Submitter's Email Address:

RFP Submission Deadline:

System last access date:

COUNTRY PORT PORT CODE ORIGIN SERVICE COUNTRY CITY Prov. / StateDESTINATION

SERVICE

LCL - DOOR TO DOOR

(By CBM ALL-IN)40' HC (ALL-IN)

TOTAL ORIGIN

CHARGES

TRANSIT TIME

(ORIGIN TO DEST.)

Indonesia Surabaya IDSUB Port CANADA TORONTO ON Rail Yard FOB VANCOUVER - VIA RAIL

Indonesia Surabaya IDSUB Port CANADA TORONTO ON Rail Yard FOB MONTREAL - VIA RAIL

Indonesia Surabaya IDSUB Port CANADA CALGARY AB Rail Yard FOB VANCOUVER - VIA RAIL

Indonesia Surabaya IDSUB Port CANADA EDMONTON AB Rail Yard FOB VANCOUVER - VIA RAIL

Indonesia Surabaya IDSUB Port CANADA HALIFAX NS Rail Yard FOB VANCOUVER - VIA RAIL

Germany Hamburg DEHAM Port CANADA TORONTO ON Rail Yard FOB MONTREAL - VIA RAIL

Germany Hamburg DEHAM Port CANADA CALGARY AB Rail Yard FOB MONTREAL - VIA RAIL

Germany Hamburg DEHAM Port CANADA EDMONTON AB Rail Yard FOB MONTREAL - VIA RAIL

Germany Hamburg DEHAM Port CANADA HALIFAX NS Rail Yard FOB MONTREAL - VIA RAIL

Germany Hamburg DEHAM Port CANADA MONTREAL QC Port FOB MONTREAL - ALL WATER

Portugal Porto Port CANADA TORONTO ON Rail Yard FOB MONTREAL - VIA RAIL

Portugal Porto Port CANADA CALGARY AB Rail Yard FOB MONTREAL - VIA RAIL

Portugal Porto Port CANADA EDMONTON AB Rail Yard FOB MONTREAL - VIA RAIL

Portugal Porto Port CANADA HALIFAX NS Rail Yard FOB MONTREAL - VIA RAIL

Portugal Porto Port CANADA MONTREAL QC Port FOB MONTREAL - ALL WATER

Portugal Porto Port CANADA VANCOUVER BC Port FOB VANCOUVER - ALL WATER

Portugal Porto Port UNITED STATES TACOMA WA Door FOB TACOMA - ALL WATER

Sunday, June 10, 2018 4:21:16 PM

Origin DestinationSUPPLIER

INCOTERMS

SERVICE TYPE (DEST

PORT/MODE)

Rate Submission (Ocean Freight)

[email protected]

Thursday, May 31, 2018

- Transit time to be entered based on total transit time required from pick-up till delivery

- Xxxxxxxxx XXXXXX

- Xxxxxxxxx XXX-XXX-XXXX

- Any questions should be address to the cotact indicated as contact point XXXXXX

- All rates are to be in USD XXXXXX

Transportation RFP Request - Forwarder Submission Document (all information

protected and confidential once submitted) RFP # - 2018-OCEAN-01

RFP Request By: RFP SUBMISSION INSTRUCTIONS - PLEASE READ CAREFULLY AS FAILURE COULD RESULT IN SUBMISSION REJECTION RFP Submission By:The COMPANY A - The document should not be changed except for entering ocean rates XXXXXX

Execution and Wrap-up

• Execution

– Information Sessions

– Distribution of RFP to All Participants Simultaneously

– Blind Distribution of Q&A to All Participants

– Dedicated Team to Proposals Review

– Equal Approach to All Proposals

• Wrap-up

– Inform All Participants of Decision and Thank Them


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Terms of Agreement

• Terms of Agreement

– In Writing

– Part of the Agreement

– Signed by both Parties

• Further Execution of the Ocean Shipping Contract

– It Takes Two Parties

Agreeing on Terms and Execution

Q&A

Ocean Freight RFP

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VALERII KUCHERENKOPMP, M.Eng, CCLP

M: 647 447 [email protected]

Contact Information

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mailto:[email protected]

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