How SMEs Should Organize Their Logistics

The way you buy transport should match the volume you ship. A company sending 5 loads a month needs a completely different approach than one sending 100. Getting this wrong costs you money either way — overpaying on spot rates, or wasting weeks on a tender process you don't need.

The Three Models at a Glance

Tier 1: Spot Inquiries (1–10 loads/month)

How it works

You send a request for each shipment — or a small batch of upcoming loads — to several carriers or forwarders. They quote back. You pick the best option on price, timing, and reliability. No long-term commitment from either side.

Best practices

• Build a shortlist of 3–5 reliable carriers. You don't need twenty. You need three who answer fast, quote fairly, and actually show up. Over time, you'll learn which carriers are strong on which routes.
• Send clear, complete requests. Include: loading/unloading addresses, dates, time windows, cargo description, dimensions, weight, number of pallets, special requirements (ADR, temperature, tail lift). The more precise your request, the more accurate the quote — and the fewer surprises at loading.
• Compare like for like. Make sure quotes include the same scope: fuel surcharges, tolls, waiting time, loading/unloading. A quote of €800 “all-in” is not the same as €750 plus fuel surcharge plus tolls.
• Confirm in writing. Even for spot shipments, send a written freight order with all details. A phone confirmation is not enough when something goes wrong.

Advantages

• Maximum flexibility — no commitment, change carriers anytime
• Can take advantage of low market rates
• Simple, no procurement process needed

Risks

• Prices fluctuate — high season or tight capacity means you pay more
• No guaranteed capacity — carriers may decline when they're busy
• Time-consuming — requesting, comparing, and confirming each load individually

Tier 2: Framework Agreements (10–50 loads/month)

How it works

You approach 2–3 carriers per lane and agree on fixed rates for a period (typically 3–6 months). No formal tender document — just a negotiation based on your volume commitment. The carrier gets predictable business; you get stable rates and guaranteed capacity.

What to agree on

• Rate card: Fixed price per lane (city-to-city or region-to-region). Can be per truck, per LDM, or per pallet depending on your business.
• Fuel surcharge mechanism: Critical — see the fuel surcharge section below.
• Volume commitment: You don't need to guarantee exact numbers, but indicate a range (“15–25 loads/month on the Vilnius–Hamburg lane”). This gives the carrier confidence to hold capacity for you.
• Payment terms: Typically 30 days from CMR date or invoice date. Shorter terms (14 days) can sometimes get you a lower rate.
• Cancellation terms: How much notice is required to cancel a booked load? 24 hours? 48 hours? What's the cancellation fee?
• Waiting time: How much free time at loading/unloading? (Industry standard: 2 hours.) What's the hourly rate after that?

When to renegotiate

Review rates every 3–6 months, or when:

• Diesel prices move more than 10% from the reference level
• Your volume changes significantly (up or down)
• Market conditions shift (driver shortages, seasonal peaks)
• The carrier's service quality declines

Tier 3: Formal Tender (50+ loads/month)

How it works

You prepare a structured tender document (RFQ — Request for Quotation) with all your lanes, volumes, requirements, and evaluation criteria. You send it to 5–10 carriers. They respond with pricing and service proposals. You evaluate, negotiate, and award contracts for 6–12 months.

What the tender document should include

1. Company overview: Who you are, what you ship, your industry.
2. Lane list: Each origin-destination pair with estimated monthly volume (number of loads, LDM, or tonnes).
3. Cargo profile: Typical pallet count, weights, dimensions, special requirements (ADR, temperature, oversized).
4. Service requirements: Transit times, loading/unloading time windows, GPS tracking, insurance minimums.
5. Pricing format: Specify how you want quotes — per truck, per LDM, per pallet. Include a rate table template for carriers to fill in.
6. Fuel surcharge model: Your proposed mechanism (see below).
7. Contract terms: Duration, payment terms, cancellation policy, liability, insurance requirements.
8. Evaluation criteria: How you'll score bids — price (60%?), service quality (20%?), flexibility (10%?), financial stability (10%?).
9. Timeline: When bids are due, when you'll decide, when the contract starts.

Evaluation tips

• Don't just pick the cheapest. The lowest bidder is often the one who underestimated costs and will either increase prices mid-contract or cut corners on service.
• Check references. Ask each carrier for 2–3 references from companies similar to yours in size and industry.
• Meet the operations team. The sales team sells; the operations team delivers. Meet both.
• Start with a trial period. Award a 3-month trial before committing to 12 months.
• Split by lane, not by carrier. Different carriers are strong on different routes. Award each lane to the best carrier for that specific corridor.

Fuel Surcharge — How to Set It Up

Fuel is typically 25–35% of transport cost. If you agree fixed rates without a fuel mechanism, one side will lose money when diesel prices move. A fuel surcharge model protects both parties.

The standard model

1. Set a base diesel price at the time of the agreement (e.g., €1.50/liter).
2. Define a fuel share of the total freight rate (typically 25–30%).
3. Adjust monthly based on the actual average diesel price vs. the base price.

Example

• Base rate: €1,000 per truck
• Base diesel: €1.50/liter
• Fuel share: 28%
• Current diesel: €1.65/liter
• Surcharge: ((1.65 − 1.50) ÷ 1.50) × 28% = 10% × 28% = 2.8%
• Adjusted rate: €1,000 × 1.028 = €1,028

Which diesel price index to use?

• EU Weekly Oil Bulletin (European Commission) — widely accepted, covers all EU countries
• National statistics office — e.g., Statistics Lithuania, German Federal Statistics Office
• Carrier's fuel receipts — less common, harder to verify, but some contracts use this

The Hybrid Approach (20–50 loads)

Many mid-sized companies use a combination:

• 80% contracted: Your main lanes with predictable volume go to 2–3 preferred carriers on framework rates.
• 20% spot: Irregular lanes, peak overflow, or one-off shipments to new destinations stay on the spot market.

This gives you the stability of contracts for your core business while keeping the flexibility to handle exceptions without overpaying for committed capacity you don't always use.

Common Mistakes to Avoid

1. Running a tender for 5 loads a month. Carriers won't take it seriously. You'll get inflated quotes because the volume isn't worth their effort to optimize pricing.
2. Staying on spot rates at 50+ loads. You're leaving money on the table. At this volume, even a 5% saving from contracted rates adds up to thousands per month.
3. Ignoring fuel surcharges. If diesel goes up 20% during your 12-month contract and you have no fuel clause, either your carrier loses money (and eventually drops you) or you renegotiate under pressure.
4. Awarding 100% to one carrier. What happens when they have a capacity problem, a driver shortage, or go bankrupt? Always have a backup.
5. Focusing only on price. Transit time reliability, damage rates, communication quality, and financial stability matter as much as the rate per LDM.
6. Not tracking performance. Measure on-time delivery, claim rates, and invoice accuracy. Review quarterly. Data gives you leverage in the next negotiation.

Summary: Match Your Volume to Your Model