Navigating the 2026 RFP Season: An Advanced Guide to Upscaling Your RFP

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Full Transcript

Trine Nielsen

Hi, everyone. Good morning. Good afternoon. Thank you for attending today's webinar, an advanced guide to upscaling your RFP. We're really excited that you've decided to to join today. My name is Trina Nilsson. I am the Global Head of Ocean Freight here at Flexport, and I have the pleasure of taking you through this relatively geeky topic today. But before we dive into the really interesting and very impactful topic of IFPs, let's make sure we cover the housekeeping items. On your screen, you will see a sidebar to the right of the main stage where you can submit questions. At the end of the presentation, we will host the Q and A and answer a few audience questions. So be sure to put in your questions early. In the same sidebar, you will see a tab labeled docs. This is where you can download a copy of today's slides and find other helpful resources. You can also find a link to register for our winter product release that is broadcasting tomorrow morning, and I do recommend you to join. I'm personally very excited about that broadcast. Above the stage is a button labeled Request IFP. If you would like help structuring or restructuring your IFP bid process, we are here for you, so please click that button to notify the Flexport team and we will reach out to you after the webinar. All right, now the legal stuff, which is very important. Please keep in mind that all information provided in this session is based on the situation at this current time and may not be customized to your specific business requirements. We always recommend reaching out to a Flexport expert to discuss your particular situation. Okay. So let's get into the fun part. Practicality is out of the way. I'm really excited to have with me today Alexi and Courtney. Alexi heads up our airfreight product and has a lot of experience running IFPs. And Courtney, I'm actually excited she managed to join us today because she is incredibly busy these days following the announcement on Friday. We had a big webinar yesterday covering all of the tariff news, and we had a bunch of questions. So we will not talk too much about that today, but I can recommend you to watch the recording on that if you have specific questions. And what Courtney will talk about today is how to navigate that whole situation, but in the context of RFPs. Ask us any questions. If we don't cover them in the webinar today, we will make sure someone reaches out to you after the fact and answer the question. So for the agenda today, we wanted to give you a quick overview of where is the ocean and the air freight market, because that is always something to keep in mind when you are going into an RFP. So we'll give you the quick highlight of the market situation. We do also have then Courtney going through including your customs in your RFP. There's pros and cons in running your customs IFP, whether it's included with your ocean or your airfreight or whether it's separate. So Courtney has all the answers to that. Then we have some very high level twenty twenty six IFP recommendations, and we'll end with a Q and A. Keep in mind, we are geeks, so we are going to try and not to go too deep, so that we can stay on time. And let's kick off with the ocean freight market. Ocean freight, six boxes. And number one here is that the current outlook is overcapacity. However, overcapacity has been seen before in the industry, but a few things are different this year. We do see carriers using increased capacity controls, and that is something to keep in mind, because as much as, you know, I think after a few years with very high rates, and I'll show you that a little bit later, all of us are looking forward to lower cost level on our ocean freight. We will most likely not see them go to the historical lows simply because carriers have built a capability where they're very successful in managing capacity. That has different implications, because it means that there's a lot more blank sailings, that you you should foresee into the bid, and it means that there's different priorities in terms of making sure that you focus on having network flexibility. So we'll touch upon that a little bit. Then Suez Passage. It has started, but the full return is still unclear. Next week, there's a big ocean conference, and one of the questions that we always ask is when will you return to the Suez? All the carriers are pretty conservative around this, and no one wants to give a firm commitment, besides from the fact second half. But we are monitoring it closely, because the situation is quite fluid, and there's more carriers now versus just six months ago, who are actually using the Suez Canal again. So it's something to watch out for because the minute the Suez Canal is used again, it will bring some short term turmoil, including expected congestion, especially at destination because a lot of ships will show up at the same time. This is more important for European destinations and for US East Coast destinations. But as always, when there's chaos somewhere, it does come with ripple effects in other areas, so equipment situations will be fluid and congestion also in Asia is something to watch out for. Tariffs, maybe I should have put this one first, because all of you who are on the call might actually have a lot of questions and are trying to deal with the recent announcements on shipment level. But one thing that I just wanted to highlight is that the tariffs and the geopolitical volatility overall is real, and it will, you know, we do foresee that continuing. And what it's doing for the ocean freight is that it is shifting the demand patterns. We're seeing peaks, you know, for different reasons at different times, and it's also shifting sourcing strategies. And the sourcing strategies so what we have seen in the past year is that, in particular, Southeast Asia has grown a lot in terms of importance, and this has implications because not all infrastructure is ready for the rapid growth. So that brings me to my next topic, which is micro events. Micro events is what I refer to as something that is more localized, it's not something that's impacting the whole world. But for example, in the past year, Singapore, which is one of the most important ocean freight hubs in the world, has been more congested than in the past twenty years. So that, of course, has implications across many networks, not all. Not all carriers are in the same terminal, but that's why I call it a micro event. And these events are on the rise. We continue to see more congestion. We also continue to see more issues due to weather related situations. Winter storms are now hitting the Northeast here in The US, which is causing delays in port. And all of these micro events combined could actually become really important factor for your supply chain, because that is something that is much more fluid and that requires a different way of thinking in order to navigate around it. So the next box, global schedule reliability is on the rise. So good news. Right? Schedules are more reliable. However, with everything in mind here, so one important note is schedule reliability, at least the official metrics, do not include blank sailings. So capacity management controls like blank sailings will not be seen here. And it does not show your shipment level reliability. Even if a ship sails on time, if your container is not on that ship, your reliability is still low. So one of the things we're working very hard to make sure is that you get all the tools to have shipment level reliability. And that is just one really important thing to consider going into the RFP, because your operational teams will be impacted much more by this, and you need to ensure that you're set up for them to navigate this and deliver your objectives. So last portion here, there will be different deals out there with different benefits. And actually, I think, if we go to the next slide, let's have a look. Because in the ocean freight market, there's three typical ways of buying at the moment. You have the fixed rates, that's the IFP season, you know, we're going into. We want to secure the rates from May 1 until April. There's also index linked deals. These are more common on Asia to Europe, but they follow the development in the market, typically linked to the SCFI index. There's also new indexes on the rise that are interesting to look at. And then you have the FAK market. So this very detailed or, you know, small graph, I hope you can all see it on your screen, it is to highlight the average cost over the past couple of seasons. So the light green line is the fixed rate, and it's indexed. So that's why you see it at a 100. So assuming, you know, the fixed rate at a 100 index, you can then see how the floating rates have moved. Over the past years, it has been favorable to have well, since the Suez closure, it has been favorable to have a fixed rate. The biggest challenge that people have faced is getting access to space on that fixed rate, getting equipment on that fixed rate. So even though you look at this and think, why didn't I just put all of my business on fixed rates? Well, it didn't necessarily give you the opportunity to move and give you the reliability that you needed. But if you look over the past period, and the reason why I put my first box as overcapacity, is that over the past period you can see this clearly, the rates, they're spiking. And when you see the small spikes, that's actually the carrier successfully managing the capacity because that is what they call a GRI or rate increase or PSS. And as you can see, the rates are volatile up and down, but they are trending much closer to the fixed rates. This is important for you to consider in your IFP because you need to decide as a business, do I wanna, you know, do I wanna have no risk and lock myself into a fixed deal, which potentially comes at a slightly higher cost looking into the next year? Or do I wanna actually play the floating market and see if I can have a cost benefit on the ocean main freight? This is a decision that only you can make as a company, and all of us have, you know, well, I think all of us, including myself, have to humbly say predicting the ocean market these days is very difficult, because there's so many external factors that we don't see. So it is really a decision that you have in terms of what is my risk appetite. Some might actually benefit from playing the FAK market in the coming year. So that's really what I wanted to say on the ocean freight. As we said, if you have detailed questions about your situation, we have lots of experts who are willing to help you. And just to highlight here, three topics that you should think about changing in how you approach your RFP. Go from focusing on your ocean freight cost. As you can see, the ocean freight rates are much more, you know, they don't take up as large portion of your total cost as they did two years ago. Make sure you focus on your total landed cost. There are a lot of hidden fees. There are a lot of charges related to D and D, and there's a lot of things where you can holistically reduce your overall cost. But you need to make sure that in your IFP, you set up the way to measure and understand all the fees that might come your way as part of the ocean freight movement. But the non main freight ocean cost is going to be a bigger portion of your budget looking into the next year. Next topic. Don't plan your IFP to go on certain strengths. Make sure you have flexibility across networks. We do foresee that we'll see more schedule changes. We do foresee more blank sailings, port omissions and these type of issues. Make sure that you have the reliability that you need, and the only way to get that over the coming year is to make sure that you have the flexibility across the different alliances and networks. I would also even say, look at whether you need premium options. If something goes wrong and there's a massive congestion somewhere, look at your premium options. Premium options could also be to get equipment when there's no equipment to get. So plan in that flexibility and ensure you have contingency plans for your most valuable flows. And then lastly, obviously, as a tech company, we are watching the tech extremely closely. And there's one major breakthrough that all of you should really consider when you think about your provider selection. There is now options to do real time actions. So in the past, you know, it's been easy to say, let me look at the last three months of my business, let me evaluate what could I have done better, and then implement it. Now you have the option to do these things real time. And we'll talk a little bit more about that, but it's just very important that you set that expectation to your provider, because that will bring you a lot of cost savings real time. So that was my speech. There's obviously a lot of details about the ocean freight market that I could maybe speak for the next two hours, but Aleksey, I think, you know, we should talk about market now and we see what comes up in the Q and A.

Alexis Boutet

Sounds good. Thanks, Trina. Hi, everyone. I'm Alexis Boutet. I'm the global head of corporate, at Flexport. So in this section, I will cover the key trend in the end markets. I'll do quick hits so that we stay on time, but you can ask question at the end. Then I will cover the current rates as of January 2026, so to see how we started the year and what we can expect in the second half of the year. And then I'll cover some recommendation to run a successful ARFP, this year based on, the context in which we operate. Let's get started. So first, there's a trend that continue is we have supply chain shifting from China to Southeast Asia, and India. So the the key thing you can anticipate is there is gonna be more volatility in India and Southeast Asia countries. So that's one key trend. If we go to the number two. The next one. Alright. Second big trend. So ecommerce. So ecommerce growth has slowed down significantly at the 2025. They were hit in all directions. So the deminiti ban in US that was implemented in May 2025. EU announced that they will implement flat fee in 2026 for low value, b two c parcel. And China started to crack down on the the big e commerce platform, restricting, basically, their, power over the merchants. So they cannot dictate anymore the prices that the merchant have to be to be listed on the platform. So this has led to the growth of e commerce stalling in the past three months. But if you look on the horizon, there are good news for e commerce. And the latest one is that as of last week, they announced that international post shipments will go back to a 10% tariff regardless of origin countries based on value. And if you remember, China and Hong Kong were, for example, at 30% tariff on international post shipment before the announcement. So what it means is one of the channel of ecommerce just got much cheaper based on last week announcement. The it's not free anymore. There's no more deminamis, but it's back to 10% tariff, and that will yield an increase in demand. And we've already confirmed that with some of our ecommerce clients. So ecommerce has been stalling. It's going to restart to grow in 2026. So that's second key trend. If you go to the next one, third major trend is the AI boom. So if we, look at last year, we had the 20% growth, in ITECH, and the majority of this growth is driven by components for data center networking equipment. And it has specifically impacted the Taiwan market and the Vietnam market to US, China to India, Thailand to US, and China to Europe. So on this trade lane going into 2026, there will be more volume of data component. They are extremely time sensitive. It's gonna eat up direct capacity. McKinsey prediction is that it's going to continue for the next five year. There are some experts that say, hey, until we see real bottom line benefits of AI, maybe this is going to be to to go slower, but it's gonna grow, and it's gonna impact the availability on direct services for air freight next year. If we go to next trend, Al, and last trend, so the recent MD eleven incidents has, basically shown that it might not be viable to keep very, very old freight offline. And if you look at the proportion of the fleet that is post the retirement age, we have, like, 13% that's at the limits. They are very old planes. They have problem. And we have 4% that is beyond the limit, the recommended limit of operation, they should have been retired. What's to be anticipated in 2026, so the MD11 have been granted at the beginning of the year, is that other very old plane are going to be retired. With a combination of slightly lower rate and increased scrutiny, you can expect capacity on the freighter side to to contract. So that's one of the another of the key trend. And these freight sales, they deploy they are deployed in Asia to US and Asia to Europe route, sometimes transiting by a Middle East. So these are the corridors that are going to see their capacity shrunk. Next. Alright. I would be remiss not to talk about tariff on the air freight market. So let me do, like, very quick recap of the impacting event for the air freight market. So the I pa tariff have been ruled to be illegal. We have not yet determined how to get a refund, but the the the tariff have been ruled illegal. Second thing is so deminimi ban stay in place. So no change to deminimi. It's a separate regulation. However, as I mentioned, international post tariff have been reduced back to 10% regardless of value. So this will, drive a boost on on e commerce. Now, the expectation, and I have Courtney that will intervene on custom after, is that there might be more tariff to to come in other forms. So maybe change to two three two or three three zero one two, or maybe some new tariff under section three three thirty eight. So what it means for air freight? Volatility will continue because supply chain manager will if they are highly impacted by some tariff regulation, will, start to move as air freight to air freight on a on a project basis. So more volatility is to be expected as a as a result of tariff. It's unclear whether we will see a structural boost in demand. It really depends where we land on the final tariff to to to determine if there will be a massive growth on air freight demand. One thing though is is a air b the air business has grown 7% year on year in January. So we are still on the growth trajectory, and I'll I'll address that actually in the in the next slide. So so that's the the high level picture. So let's flip to the next slide. Okay. Let's talk right now to to bring it up to, like, concrete thing for your IP. So the demand has grown 7% year on year in January. So as of January, the market is not very soft. It has softened a little bit in term of freight. And what you see is that in particular on Asia to US and Asia to Europe, we had a little bit of a softening of rate in the range of 5% year on year. But we are comparing versus 2025 where everyone was trying to beat the the mini me and beat the tariff announcement. So it's a bit of a bias comparison. So the market's not really soft right now. It has softened compared to last year, but it's it's not a market that is completely decreasing. The anticipation is that there will be structural volatility with, more tariff changes that are coming. And the second thing that we anticipate is that the second half of the year is going to be stronger. Some capacity is gonna be removed. E commerce is expected to grow again because they have a favorable outcome on the IEPA tariff, and AI keeps growing. So these are the structural factor that, may make us think that the second half of the year is gonna be a bit stronger in term of it. But at least you have the picture right now and the expectation, going forward. And now, Carol, let me address some recommendation for, the freight market. So as you go into your RFP, here are things you should look at. First, the transit time versus cost trade off. If you are in this highly trafficked e commerce or AI lane that I mentioned, so if you were doing Taiwan to The US, Vietnam to The US, well, on this line, there's gonna be a lot of direct capacity that is consumed by people that might be willing to pay more than you do. So you really need to look at your transit time versus cost trade off, discuss that with your forwarder. What if instead of a four day of to go, I I was willing to extend to a six day of to go. How does that change my cost profile? And there might be a significant arbitrage to be done on cost if you ask your forwarder to run scenario. Now if you are running a just in time supply chain out of these markets that will have either high volatility or will be very constrained, what you should look at is probably to reserve capacity. So actually block capacity on an allotment basis. For example, in our network, we have 88% of our own freighters that have just been blocked by customer to protect reliable uplift. So that's that's a viable solution to just protect your uplift out of this very hot market. So that's number one. Second thing, speedy one on the ground. So you might sacrifice time on the air freight, But if you are very dialed on custom and custom is getting increasingly complex, with the tariff regulation, you might actually not lose so much time on your door to door. So make sure you're dialed on custom and ground execution because that's typically where time is lost on air freight, and you can regain a lot of time on the ground and custom that you are where where you extend the air freight transit time, and you just regain it back here. Searching, I discussed it, protects against volatility. If you're gonna be in a very, very hot lane, maybe reserve space if you have large projects that you need to move reliably this year. Searching optimized beyond the air rate, I I'll discuss specifically in a slide later how to do that. So I'll skip it for now and stay on top of trade news. Like, trade news are gonna dictate some of the peaks and valley of air freight this year. So by staying on top of of trade news, you will be able to arbitrage. Okay. Do I want to, like, go into the the turmoil right now because I need to move stuff or I just wait one week before a tariff deadline, and I have much cheaper air freight. So these are going to be the the recommendation, and I'll hand over to Courtney to discuss how to include custom in your RFP.

Courtney Ozgunay

Thanks, Alexi. Hi, everybody. Good afternoon. My name is Courtney Ozgenay. I'm the global director for customs business development here at Flexport. Thank you so much for joining us today. I know that tariffs are sort of the talk of the town these days. I'm gonna try to not spend the entire session on that and focus a little bit more on just using your data and ensuring you go through an RFP and you feel confident about your broker selection. But, of course, as mentioned previously, there are tons of resources available from FlexBoard to support any questions you might have around tariffs and everything that's going on in that current environment today. So first and foremost, as we move forward through talking about selecting a customs broker. So part of supply chain is obviously clearing your goods as they cross borders. We always like to call out that that should actually be very, very seamless with your freight movement. So as there's volatility in the freight movement, we should ensure that our customs is hopefully flowing and not causing additional delays. So we just sort of wanna talk through all of that.