Running a freight auction on Pando offers several advantages for Shippers to identify and award contracts for their lanes. Pando’s centralized platform enables shippers to conduct the entire auction process within a single system, eliminating the need for multiple tools or manual processes. This centralized approach enhances efficiency, visibility, and control over the auction events. All bidding activities, bid updates, and results are recorded within the system, ensuring a clear trail of the auction process. This transparency enhances compliance with internal policies, regulatory requirements, and industry best practices. 

Prerequisites to run an auction event: 

  1. Setting up the necessary masters: For the auction to commence, all the masters should be created and maintained for Pando to map them accordingly. The following masters are mandatory:
    1. Transporters
    2. Vehicle Types
    3. Approvers
    4. Carriers
    5. Currency
    6. EMD Tracker
    7. Currency
    8. EMD Tracker
    9. Event Parameters

  2. Setting up the lane: Determine the key parameters for your freight auction, including the source, destination, duration of contract, incumbent rates, gross tonnage to be transported and more. Learn more by referring to this article.

Running the auction  

To commence the auction, 

  1. Go to the PRE-AUCTION page, select the Lot/Lane for which you would like to run the auction, and click . This brings up the NEW EVENT slider.
  2. Fill in the details of your event:
    1. Provide a name to your event.

    2. Fill in a reference ID for the event. This is to help identify the event from search.

    3. Select the mode. Choose between Road, Ocean, or Air.

    4. Select the event type. You can select between one of three options:
      1. Long Term RFQ: A long term RFQ is usually initiated when a shipper wants to award contracts to a select set of transporters.
      2. Reverse Auction: Reverse auctions help shippers to lower freight costs through increased competition and avoid having to individually negotiate with several different transporters. 
      3. Spot RFQ: A spot RFQ auction is run when the requirement is usually one-off, and the services are required on an expedited timeframe.

    5. Enable or Disable EMD: Earnest Money Deposit (EMD) is a security amount that the transporter must pay as a deposit to be eligible to bid on the contract. Enable EMD and assign the EMD code to this event to extend invite to eligible transporters only. The deposits will be verified by the finance teams which will then fill the EMD code for the transporter thereby making them eligible to be part of the auction.

    6. Mode of Execution:Select mode of execution. Choose between one of two:
      1. Sequential: When selected, the auctions for the lanes happen sequentially with a break in between. This means, if an auction ends, the transporter does not get another chance to go back and place a bid.

      2. Parallel: When selected, the auctions for the lanes all happen in parallel and allow transporters to partake in it over the course of the entire event for all auctions. This enables transporters to move between multiple events and place their prices accordingly.

        Note: Available only for reverse and spot events

    7. Select the scope of bid that can be placed. Choose whether the transporter can place the bid on the Lane or the Lot entirely.
      Note: Available only for reverse and spot events.

    8. Carrier: Select the Carriers for which you would like the Freight Forwarders to offer quotes for. This is applicable only for FF-Carrier auctions.

    9. Tier and No of Tiers: When enabled, the transporter can define the tiers (or price slabs) and offer pricing accordingly. You may also define the number of tiers that the transporter will place the bid in.

    10. Bid Start and End Dates: Select the start and end dates for the bidding event. Ensure that the start date of the bidding event is yet to elapse.

    11. Upload Documents: Upload Terms & Conditions documents that will have to be signed off by the transporters as a part of the auction.

    12. Charges: Select and apply all accessorial charges that will apply for the contract. Configure these charges in the Event Parameters master.

    13. Lane information: Select and apply relevant accessorial charges that will apply for the contract. Configure these charges in the Event Parameters master. With event parameters, specify information that you would like to collect from vendors at the time of bidding. For example, weekly schedules or truck availability etc.

    14. Transporters: Invite potential carriers or freight service providers to participate in the auction. Send out notifications and provide them with the necessary information, such as auction rules, timeline, and access credentials.

    15. Additional Information: Fill in details that would be relevant to the transporter. This could include details on the number of packages that will need to be shipped, dimensions of the packages and more. You can also add notes that can provide further guidance to the transporter to help them with the bidding process.

    16. Event Settings:Fill in the event settings. 
      1. Minimum and Maximum Anomaly: Set the minimum and the maximum basis of deviation that can be allowed for the bid amount from that of the exit price.

      2. Leading Bid Buffer (applies only for Lot bids): Allow the transporter to only match or exceed bids by the cost or percentage values.

      3. Quote Decrement By: Allow the transporter to match or place a discounted quote by cost or percentage values.

      4. Reconciliation: Decide if the transporter is expected to provide a price for reconciliation as well. Decide how much the reconciliation value can deviate from the exit price. Choose between cost or percentage and set the value accordingly.

      5. Show Rank: Enable or disable if the rank should be shown to the transporters during the auction.

      6. Approval Flow:Enable or disable the approval flow.
        1. When disabled, the L1 bid will be accepted as the confirmed bid without any requirement for approvals.
        2. When enabled, the L1 bid will be sent to be sent to all users who’ve been added to the approval master and will follow the hierarchy for approval before accepted. For example, once accepted, the bid will move from Logistics Executive to Head of Logistics and Head of Finance. 
      7. Mandate action across all approvers: When Approval Flow is enabled, the shipper can choose to decide if the bid must be approved by one user at each level of role hierarchy or all approvers across the hierarchy.

      8. Approval Reminder: When enabled, Pando will send approval reminders to all users at predetermined intervals to ensure that the approval to all bids is expedited.

      9. Ceiling Price:The price which should be used to evaluate the ceiling. Shippers can choose between one of two:
        1. Lot Cost: When Lot Cost is selected, the transporter can quote a price for all lanes, but the ceiling price is only considered at the lot-level. This means, a sum of all lane costs is arrived at to measure if the ceiling price is met. This provides the transporter to work around to price different lanes with some flexibility. 
        2. Base Freight: When Base Freight is selected, the transporter is expected to match the ceiling price for every lane instead of matching it at the lot-level. A shipper may usually opt for this for lanes that have high volume of movements.

    17. Share of Business settings: Share of business allows you to define what ratio of the overall freight volume for a given lane would be awarded to a transporter. Defining share of business allows you to build resilience and redundancies into your supply chain and ensure that the liability is spread across several transporters.
      1. No. of Transporters to be awarded: Define the number of transporters whose bids will be awarded the final contract. Based on the number of defined, the overall share of business will be decided upon. 
      2. Show Awarded: Define whether the identity of the awarded transporters will be displayed to all participants of the auction. 
      3. Show SOB for awarded transporters: Decide if transporters who’ve been awarded the contract get to see the total share of business they stand to benefit from by winning the bid. 
      4. Auto allocation of SOB: Select if the share of business should be allocated automatically to the bidders with increasing order of bid amount. Once enabled, define the percentage of business that should flow automatically to individual transporters.

    18. Counter-Offer settings:Define how you would like to receive counter-offers from the participants of the auction.
      1. Send Counter-Offer Type: Choose who should be able to send you counter-offers. You can select between only transporters who’ve made a quote in the ongoing auction or all transporters who have been invited to the auction.
      2. Counter-Offer Rank Validation: Decide the rank until which counter-offer bids will be requested. If you choose, say, 6, then the top 6 transporters by rank will receive a request to make a counter-offer. 
      3. Allows Bids for Transporter with Counter-offer: Enable transporters that have made a counter-offer to place more bids.

    19. Currency Settings: All auctions require to be run in a currency that is relevant to the Shipper. However, the transporter may operate in different geographies and would prefer to make quotes in local currencies. Shippers can enable the same by setting up two types of currencies— Base Currency & Other Currencies.
      1. Base Currency: Select the base currency. This is the currency in which the shipper will receive quotes and award the contract.  
      2. Other Currencies:Select currencies in which a transporter can place bids for the entire contract or specific legs of the contract. For the currencies to be available from the dropdown, configure the currency and their exchange rates in the currency exchange master. 


  3. Now that all details have been filled, click . This creates the auction event and presents with a success notification.

    To access all created auctions in Pando, go to PROCURE and select AUCTION from the drop down. Click the auction you created and this opens the auction.