Shippers face more challenges than ever before when it comes to managing freight spend and allocation. What is going where, and if it is going to location A, what is the best way to send it? While many other questions exist, freight management in today’s world is built on the internet, speed, use of data, and staying attractive to drivers. Yes, your freight must be attractive to drivers to get the best deals, and a TMS provides an invaluable means of creating attractive freight. Of course, its additional benefits, like reduced costs and simplicity in back-office work, help too. Let’s take an in-depth stroll the use of a TMS in managing full truckload freight and how it can make full truckload your new best friend.
The Issue: Business Success Increases Freight Spend Complexity
As explained by Dan Goodwill of Canadian Shipper, shippers face a problem with ensuring they are paying surcharges but aligned to the volume of freight shipped. Often-overlooked charges, such as accessorial charges, billing charges, and data entry, contribute to increased freight spend and management complexity.
The Freight & Transportation Management Trends to Know in 2018
Part of this problem derives from the increased number of types, modes, of freight managed within a single company. Modern shippers rely on a combination of less than truckload, full truckload, air, ocean, and rail modes to move products domestically and internationally. Unfortunately, shippers may be unaware of overspending on full truckload shipments, as well as all other modes, for several reasons, including:
- frequent high claims expenses and high cubing charges.
- Inexperience at the helm of freight controls.
- Lacking visibility into density and frequency of freight ships, as well as freight allocation.
- Nonexistent requests for proposal (RFP) over the last three years.
- Multiple carriers managing and handling freight.
- Disjointed systems to manage freight.
- Consistent use of expedited freight carriers.
- Delivering shipments light or outside of the expected delivery window.
- Not using freight consolidation.
All these indicators of overspending can be solved by implementing a robust TMS.
The Solution: An Integrated TMS Can Manage Freight Spend Proactively
To take advantage of the true capacity of a TMS, a shipper must understand a few things about existing freight, explains a previous blog post. Shippers need to know the dimensions of their freight, and they should make full use of available technologies that automate the freight quote process. Requesting quotes manually will only serve to annoy drivers and carriers, and shippers are more likely to end up paying higher costs.
Essentially, frequent quoting is indicative of shippers constantly shopping around for the lowest cost deal, and since the carrier is less likely to secure the actual transaction and transport such items, carriers will charge more. However, shippers using a TMS can generate quotes within the system, and carriers and drivers are virtually unaware of these transactions. Of course, carriers and drivers will be aware once the freight is scheduled within the system.
In addition, a TMS should not be a terminal-based system. In other words, the TMS deployed should make full use of cloud-computing technologies, reducing upgrading costs associated with implementing such solutions in-house. In fact, a third-party logistics provider (3PL) can help shippers take advantage of cloud-based systems.
The Reward: Greater Use of Full Truckload Shipments, Including Intermodal Shipping, Reduces Full Spend
Part of the benefits of using a TMS are derived from its ability to combine both web-based bids and constraint-based bids. A TMS is like a procurement expert, allowing for the continuous benchmarking of shipping activities and giving shippers insights into freight spend. As explained by Chris Brady, shippers should seek to increase lead times and be flexible on pickup and delivery windows. To achieve these characteristics, shippers must implement adaptable solutions. Shippers must implement a scalable TMS. Furthermore, according to Jamie Wyatt of Supply Chain 24/7, cloud-based TMS allow shippers to gain real-time pricing and inventory of full truckload shipments, integrate existing supply chain management systems with an advanced TMS, identify equipment and utilization patterns, and merge shipments through the process of freight consolidation.
Putting It All Together
Using a TMS for full truckload shipments is about finding cost savings wherever possible, and since the Big-Box retailers are only growing in strength and power, small and mid -sized shippers can leverage the power of a TMS to tap into the valuable resource of full truckload shipping. For shippers who have not previously considered the possibilities of full truckload shipping or who lack the freight volume necessary for full truckloads, freight consolidation as part of a TMS, explained in the next post, is the answer.