The CPG industry reported a 14% increase in transportation costs since 2012. Freight costs have increased drastically because of the fewer drivers, growing consumer demand and changing regulations. These factors create a competitive transportation environment and make transportation rates inflate considerably. However, shippers can reduce costs with TMS.
The American Trucking Association forecasts a 23.5% jump in freight tonnage from 2013 to 2025 and a corresponding 72% increase in freight revenues.
In order to cut spending, shippers are looking for new ways to remove inefficiencies from the transportation strategy. One way shippers can reduce costs and increase margins is to eliminate manual processes and invest in a TMS. Nearly half of supply chain executives report at least 1 manual step in half of their processes, and 71% said more than a quarter of their processes require manual steps. The risk of error is too great with manual methods, especially since it limits visibility, magnifies costs and detracts from performance.
Shippers are attempting to stabilize carrier rates and control costs through transportation management technology, which provides shippers with the ability to automate rules, monitor shipments and generate real-time data. Shippers can reduce costs with TMS and increase margins is to eliminate manual processes, all while gaining visibility into freight transportation.
Advantages of Using a TMS for Cost Management:
- Determine the best mode, carrier, and lane
- Advanced communication of fees (tolls, accessorial charges, etc.)
- Don’t have to increase staff to handle freight moves
- Opportunity to respond to risk and disruption in real-time with data that supports the decision
- Automated rules
- Combine billing and invoicing
- Monitor KPIs
Shipment transparency is a critical differentiator in today’s consumer-centric environment. 97% of shippers identify real-time visibility as “important” or “very important,” and they’re boosting routing efficiencies, capacity levels, and profitability through a centralized TMS.
As shippers attempt to fight rising transportation costs, they should know employing a TMS to drive results to the bottom line is a proven strategy.
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