Historically, the connotation of freight management was changed and reshaped many times. In general, it refers to all the processes that cover preparing, shipping, storing and receiving freight.
What is freight management?
Freight management is the service provided by freight forwarders or third-party logistics companies. It suggests matching loads to freight carriers, route planning, and the optimization of the transportation process.
Why do you need freight management?
Whether you are a large enterprise or a small business, cargo management can be complex. Even if you know the exact obstacles in your way, it may be challenging to put the overall picture together. Additionally, freight shipping involves numerous processes. To manage all of them efficiently, you need to pay attention to details and focus on everything simultaneously.
Attempting to handle all of this on your own won’t end well for your business productivity. More companies now realize the complexity and importance of logistics and transportation management and outsource it to external parties. Apart from peace of mind, delegating such a large branch of business can result in substantial cost savings and a much better operational efficiency.
How does freight management work?
If you consider outsourcing freight management, you would probably wonder: how does this process work? First, you need to understand freight forwarding and freight brokerage.
These are specific departments in the logistics company that are responsible for finding a carrier that can and wants to move your load. This is one of the key parts of the load management process because brokers can find the appropriate vehicles for your specific needs. They also negotiate freight rates for you, and these rates are lower than you would find on your own.
Third-party companies have a significant advantage over in-house logistics departments, due to their relationships with carriers. Combined with industry expertise, third parties can provide efficient management and drive cost savings.
What does good freight management include?
Apart from freight forwarding, cargo management actually includes many different aspects. If you are looking for a freight management company, here are the main things it should provide to you:
While operating in a progressively complex logistics world, companies in this day and age need all the help they can get to help them work smarter, easier and more efficiently. Customers are becoming increasingly more demanding, and the need for more improved supply chain visibility continues to pose a challenge for companies. Technology like Transportation Management Systems (TMS) is now more important than ever. The TMS plays a crucial role in helping shippers overcome these challenges and thrive in the increasingly competitive logistics industry.
Since more and more additions to TMS are continuously being tested for the future, it is important that your business isn’t left behind. Here are some reasons we believe investing in a TMS could be beneficial to your supply chain.
What is TMS?
A transportation management system (TMS) is a subset of supply chain management (SCM) that deals with the planning, execution, and optimization of the physical movements of goods. In simpler terms, it’s a logistics platform that enables users to manage and optimize the daily operations of their transportation fleets.
The Value of TMS for Supply Chain Management
A TMS helps shippers move loads from point A to point B in the most cost-effective and rational ways possible. Hiccups – such as empty return trailers or half-loaded containers – can be avoided by using a TMS’ technology, which analyzes and identifies the best possible situations and sends that information to dispatchers automatically. Traditional tools such as phone calls, paper, and fax machines have become virtually obsolete.
Some additional advantages that a TMS provides include:
Improved supply chain analytics
Carrier selection based on transit times, shipping costs, etc.
Better warehouse efficiencies
Decreased data entry errors – less wasted time fixing mistakes
Combine it with a Warehouse Management System (WMS) to achieve more supply chain visibility
Reduced inventory and greater confidence with customer tracking
Enterprise Resource Planning (ERP) integration to minimize manual data input
Most users primarily rely on a TMS to lower their freight costs. However, there are many other benefits. For example, a TMS’ report and analytics program can identify if the lowest-cost carrier is really delivering on time – all the time. If not, the shipper could be wasting time, money and resources, which cancels out any chance of any savings on rates. So, less employee time spent on transportation management translates to more time spent on other issues.
A smart supply chain manager will do everything they can to make sure there are optimal visibility and communication among all pieces to this puzzle. A TMS allows you to increase margins while maintaining quality, providing a tool that coordinates and maximizes your chain output and efficiency.
Deciding when you should replace your transportation management system (TMS) can be tricky. You don’t want to wait until the software begins to hold you back and affects the visibility of your supply chain. Many companies TMS’s enable some planning, optimization tasks. Many new systems are delivering so much more than what is necessary to help make your job easier.
What is the purpose of a TMS system?
A transportation management system is designed to help with the planning, execution, and optimization of the physical movements of goods. It is a logistics platform that allows users to manage and optimize the daily operations of their supply chain.
What factors to consider when replacing your TMS system?
How does your organization plan to grow?
If you have plans to continue to grow your business, changing to a more integrated TMS might be a good option for your company. You should think about your business and where you want it to go, and what technology you will need to help you get there.
How easy are integrations of the TMS system?
If your TMS system is weak, it might be time to consider upgrading to a newer system. If you have to buy separate modules or use third-party tools and monitoring services, you’re paying extra costs that could be eliminated with a new system. Do your research before switching to a new platform to make sure that it is the best move for your business.
Do you struggle when constraints and factors change?
Does your company do well with conflict and adjust well to change? If the answer is no, then switching to a new TMS system might not be the best option for your business until it is necessary for your business success. If your optimization and route planning aren’t powerful enough to recalculate the best routes and options in real-time, and can’t give you visibility into your best alternatives, it may be time to replace your TMS.
A TMS can help a company maximize achievable freight savings while adhering to pick up and delivery limitations. Using a TMS can improve customer service and eliminate your need for warehouse or distribution centers.
Many companies could easily improve their supply chains by utilizing a transportation management system (TMS). Some companies chose not to use a TMS, and other companies may just not have a good understanding of what exactly a TMS is. It is important to know exactly what a TMS is and how it can help your company save money and time.
What is a TMS?
A TMS is a tool that can help companies and supply chain professionals manage their freight and carriers. The TMS helps the user find the best mode and rate for any type of shipment to make sure that they are getting the best deal possible. The main features of a TMS include features like rating, booking, and tracking. One of the benefits of TMS is that it allows its users to automate order entry, create shipments, optimize shipments and routes, manage carriers, schedule pickups, and deliveries, manage the yard and communicate effectively with all supply chain stakeholders.
What are the benefits of TMS?
Instead of doing manual work or sending disjointed emails, shippers can instantly access the information they need through a single digital platform. The TMS let shippers compare rates side by side and make strategic choices regarding their shipment.
Improved Customer Service
A TMS helps a supply chain run smoothly and make the tracking information as transparent as possible. Shippers can inform their customers of shipment changes (late or missed deliveries) through the TMS to keep a positive relationship between the shipper and the customer.
Companies that use a TMS have a competitive advantage against competition and see many opportunities to grow their business.
Using a TMS is a great resource to help manage your supply chain. PLS offers a TMS known as PLS Pro to help shippers effectively manage and monitor their shipments and supply chain. For more information about PLS Pro, please click here.
Sometimes technology can be frustrating, but with the right product, it doesn’t have to be. An effective Transportation Management System (TMS) can relieve frustration out of your day if you’re a shipper, carrier, or 3PL.
A TMS combines the latest technology in an easy formula to make a one-stop-shop. It can offer the most value to a shipper and provide the unlimited strategic potential for all parties along the supply chain.
3PLs have recognized opportunities where they can create positive change within their business by introducing a TMS that provide a large range of functions. With greater visibility, shippers are given more detailed information for their viewing when they are organizing a shipment through their chosen 3PL. 3PLs also will see increased efficiency, streamlined business decisions, and satisfied customers.
Each system has its own features that differentiate it from others. Knowing what features work best for you will vary as well. Here is a list of just some of the features that an effective transportation management system can offer to your business:
Carrier Contact Management
Allows the ability to view and compare contracts and costs with ease through the use of digitalized contacts
Real-time tracking of terms and agreements
Contract alerts when it’s time for renewal
Reporting and Analytics
Offers scrubbed invoices that allow for thought-out business decisions on things like freight spend
Optimized historical shipment data for greater referencing
Displays distribution patterns
Review of industry trends
Insights into demand/order forecasts
Automates the auditing process
Generates reports as seen above to minimize potential risks
Allows the ability to build contingency plans ahead of time
Can be set with automatic alerts
Ability to track and trace shipments from pickup to delivery
Status update notifications
Auto pick up
Integration with a carrier using EDI
Display of costs and additional charges allowing an easy opportunity to compare
Are you a small business owner? Then you know that sometimes you can be overwhelmed with all the orders and the urgent need to meet all the delivery requirements, whether it’s the material needed for production or a final delivery to your customer. That’s where a 3PL small business shipping can help.
Hiring someone specifically to manage your transportation needs doesn’t seem cost-efficient, but handling your supply chain is becoming more troublesome and overwhelming – and takes too much time which could’ve been spent on growing your business. Often, you’ll find yourself spending more money than you would with outsourcing. That’s where third-party logistics services can come to the rescue!
There are a number of benefits a 3PL small business shipping can offer you:
Shipping may only be a part of your business, but it’s a 3PL specialty. They have seen it all and know what they are doing, whether it’s the rates or the most efficient mode of transportation. A 3PL can help you fulfill the orders more accurately and avoid possible mistakes which may trigger delays and extra charges.
Are you shipping a lot of LTL? While your 3PL might be partnering up with the same LTL carriers you’re used to, they might be able to offer you better rates. A large 3PL has a buying power a smaller business doesn’t have this leverage (just imagine how much freight a 3PL ships daily!), which provides an opportunity to negotiate better rates. This also applies to full truckloads.
Any 3PL ships an impressive number of loads non-stop and daily. They are screening and adding new carriers to their base every day. A 3PL can find a carrier for your shipments much faster, will be responsible for checking their safety and minimize your risks of giving your freight to someone who has no intention of delivering it.
The main reason we all partner up with any third-party service providers. A 3PL will provide you the service you need – from tracking loads and reporting to resolving issues in transit. They will focus on your needs and strive to provide the service you expect to maintain the business.
Saving your time!
Most importantly, a 3PL will handle your shipping and free up the time to focus on sales and development. Instead of spending the whole day trying to arrange transportation and handle the issues that inevitably arise – you can contact your 3PL and let them handle it while you are working on growing your business.
Still looking for a perfect 3PL for your business? We can help.
Moving things from point A to point B is what we do. It’s how we do it that makes us successful. There are a variety of Transportation Best Practices that help us run our well-oiled machine. We’ve compiled 4 best practices to help you and your company operate your business.
A strong partnership between shippers and suppliers is the key to a successful supply chain focused relationship. Long-term visions in transportation strategies are essential for sales growth and cash flows. Value chain strategies are being used to understand scale advantages, market benefits of service, and product differentiation.
There are continuous changes in supply chains, therefore partnerships built on long-term strategies are vital. Strong partnerships start with face-to-face leadership meetings, formal establishment of relationships, transparent expectations, and combined defect elimination.
By establishing these relationships, there will be more value added for both you and your partner to seamlessly manage your transportation planning.
Becoming a Lean Machine
Utilizing Lean Methodologies start with the company culture. Successful companies attribute their Lean culture to their standardized work processes and daily management systems for increased reliability and visibility. Key performance indicators (KPIs) also able companies to better improve their accountability across the supply chain and improve the visibility issues.
As supply chain efficiency and velocity are required, the need for correct, first-time performances and stable systems increases. Lean cultures and methodologies are now considered a core competency in practically all successful companies.
Utilizing Intermodal Capabilities
Businesses are leveraging intermodal services due to reduced costs, sustainability and driver retention benefits, and service & visibility. Partnerships between truck and rail companies are improving, resulting in better handoffs, capacity management, and visibility.
With intermodal, suppliers are seeing more dedicated drivers and trucks. There are more drayage (short distant) shipments which reduce driver retention challenges.
The growth of 3PL and 4Pls is resulting in small and mid-sized shippers moving into intermodal transportation. Intermodal is considered the ideal mode for long-haul customer shipments.
Customization is Key
Transportation suppliers are increasingly adding value-creation potential for shippers by offering full-service transportation management expertise and specialized services.
The ability to customize services for each customer/shipper will meet rising demands and allow you to better meet your customer’s needs. Expanding into a full-service transportation model also gives companies the opportunity for growth; everything from full-service equipment maintenance, consulting, 3PL services, to administrative services are now offered.
PLS Logistics Services is a leading 3PL company, striving to make the best deals for its customers and making the shipper and carrier relationship seamless. To learn more about logsitic’s best practices, click on the link below.
No matter the company, the ability to compete in a challenging economic climate is a necessity, and the amount of time, money, and energy spent on finding new ways to do this is exponential. Companies that don’t use the right type of fleet risk higher costs, inefficient service, low reliability, and wasted time. Re-evaluating the type of fleet your company uses can bring an invaluable advantage.
A private fleet provides a company with guaranteed capacity, supply chain control, and visibility of the entire operation. In short, the company has complete control, along with the ability to brand trucks and add revenue by shipping goods for other companies when allowed.
But, private fleets can also generate additional unwanted costs, especially for companies that are hard to plan for. These costs include maintenance, substitute vehicles, regulatory compliance, fuel, licensing, and driver hiring, training, and management.
Supply volatility and fluctuations in customer requirements also prove to be challenging for private fleet owners. They may need to own more trucks than they regularly use in order to prepare for demand fluctuation. When this is the case, the idle vehicles can severely affect the company’s bottom line because fleet owners are planning their fleet based on a peak period, leaving their capital tied up in vehicles they don’t always use.
Through a dedicated fleet, companies have all of the benefits of owning a fleet, without the burden of having to manage it. This option lowers their transportation spend, guarantees capacity, and gives the company the visibility it needs and the opportunity to make extra revenue through backhauls. With a dedicated fleet, companies can also customize their trucks, and all of the risks fall on the provider.
Dedicated fleets provide drivers who are specially trained for their company. Maintenance and vehicle replacement are also covered.
Using this option guarantees a right-sized fleet, while also having the flexibility to add capacity during peak periods, maintenance and vehicle replacement covered.
So which type of fleet should you use? That decision depends on your budget and needs. Conduct a cost-benefit analysis of each option, and choose the one that will best maximize your company’s investment and drive revenue.
TMS software is credited for saving companies money; those who manage transportation poorly spend $53 for every $1,000 of total spend on outbound transportation, while those utilizing a TMS only spend $6.35 per $1,000.
PLS created a SaaS-based software, PLS PRO, that is highly configurable, adaptable and dynamic. PLS PRO is an online transportation management tool that enables shippers to oversee, operate and adjust shipments using a centralized network – regardless of shipment size or customer requirement. PLS built PLS PRO to be a simple, effective way to monitor logistics processes.
Guide to Our Transportation Management System, PLS PRO
“Our TMS allows clients to spend less time managing freight movements and focus on their core business objectives,” says Greg Burns, PLS CEO, and President. PLS PRO can integrate and modify changes seamlessly and quickly. PLS PRO displays visibility across a client’s portfolio of shipments and functions through a centralized database, providing actionable intelligence on the data.
Case Study: A leading scaffolding, insulation and fireproofing company responsible for job site deliveries with multi-shipment orders incorporated PLS’ proprietary TMS, PLS PRO. As a result, the client saw an 11% cost reductionin core carrier program freight costs, a 5% cost reduction in overflow shipments, and eliminated monthly payments to a third party payment service provider. The client achieved their 98% on-time delivery goal while improving operational efficiency through online shipment requests and dock scheduling.
Clients today want self-service technologies to empower decision-making. Burns says, “They do not want to go and talk to 100 trucking firms. They want a technology that allows them to quickly find the best trucking firm specific to their needs, with the best service performance.”
PLS PRO enables managers to control, design and fine-tune their transportation across various locations. With the PLS PRO TMS software, shipper-clients can choose the highest or lowest priced carrier, can limit options to its three most-preferred carriers, and choose a carrier based on location. The TMS’ dock scheduling and management module plan the dock for reloading, tracking, and tracing. The optimization engine monitors transported shipments, a truck’s capability to contain the shipment and optimization of routes. Users can analyze KPIs and keep specific metrics on the dashboard.
TMS technology supports a shipper’s desire to lower transportation rates – with the help of a TMS, shippers remove inefficiencies and focus on more efficient modes, lanes, and processes.
PLS Logistics Services was featured in Logistics Tech Outlook magazine in November 2016 as the company of the month, a top 3PL technology solutions provider, and a transportation and technology service provider that offers shippers dependable, cost-effective solutions. Click here to read the full article.
What is a non-asset based third-party logistics provider?
A non-asset based third-party logistics provider is a firm that doesn’t own equipment, but partner with carriers to provide transportation services. There are many myths and misconceptions about non-asset based 3PLs. However, none of them are telling the truth. So, we have outlined the most common stereotypes, and crushed them:
Misconception 1: We don’t need to work with a logistics firm since we own our own fleet
Fact: Whether your company leases or owns its own fleet of trucks, complications arise in the quest to maximize shipping efficiency.
Government Rules and Regulations
Carriers and drivers are responsible for safety and compliance. So when government and transportation associations rescind, suspend and update the standards for drivers, it can be difficult to keep up. When demand shifts and current events call for change in capacity or routes, outsourcing lanes could be a better option than relying on your private fleet.
Rising Costs and Capital Investment
Operating your own fleet comes with financial obligations. This means that fuel, equipment, accounting, and insurance costs affect the bottom line. Besides unpredictable costs that can be unprofitable, there are also liability issues. Also, all fleets must carry insurance, usually with exorbitant deductibles. In case of an accident, a private fleet could suffer excessive financial loss. After accidents, lawsuits typically arise, and truckers rarely come out on top. Transfer this burden to a carrier who has a good reputation on the road. When working with non-asset based 3PLs, you can find a carrier who meets your company’s safety requirements and values.
Customer Service and Added Value
For unique or unusual freight, a company will often use a 3PL to find the perfect driver. Public carriers are just as competent as private fleets with regards to routes, customers and products. Through a network of carriers, a 3PL can assign a driver to specific accounts. This way, they can develop a relationship and recognize the routes, products, and requests.
Private fleets haven’t escaped the problems of the driver shortage. What if your top drivers leave you for a competitor? Public carriers have relationships with 3PLs, so they can help find solutions to guarantee capacity through backhauls or less than truckload moves. Also, for a private fleet, the driver shortage limits options.
Does your company have a private fleet? Find out how PLS can find you backhaul opportunitieshere.
Misconception 2: Partnering with a transportation management provider for customized solutions will eliminate my job
Fact: Outsourcing transportation management doesn’t mean turning over your job responsibilities. So, outsourcing specific parts of business operations to an expert is not uncommon. Also, outsourcing is a relationship, a strategic partnership, which adds value to the entire organization. Outsourcing provides more time for you to focus on your core competency and discover cost-saving results.
Outsourcing should be seen as a resource, to produce more efficient processes; it’s a tool that generates data to make better decisions; it’s an identifier of inefficiency and a key to overall growth.
Organizations expect to spend, on average, $65.4 million on transportation, freight services, and equipment in the upcoming year.
Misconception 3: If I work with non-asset based 3PLs on transportation solutions, I’ll lose any or all visibility
Fact: A 3PL’s transportation management solutions provide your company with historical and real-time shipment data. When leveraged and managed properly, big data is used to make smarter operational decisions and optimizes supply chains.
Visibility represents the real-time status of supply chain operations
Consumers, manufacturers, and suppliers want to know where their order is at any point in the supply chain. For companies that want to keep visibility into its supply chain and shipments, they can partner with a 3PL and integrate advanced TMS technology that allows information to be gathered from internal and external sources. The real value in increased visibility includes more effective management, simple monitoring and the ability to optimize business intelligence and practices.
Misconception 4: 3PLs offer a one-size-fits-all strategy
Fact: Transportation management has a suite of services to fit your business needs. A 3PL managing your transportation will work behind the scenes while you manage and monitor the decisions that are best for your business. A 3PL provider will enable you to eliminate tedious day-to-day activities and deliver customized monthly reports comparing current and historical data.
Solutions to consider from a 3PL:
Full Outsourced Transportation
Technology and Management
Whether you have objected to working with a 3PL because your business is too big, too small, has never used brokers or only uses preferred carriers, it’s time to reconsider.
A 3PL is able to provide an evaluation of current processes and find solutions that will cut transportation spend and improve service and processes. Also, it can create shipment visibility and efficiently manage inventory.