Using Ancient Technology to Manage Freight Is No Way to Run a Railroad

The old days

This was how we used ancient technology to move freight. You may be aware that in the old days, we used machines like the one above to communicate with railroad computers. A Telex machine could transmit at 66 words per minute and Telex network time was expensive. To keep the cost down, you preset your message by using a paper punch tape. Once complete you snapped the tape into the reader dialed up the receiver and pushed send. Later we got TWX machines that could transmit 120 words per minute.

This was the technology until about 1980 when fax arrived to the masses and we could transmit pages at the remarkable speed of 2 or 4 minutes (higher quality at 4 minutes). Plain paper fax arrived in the early and mid-eighties. Fax cards for PCs came about in about 1990. They were expensive. New technology breakthroughs are generally expensive.

Mid-Eighties

TMS or Transportation Management Systems mainly originated in the mid-eighties written languages like COBOL and Fortran. They ran on mainframes and cost millions. Prices on technology always fall over time to innovators. New computer languages and modern cloud computing servers have dropped the prices on next generation TMS platforms to level affordable by companies of any size. Starter out of the box systems start at about $200.00 per month.

Today

ShippersEdge TMS offers a starter system called our Professional Edition which borrows most of the technology of our Enterprise Edition. It is a highly capable TMS and has advanced features you won’t find on Freightview and Kuebix. It does offer customization and advanced reporting. It offers shipment and document storage and you can receive electronic invoicing. (Yes we do EDI where needed) It offers file uploading to capture shipment information so your orders are in the system quickly and accurately. You can use the reporting features to export data to your other software platforms.

And Tomorrow

As your company grows we can add extremely advanced functionality, customized for you and fully integrate with any software platform for real time updating. Plus, you’ll be able to use the same interface you’ve been using and add the “I wish I had a button that does that does this and another one that does that” plus add functionality for all of your departments.

ShippersEdge is the most affordable full featured TMS on the market today.

Contact ShippersEdge email timothy.taylor@shipperesedge.com or by phone at 952-777-4421 or visit us on the web at www.shippersedgetms.com

How Shippers Compete Against Themselves in the Spot Market

How Shippers Compete Against Themselves in the Spot Market

You have had ever rising spot market freight costs. You’ve heard your broker explain about astonishing load to truck ratios, about equipment and driver shortages. Stop; just stop. First off, we do have a driver shortage (at $0.40 per mile) compounded by reduced actual miles driven due to the ELD mandate. One thing you shouldn’t do is offer your loads to multiple brokers.

There are NOT 30 loads for every available truck

Look, there are NOT 30 loads for every available truck, there can’t be, it’s not possible. Empirically, the load to truck ratio is exactly one-to-one. The only thing that changes is some commodities can’t travel as far due to increased transportation costs. It becomes more effective with some commodities to source them nearer the end user.

Drivers don’t post their trucks anymore because they get inundated with calls from brokers. That, along with multiple iterations of the same load by competing brokers, is why the load to truck ratios are so skewed. Drivers use their smartphone apps and shop for the highest paying rate. That there are so many brokers posting a load also being posted by other brokers, is driving up your rates. So, if you’re using multiple brokers for your loads; stop, stop driving up your own rates!

Asset based carriers do it too

Asset based carrier also have logistics [read brokerage] divisions and when you give them your load lineup they may well be posting that load on the spot market and tell you they don’t have capacity for you. They see the rates, on the spot market, they know where to make money and it’s not at low contract rates. They can and do place capacity in the spot market because it can pay twenty percent more than your rates. That situation will partially be solved upon contract renewals. They may even offer to cover some of your loads at higher spot market prices with a contracted truck.

Sometimes simply even asking for a rate from multiple brokers will cause appearances of the load you asked for a rate on to be posted on load boards. It happens all the time, even if you never tendered the load to them. Brokers generally know who their competition is and they can see your load being offered to the market, so they simply bid up the price to the trucker, secure a truck and call you. Meanwhile the broker you had given the load to can’t find a truck because he’s been priced out of the market.

What you need is a smart broker

What you really need is a smart broker, who can help you manage through this spiked environment. There are techniques that were used in other capacity constrained periods. If you want, contact me for more information.

A final note here. Driver pay is going up. I think it will be at or near sixty cents per mile by the end of 2019. It needs to go up. Over the Road truck driving is competing with local truck driving, construction and other busy areas of commerce for labor. A driver out on the road has expenses too for food and laundry and so on. They can work up to seventy hour weeks. Even at sixty cents per mile (about a 50% increase from December 2016) if the guy has to work 70 hours, that’s only a little better than $17.00 per hour.

ShippersEdge TMS is a tier-2 affordable full featured transportation management system for more information contact timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

 

 

Shippers Sabotage Spot Market

Shippers Sabotage Themselves in Spot Market

Many shippers don’t realize that they sabotage themselves in the freight spot market. It is standard doctrine that competitive bidding achieves a lower price. However, our application of that principle disrupts Adam Smith’s “Wealth of Nations” by creating artificial demand that results in higher shipping prices and less profit for shippers.

Sometimes just asking for a bid

Broadcast [and sometimes just asking for a bid] available loads to multiple brokers looking for the lowest cost. But, what actually happens is that multiple postings of the same shipment go out to the spot market load boards, creating falsely inflated demand. Truckers are smart and naturally will hold out for the highest price.

A new price higher price point for a given shipping lane is being breached every day; in part due to capacity stripped from the market by new electronic logging device requirements. As those thresholds rise, higher rates become the new normal, and it will be hard to drive those rates back down. Let’s also not forget the once inexhaustible supply of new trucking company entrants into the market, which is exhausting itself due to increased regulation and low driver pay.

Frankly they’ll hide their capacity

Shippers naturally will retreat from the spot market, and try and lock in contract rates There is a problem in that thinking as well. The spot market, actually pays more per mile than most major carrier bid lanes. It won’t be long before these major carriers shift more capacity to the spot market, frankly they’ll hide their capacity from you, the shipper.

We must remember that economic principles, properly understood and applied, will always serve the public and the logistics industry better than what we think is “normal” maneuvering.

See also this link  https://www.shippersedgetms.com/blog/logistics-softwa…spot-market-bids ‎

For more information, contact Tim Taylor at 952-777-4421 or timothy.taylor@shippersedge.com

TMS Solutions

Create new capacity in a tight market

Capacity in a tight market

Down below I talk about how to create capacity in a tight market, but first a little backstory. For thirty years I was a freight broker. I also trained at least a hundred more. This trick is in every broker’s book and could raise your freight rates. Here is a link (below) to the full LinkedIn article on it.

Summary of how to not use the spot market

Here is a summary but by far not the complete story. Essentially when you go to get a quote from multiple brokers, they are immediately posting that load to the load boards causing near outrageous load to truck ratios. 10 to 1 or 20 to 1 load ratios are not realistic and in fact are not true except for posting. The truckers see this and jump from broker to broker to see who will pay them the most. The net effect is freight rates go up.

Your intentions are good but your tactics need brushing up

While your intentions, to get the best rate are good in normal circumstances they actually hurt you when taking your freight to the spot market. Doing all your business with contracted carriers is probably also not realistic as they too see these tall rates in the  spot market and dedicate ever growing capacity to the spot maret while telling you no trucks available. They are not dummies.

All carriers are short of drivers due to electronic logs and an economy on the upswing. We do have tactics deployed through software, that can help you manage through this capacity shortage but they’re proprietary and you have to talk to me to get them. Remember I was a broker for 30 years, I know all the tricks.

 A link to the whole story

Here is a link to Confessions of a (Freight) Broker https://www.linkedin.com/pulse/confessions-broker-tim-taylor/

To get my advice on how to create new capacity in a tight market, write me at timothy.taylor@shippersedge.com or call me at 952-777-4421 also visit us on the web at www.shippersedgetms.com

Why having your vendors ship to you collect is a best practice

Why having your vendors ship to you collect is a best practice.

Many vendors ship prepaid or prepay and add and most markup freight charges. That in and of itself is a good reason to have your vendors ship to you collect on your account. There are more reasons one of the most important is visibility of your incoming shipments in transit. By having visibility, you can spot possible supply chain disruptions before they have a downstream bad affect.

Visibility is key

Using the capability of a transportation management system to track incoming shipments you can instantly see when and even if your materials shipped. By importing your purchase orders with a required in-house date, a TMS can be configured to issue a warning if a required shipment has not entered the system in time to meet your requirements and avoid a line shut down or disappointing customer with a back order.

Do you charge back your vendors for the additional freight charges on your order when they back order you? With a TMS you can track the additional freight charges when a vendor does not ship a full order. Back orders could be costing you more, in freight charges, than you think but who has time to track those costs using manual methods?

Trapped shipments

Are you a large distributor or manufacturer? Freight carriers often trap or hold shipments in a trailer to reduce deliveries. That could have significant savings for them and unstable delivery times for you. By using a TMS that tracks statuses like “arrived at terminal” and comparing to “out for delivery” date/time, you can work with your transportation providers to avoid having your freight held at the carrier’s yard and not delivering the same day it arrived.

ShippersEdge is a mid-tier transportation management system that can make you money, save you money and avoid delays on your incoming shipments. You can learn more at www.shippersedge.com/info or by writing to timothy.taylor@shippersedge.com 952-777-4421.

 

 

 

Visibility isn’t the Problem

Visibility isn’t the Problem

Visibility isn’t the problem, it’s having visibility of the problem, that’s the problem

Visibility of your supply chain is good, right? Having visibility isn’t the problem, it’s having visibility of the problem, that’s the problem. Let’s face it, you need answers to questions, questions like, has my supplier shipped or is the transportation provider on time. How about before it’s shipped, is the mode of transport selected adequate to get the shipment to your facility at the right time.

It could be about saving your production line.

When loading your TMS, you need data from your production facility and your sourcing department and then when your vendor ships, you choose the most economical mode for the circumstance. It’s not always about saving money, it could be about saving your production line.

ShippersEdge can be taught to present the question or even alarm you if your vendor is late in shipping. We know the transit times, we can present a solution. If your vendor hasn’t logged on to the vendor portal to ship the shipment or we don’t see it in your account at your transportation provider, we can tell you.

Advanced transportation management systems have this capability but most don’t present the problems and the possible solutions very well. There’s endless data presented but not in an organized or easily interpreted fashion. Mind boggling and mind numbing gridded presentation screens hidden by layers of menus that seek more to present the sophistication of the software than help you identify and solve problems. ShippersEdge took a different view, literally, based on simplicity of operation and presentation.

ShippersEdge is a mid-tier TMS with outstanding power and customizable functionality. We built it with an eye for simplicity of training and use. We use business rules we develop together and apply them to your supply chain management software.

ShippersEdge, we’ll keep you running.

Contact ShippersEdge at www.shippersedge.com/info or call us at 952-777-4421 or email me directly at timothy.taylor@shippersedge.com

Can a 3PL use ShippersEdge?

Can a 3PL use ShippersEdge?

Yes. ShippersEdge can allow your client a direct portal to rate and book shipments. ShippersEdge would be branded to your company’s logo. We can work with shipper specific pricing or blanket pricing. We also work with rate tables if needed and can accommodate specialty rating such as pallet rates, dimensional rating (dim rates) and lineal foot rates.

One of the best parts of ShippersEdge is its ease of use. People can be operational in minutes rather than days. Training replacement workers is a snap. Clients and you are both alerted if a shipment price goes up due to weight, class or accessorial charges.

Paperless invoicing to your clients and from your carriers is available. Invoices are automatically audited against expected estimated charges. Exceptions are placed in their own tab for easy visibility. Original rating criteria, including rate quote number are saved. Easily link to the carrier’s website to review documentation.

Transit issue are flagged to get ahead of problems with minimal impact to your clients and their customers. An audit trail is created on transit time exceptions for use if ordering expedited services. Your customers can choose to send email alerts to others when an order is shipped complete with a tracking link for easy live tracing on the carrier’s websites.

Full reporting modules available for both you and your clients. Most reporting is into an Excel spreadsheet. The user can specify selection criteria(s) and which fields to export. Templates of common reports can be saved. Custom and automated reports can be set up by ShippersEdge. A handy dashboard can be customized for your clients and your firm.

Your clients can also use ShippersEdge to book their truckload shipments. You choose whether they can also communicate with other truckload providers through the system. You will always have visibility into the system on any client.

Integrations are common for us and we can integrate into almost anything. Integration can be as simple as file uploads in batch or API integrations if the software to be integrated with is capable. We also support OBDC.

Contact ShippersEdge today at 952-777-4451 or visit us on the web at www.shippersedge.com/info

Mitigating the cost of motor carrier reweighs

Mitigating the cost of motor carrier reweighs

Similar to airlines, LTL carriers are constantly trying to improve their yields. One of the tools at their disposal is to reweigh shipments. Scales built right into the forklift itself has made the process of reweighing your shipment easy and lucrative. Some carriers will also charge you a fee if their scaled weight differs from what’s on the bill of lading.

Carriers don’t lower weights

The simple little truth is carriers don’t lower weights if the weight variance results in a scaled weight below what is on the bill of lading. So, it is a one-way street when it comes to shipment weight changes, always up; never down.

Intensity of the weight changes

Here’s where you can fight back. If you keep a record of weight changes due to scaling at the carrier’s dock, you can chart the number of weight revisions on your shipments. What to keep track of? Not only the number of reweighed shipments but the intensity of the weight changes. If carrier A) changed 10% of the shipments you tendered to them and changed the weight an average of 10%, that’s one number. What if carrier B) changed the weight only 8% of the time but the weight changes went up 15%.

Keeping track of weight changes

A transportation management system can keep track of weight changes and give you the analytical tools to see what carriers are creating the most increases in cost. If you don’t have one, you’d have to do that manually and what a laborious chore.

Fight back

Another way to fight back is to monitor weight changes while the shipment is in route and have the destination terminal weigh the shipment again if you believe there is an error. A transportation management system that is constantly interrogating the carrier’s server regularly and notifying you when a reweigh is entered into their system. Did you know that to remain accurate, forklift scales should be calibrated every twelve months?

ShippersEdge is an easy to use, value packed TMS that can pay big dividends through monitoring carrier reweighs and providing you the tools to make intelligent decisions. Contact ShippersEdge at 952-777-4421 or visit us on the web at www.shippersedge.com/info

How visibility in a TMS reduces costs

How visibility in a TMS reduces costs

Don’t know all the ways a TMS can help you? Read on.

Many people assume a TMS will save shipping costs but don’t know all the ways a TMS helps you manage your freight and where all this cost savings will come from. Most large shippers will tell you their TMS delivers approximately an 8% cost savings. How can that be? Most people ask. Hint it’s not all in the freight rates, to be sure, some of it is, but there are a number of opportunities unmasked when you have the power of data in your hands either for analytics or in real time for execution.

Keeping tabs on your carrier’s billing practices is a big monotonous job compounded by not always having the right tools. The fact is not all carrier’s rates are created equal. Accessorial charges differ, carrier to carrier, as do minimum charges, fuel surcharge, the number and intensity of reweight and inspections. Carriers are fighting a chronic driver shortage about to be compounded by mandatory ELDs come December 17, 2017. They are trying to enhance yields the way the airlines have done; yikes. If you’re trying to manage these variables past tense, you’ve already lost the war.

ROI-cost

Cost vs. Functionality

What can you do about it? The first thing is to identify and quantify the problem through harnessing your data in real time. A transportation management system that’s easy to use and is made for your size business is a tool that pays back in many ways. In addition to streamlining your processes which will give you time to work on a problem, a TMS provides objective data to analyze the problem.

In working with LTL shippers one of the big pain points is the number of reweighs. I also ask them about the intensity of reweighs, some cannot answer that question. One should assume that if one carrier is reweighing more often but another is causing larger increases in weight, that we’d know the economic impact of the two and manage it. When the carrier who is reweighing more often and with more intensity (greater weight changes) asks why you’re not using him as much, you can show him. Many people don’t or have only subjective knowledge based on assumptions. With a modern TMS the answer to both questions of frequency and intensity of reweighing could be had.

In addition to reweighing increasing the cost of a freight charge, it also creates a clerical component that didn’t have to occur. The root causes of the reweighs should or could also be examined. Maybe a part or a specific SKU has a greater incidence of reweighs. If so an investigation should be undertaken to validate the calculated weight against proclaimed weight certificates from the trucker. Did our pallet type or vendor change? Sometimes weights for given items were established years ago and never updated. Comparing rates on erroneous weights of shipments is never a good idea.

Delivering on time

Are your shipments delivering on time? Sometimes you choose a carrier or a carrier’s expedited service level and don’t get what you paid for. Our TMS can be programmed to keep track of the low-cost provider, compare that to the provider used and then to the expected service level and the actualized service level. If the service you paid for isn’t what is delivered, a variance is noted and if you selected an enhanced service level a claim for the differential can be made on the spot, automatically. Carriers on time efficiency can also be mapped over a period of time to be used in vendor discussions and selection.

Accessorial charges do vary

What about accessorial charges? Accessorial charges do vary carrier to carrier and they are negotiable. The same with fuel surcharge and absolute minimum charge by region. They vary and they’re negotiable and they add up. Having accurate data in hand at negotiating time is essential to having a goal and a measuring tool.

TMS Flowchart

Spot market quotes for LTL

Another point of on the spot negotiation is to get large shipment quotes not only from your regular LTL carriers but from spot market providers. Having a tool to first identify and then assist in getting a rate for your larger LTL shipments can have immediate cost saving benefits and sometime result in less damage by having the shipment loaded to ride. It may also result in fast transit times as the dwell time in breakbulk facilities is reduced.

1%-6% of LTL freight bills contain inaccuracies

A further point of remarkable savings is flagging exceptions such as freight charges that exceed the anticipated charge. Nobody likes to audit freight bills, even freight bill auditors complain about their work sometimes. If you only had to audit those invoices that do not match to an approved amount, life could be easier. It was recently reported that 1%-6% of LTL freight bills contain inaccuracies. It was not noted what the average dollar value of the discrepancy is.

Hand keying shipping information leads to errors

Inaccurate deliveries while rare, can create a problem with customer satisfaction and possible redelivery charges. Hand keying of orders with by your company or the freight company leads to typos and typos lead to mistakes. If you can positively pin it on the freight company fine but it took work and delayed the shipment, probably subjected it to further handling and made it damage prone. By using a TMS to electronically transmit the information to the carrier you eliminate a human touch. By integrating your TMS to your ERP or WMS you’ve eliminated two touches.

Timely notification of shipment exceptions is imperative

Timely notification of shipment exceptions is imperative to get ahead of problems. If a shipment has been reweighed, reclassified, had an unexpected accessorial charge applied the time to deal with, if you suspect the change is in error, is when the shipment is enroute, not after delivery when it is too late to have the carrier investigate. A TMS could be, as a for instance, programmed to automatically challenge reweighs above a certain tolerance.

Organize your RFPs

TMS is also a vehicle to organize your RFPs. Ah yes, the annual RFP and its concomitant analysis is now laid asunder by modern technology. A TMS can assess your RFP on the fly making it painless to source the low-cost provider in any lane. A TMS can also run a period’s historical shipping (providing it is in the system) against new bids and return a value of the cost saving or increase. It can also do this on a net basis by not only analyzing the provider previously used but possible the new low-cost provider. One should also flag spot market rates to be excluded from the analysis lest they be included at shelf rates in the study.

Consolidations are easy

Screen Shot 2017-06-23 at 1.52.19 PM

Certainly, not the last way a TMS can make you money but often not considered due to complexities and time constraints are consolidations. Consolidation opportunities can be identified by use of a simple optimizer and run against standard LTL charges and produce a yield for your consolidation. It can then produce a cost from your truckload providers and compare. When you consider consolidations don’t get reweighed, reclassified and are not subject to breakbulk risks of damage, the decrease in back office clerical disruption often makes a consolidation not just a cost saving adventure but a work of art.

Hand keying of paper invoices has a chance of error

There also is accounting, accounting’s job is to enter freight bills into a payment system, possibly get the recorded or appended to the order and do it all quickly and without mistakes. Any hand keying of paper invoices has a chance of error. Also, tying the invoice to the proper sales or purchase order is sometimes challenging at best. By integrating your TMS with your accounts payable you can assure accuracy and visibility throughout the transaction cycle.

Visibility does not end with management, visibility should be extending to the entire stakeholder chain. Suppliers, customers, sales and customer service can gain visibility properly restricted if required into the supply chain. By providing visibility, you gain back time wasted on interdepartmental information exchange and create self-serve satisfaction throughout the constituency. Many man hours are wasted running down information that can be accessible at the click of a button.

Identifying supplier routing errors

Identifying supplier routing errors takes time, or used to take time. Modern TMS technology can identify supplier routing errors and calculate the back charge automatically. Better yet routing links can be imbedded with purchase orders ensuring that your vendor uses the right carrier and creating a shipment notification to the purchasing department, receiving and production. Get ahead of the curve not behind the eight ball.

Implementation

Implementation of a TMS depends on the level of customization required for the build out. Training though in today’s easy to use user interfaces has decreased substantially. The operations screen of a TMS should not look like a spreadsheet on crack cocaine. Today’s mid-tier TMS products were built to be easy to use because they had to be. The developers knew that mid-tier TMS savings cannot be eaten up by laborious training and retraining.

How much

How much does TMS technology cost?  Fully integrated non-customized mid-tier TMS products can usually be provided under $2.00 a transaction for base level functionality and a modest to low five figure integration and setup cost. Enhanced functionality comes at a price but can sometimes increase ROI by multiples; think optimization and other enhanced features. Shippers have reported ROIs in the 30-day range and soft cost saving, meaning people’s time in the hundreds of man hours per person. Just gaining visibility alone is generally worth the cost of admission. The case for a TMS has never been clearer. The cost has dropped so as to be affordable by companies with only modest freight spends. The only question is why didn’t we do this sooner. Hint the technology is new.

At ShippersEdge we recommend a phased implementation. You can gradually retire an expensive legacy TMS or install one for the first time. Eventually all department can come onboard except engineers. I have nothing against engineers but I think they’d tell you how to build the thing. Just seeing if you were paying attention. Have fun.

Contact ShippersEdge

Contact ShippersEdge at 952-777-4421 or visit us on the web at www.shippersedge.com/info

Software for Shipping

Software for Shipping

If you are looking for software for shipping take a look at innovative shipping software from ShippersEdge. ShippersEdge has been on the market as a hosted logistics software since 2002. Always in development, ShippersEdge takes the drudgery out of procuring your low-cost provider and alerts you to pending problems in your shipping both inbound and outbound.

ShippersEdge is expandable to fully integrated transportation management system or can be deployed as a stand-alone solution that has advanced capabilities for managing your transportation spend and quality. It is a one stop solution for all things shipping.

What can ShippersEdge do that competing product will not do? Here is a partial list:

Ability to upload rate tables for carriers that do not do API rate exchange

Use it to receive freight bills electronically or upload invoices and documents

It can be configured to give your customers a tracking link in an email

It can also be configured to provide tracking for your website

It can be configured to provide shipping charges for e-commerce

It can provide a portal to your non-electronic carriers to update tracking

It has a built-in freight bill auditing function

It has consolidation and basic optimization built-in

There is all the basic capability that people expect in a developed TMS product such as rate retrieval from all your providers displaying estimated freight charges in one place. Tracking and tracing with exception management and electronic pickup requests. We also display freight charge change notification which give you a chance to fix a problem before it’s too late. We can provide tracking information to your customers if desired; either through and email with a hyperlink or provide that information for your website.

ShippersEdge is easy to deploy and we do the work for you. No long training and setup is required. Too often, self-setup goes awry and becomes a time burden. ShippersEdge is a managed system so you don’t need a super-user to be able to use it. Its user interface is very intuitive so training is a snap and people are productive from the start.

Our client report time savings and hard dollar savings from the start and many choose to integrate with their existing management software to save even more time. You don’t have to integrate; the choice is yours. Contact ShippersEdge at 952-777-4421 or visit us on the web at www.shippersedge.com/info for more information.