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