What to expect when moving logistics in-house
Ten years ago, it was worth it to use a 3PL to manage your logistics management mainly because of the high cost of acquiring and maintaining the technology. Now more and more shippers are moving logistics in-house. Rating, managing and procuring freight transportation resources is time consuming and best if aided by technology. Today the technology resources are infinitely more refined and affordable than just a few years ago.
The biggest growth in transportation management software has been in the small to mid-sized business arena. Companies at or near even one million in transportation spend are able to take advantage of simple cloud based TMS applications. Companies who are at a larger spends who are not taking advantage of logistics management software are simply wasting resources and straight out transportation spend.
Acquisition costs of TMS applications rage from mere hundreds to low five figures in setup costs and monthly expenditures in the hundreds to low four figures are reported by most firms. The number of modifications from base functionality often affecting the costs of setup and configuration. The pricing of a TMS is not as important as what you can get out of it. ROIs can be achieved sometimes inside of a month.
With a TMS what you’re looking for is a leap from time wasting semi or completely manual methods of management such as spreadsheets and sticky notes. The quantitative leap to up-to-date technology is revealing in not only the speed and efficiency but the ability to provide analytics to make your decision making easier and more productive. You cannot manage what you can’t see.
A TMS can see or provide visibility into alternative scenarios for cost improvement and service improvement creating a more satisfying customer experience as well as a bottom line value. We now see the customer’s wanted in-house date and can compare to expect transit times. High address book functionality is often overlooked as a way of improving your customer’s service and satisfaction.
Freight audit and payment, an often-outsourced routine can be effectively managed in-house and seamlessly integrated with your payables. Often times the cost savings of being able to insource freight audit and payment can in and of itself, pay for a TMS.
Good reporting capabilities can also track the number of variances and rating errors by carrier providing KPIs for you to manage by. What good is great discount if every shipment exceeds estimated costs due to carriers trying to increase their yield by reweighing and dimensioning every shipment you give them. Certain carriers and even specific terminals within a carrier can be overly aggressive when it comes to weighing and inspection. What happens on a density classification when they add 200lbs to your shipment? Do they now classify it at a higher density? The answer is usually no.
Another key problem for transportation consumers today is available capacity and its incumbent effect on transportation rates. In some cases, especially with refrigerated and platform (flatbed) equipment. These areas are dominated by owner operators who finally see some sense of relief after suffering through eight years of recession and an historic anemic recovery. The demand for their services and frankly all commercial drivers will only intensify. Sourcing capacity can be difficult but with advanced technology the job can be made simpler.
What about shippers entering the spot market themselves? The fastest growing segment of the market for load boards is shippers self-managing their spot sourcing and trying to save the broker markup. You really should not even attempt to enter the spot market without good technology backing you up and frankly hiring personnel experienced in spot market vetting of truckers. Read my blog article on cargo security as only one pothole in a long road of ignominy in spot market dealings. https://www.shippersedgetms.com/blog/cargo-security
In summation, you’d be foolish not to explore insourcing your transportation and logistics management. If you’re already self-managing your logistics, technology can make your experience better and leaner while increasing your available information for improved decision making.
ShippersEdge TMS is a high value, modestly priced SaaS transportation management system. We can be reached at 952-777-4421 firstname.lastname@example.org or visit us on the web at www.shippersedgetms.com