Moving Logistics In-House

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 timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

Cargo Security

Theft by Misrepresentation of Identity

Here’s a scenario. Friday afternoon, an unsuspecting broker gets a call on a load of grapes from California to Toronto from a trucker based in Iowa. This trucker has one truck and says he can do the load. He also has a Gmail address using the name of the trucker. Broker makes the deal, sends the contract, service confirmation and his packet. Carrier executes the contract and service confirmation and sends back his carrier packet. Deal done, broker knocks off for the day.

Later he gets an email letting him know the load has been picked up, ETA in Toronto Tuesday morning and the appointment is made. Tuesday morning comes and the load has failed to arrive. What happened. He calls the carrier and gets an answering machine. He writes to the Gmail address, no response. Eventually a claim arrives for the missing load of grapes to the tune of $60,000. What happened?

In reviewing the claim, he notes that the only ID provided is the license plate on the trailer, nothing on the driver or the plate on the tractor. That license plate checked out to a junked trailer in a salvage yard. Driver’s signature is difficult to make out. A claim is presented to the trucker at his address in Iowa. Trucker denies any knowledge of the load, says that is not his signature and his logs show he was not in California.

This trucker’s office is not attended regularly. He uses an answering machine and while he had gotten messages about this load, he knew he hadn’t hauled the load and reckoned it was a mistake. Thieves look for one truck operations and check the presence or rather non-presence of personnel attending the phone.

The answer in this theft is phone number spoofing. The thieves, probably in cahoots with the shipping location, spoofed the solo operator’s phone number and created a Gmail account to send and receive documents. To the unsuspecting broker, he never called back the carrier to confirm the ID. Always call back a new carrier on the number provided in the Safer system or in FMCSA records. Check inspections, no inspections, noload. Also, if a driver on the road calls, verify he is who he says he is. Run his license plate, it will find inspection records.

Most cargo thefts originate on Thursdays and Fridays and especially on log weekend. This gives the thieves plenty of time to fence the stolen goods. Commodities without serial numbers are especially vulnerable. Most cargo theft involves an insider with enough knowledge of the load. Give your shippers the license plate number for the tractor and have them photo copy the driver’s license.

Shippers, it is a best practice to tighten your security including photo ID and license plate numbers. Require your brokers to provide this information to you prior to loading.

Tim Taylor

 

 

Why your ERP’s TMS is not Always the Best Choice

Why your ERP’s TMS is not Always the Best Choice

Many of the large ERP platforms have a TMS module available for install. There are many reasons to consider using the ERP module of your TMS and also there are reasons to choose a different TMS.

Two Distinct Advantages

There are two distinct advantages of using an independent TMS. The first is time, speed and ease of deployment. Delays and hiccups in ERP deployment are legendary. So bad are some implementations that they’ve cratered earning and market value, sometimes for years after the implementation. An independent TMS is used to interacting with many different ERPs, knows the pitfalls and idiosyncrasies of different ERP platforms and is adept at overcoming their shortfalls.

The second distinct advantage of an independent TMS over an ERP’s TMS module is the ease of use and ease of customization. Typically, large ERP platforms have acquired TMS modules and bolted them onto the platform. This is fine but many of those TMS programs were written for mega companies many years ago. The operation of those TMS programs is generally extreme overkill for mid-sized companies and consequently the operation is often complex and cumbersome.

Some other advantages of using an independent TMS include:

Speed of deployment, ERPs can take years to deploy successfully in some cases. The TMS module is usually one of the last things to be deployed.

Price can be a factor. Independent TMS platforms are built with small to midsized companies in mind and are priced accordingly. The ERP TMS modules by comparison were built for very large enterprises.

Customization is usually faster, better and less expensive. The mega TMS modules in large ERP platforms were written when man-years of programming were the norm. Unwinding that programming to create any custom application is often very time consuming.

Cloud deployment is not always available with your ERP’s TMS module, therefore upgrades and scalable deployment may tax your IT departments schedule and be delayed or deferred.

ShippersEdge is a tier II SaaS deployed TMS specially tailored to the SMB market. We interface seamlessly with any ERP and offer an easy to learn, easy to use user interface. ShippersEdge is affordable logistics software.

For more information, timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

A surefire way to get more owner operator trucks

A surefire way to get more owner operator trucks

It’s about Fuel Surcharge

To get more owner operators interested in your loads, increase the fuel surcharge portion of truck pay. Owner operators typically get 100% of fuel surcharge revenue. Make your load more attractive to them by setting your fuel surcharge above market. If you’re using a flat pay per load, separate out fuel surcharge and let the drivers know.

Owner Operators are Especially prevalent in Platform Equipment

While owner operators are in all facets of trucking, they’re especially prevalent in platform equipment, such as flatbeds, step decks and other specialty equipment and refrigerated hauling. Drivers can accept or decline loads under their independent operators contract with their carrier. Differentiate yourself by slightly decreasing the base truck pay and increasing the fuel surcharge component of the load. Your owner operators will appreciate it.

Owner Operators Bore the Brunt of the ELD Mandate

If you stop and think through the ELD mandate, owner operators bore the brunt of the productivity decrease. Sure, the carriers themselves saw decreases in mile per truck, they more than made up for it with increased spot market rates. Drivers in congested areas of the country, especially so, whereas drivers in the wide-open west did not see as much of a reduction in miles per week.

Be kind to your owner operators, in most cases, they ultimately decide which loads they take and which ones they don’t.

ShippersEdge can be configured to automatically enhance fuel surcharge by slightly reducing base pay. Ask us about this. timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

 

13 Things Shippers Need to Know if They’re Going to Play in the Spot Market Without a Broker

Things Shippers Need to Know if They’re Going to Play in the Spot Market

 

  1. It’s the wild, wild west in the spot market. Be prepared to sift through the chaff to find your gems. There are a lot of scam artists in the spot market. Be very wary of 1 truck operations.
  2. Inspections matter one. If you’re seeing a trucker take a number of your loads check their inspections and make sure their being inspected. A low number of inspections per vehicle can indicate that trucker is double brokering your loads.
  3. Inspections matter two. You do need to look at https://safer.fmcsa.dot.gov/ and dive into inspections. Why? Because excessive equipment problems are a sign of financial instability. You can fix driver HOS violations but only money can fix equipment problems.
  4. Once you’ve entered the market your rates will fall. You should expect 15-20% reductions. A look at the largest publicly held freight broker’s publicly filed financial statements will validate this fact.
  5. You should hire an experienced freight broker to run your program and they don’t come cheap. Good brokers make high five figures and many reach into six figures. You will get what you pay for.
  6. When you’re talking to a dispatcher of a trucker, ask the question, are you unloaded now? Where are you? Where are your hours at? Listen very carefully to the answers. If there’s uncertainty in their voice, hang up.
  7. Get the license plate number of the truck, Google that plate number. By Googling the plate, the inspections for that truck should show up. No inspections, don’t load them Send the plate number to your loading dock for validation upon arrival.
  8. Take a photo copy of the driver’s ID. Walk around the truck. Make sure plate number matches. It is a good idea to take a picture of the placard on the side of the door and send it to the file. Get the drivers cell phone number.
  9. Be prepared for factors to call you validating the load and the amount. Better yet set up your own quick pay and advancing for further discounted freight charges. Factors charge 2-7% it’s well worth while to save this money yourself and knock out factors.
  10. You’ll need software to manage your spot market activities. Software that automatically does the inspection searching. Software that produces a trip contract. Software that assists in onboarding by checking insurance. shippersedgetms.com
  11. You need to keep track of lane histories. Truckers typically run the same lanes over and over. If you can book a reliable trucker while he’s still headed into your town, you are time and money ahead of the competition.
  12. Fuel surcharge goes to the owner operators be generous with your fuel surcharge. Drivers have a say in who and what they load. Giving the drivers a larger share of the load pay will make you a preferred shipper in the eyes of the driver.
  13. Watch out for crooks. The trucking world like any industry has their share of them and one crook can ruin your day pretty quickly. Double brokering, load theft are just two of the numerous problems facing the industry.

About the author. Tim Taylor is a recovering freight broker now marketing transportation management software for ShippersEdgeTMS.com he can be reached at timothy.taylor@shippersedge.com or by phone at 952-777-4421