Freight Modality Optimization: Sometimes More Modes Make More Money

Freight Modality Optimization

It could be said that today’s modern supply chain is sick. The industry still suffers from a trucking shortage, capacity problems, struggles with accessing (and using) data, and numerous other issues. As carriers look to make up profits and maintain operations, especially as more trucking companies shuttered their doors in 2018 and 2019, shippers pay the ultimate price. Higher rates become reality, and the next set of general rate increases (GRI) are around the corner. Fortunately, innovative supply chain shipping strategies, including multimodal shipping, can save money. Unfortunately, those same opportunities can add to expenses without the proper analysis of available modes, shipping durations, and carrier reliability. In this space, freight modality optimization allows shippers to understand their actual use of multimodal shipping and squeeze every drop from its use.

Causes of Higher Freight Spend

Before getting into the details of multimodal shipping and what freight shippers can do to keep freight costs under control, it is important to understand the causes of higher freight spend. As reported by CNN Business in 2017, “more than 70% of goods in the United States hit the highway at some point before they get to your home, according to the American Trucking Association, an industry trade group.” There is not a way to simply avoid the shipping industry as a modern business. This implies that everyone and every business are looking for more shipping options and the best rates possible. Product prices would usually inflate in response to make up for higher spend, but in the age of e-commerce, higher product pricing only draws the ire of customers. Customers are now directly impacting higher freight spend. It is customers’ demands that force companies to continuously operate on paper-thin margins and maximize ROI on all improvements.

Freight Modality Optimization Improves Access to Loads, Routes, and Lower Spot Rates

Using the right software, such as a TMS, to improve multimodal shipping is essential to true freight modality optimization. Regardless of whether shipping an item by land, sea, air, or a multi-leg combination, shippers need to verify that their modes are the best choice for the shipment. The MercuryGate transportation management platform makes this possible, tracking multi-leg data to gain visibility into activities and understand the likelihood of risks for all modes and potential routes. This information can be further analyzed with automated algorithms and analytics to assess the viability of a given multimodal shipping plan for each shipment. As the system runs through robotic process automation, the whole process is continuously optimized and improved. Robotic process automation allows artificial intelligence and machine learning to take an added role within the system, effectively replacing physical workers, to automatically generate responses to manual, email queries, connect shippers to carriers, reverse engineer best trade routes based on historical data, and more.

How the Right Software Helps Companies Leverage Better Modality

Using the right software, i.e. a TMS, to improve multimodal shipping is essential to true freight modality optimization. Regardless of whether shipping an item by land, sea, air, or a multi-leg combination, shippers need to verify that their modes are the best choice for the shipment. The MercuryGate transportation management platform makes this possible, tracking multi-leg data to gain visibility into activities and understand the likelihood of risks coming to maturity for all modes and potential routes. Thus, this information can be further analyzed with automated algorithms and analytics to assess the viability of a given multimodal shipping plan for each shipment. As the system runs through robotic process automation, the whole process is continuously optimized and improved. Robotic process automation allows artificial intelligence and machine learning to take an added role within the system, effectively replacing physical workers, to automatically generate responses to manual, email queries, connect shippers to carriers, reverse engineer best trade routes based on historical data, and more.

Discover the Value of Optimized Freight Management

Optimized freight management is about much more than just finding a workable TMS. The best solution must embrace your full use of available shipping modes, as well as multimodal optimization. Stop trying to leverage multimodal shipping without really understanding its costs and benefits by implementing a software-based on intuitive, ongoing freight modality optimization.

Request a MercuryGate demo now to find out more about how freight modality optimization could benefit your supply chain.

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