Freight Savings: Implementing a TMS Can Save Even More Than You Think

Optimize trucking with technology

Recurring freight savings is the grand prize for shippers. Finding freight savings, however, can feel downright impossible. Consumers want faster, free, and intelligent shipping. Customers want the world and then some. 

Fortunately, shippers that take the time to understand the roadblocks to achieve freight savings can apply sophisticated capabilities, powered by TMS, to realize savings. Of course, other benefits also come with implementing a TMS, including automated booking capabilities, securing additional capacity during peak demand periods, enhanced visibility, and much more says Logistics Management.

Where Do “Cost Vampires” Exist in the Modern Supply Chain?

High transportation costs have become routine in the modern supply chain. As customers increasingly demand free and fast shipping, supply chains must respond with faster, more dependable services. 

These services come at a cost, which eats away at profitability, but they are simply impossible to avoid unless you provide the proper strategy and technology. At the same time, shippers must keep an eye on the prize–better service and quality. Before making any changes, supply chain leaders need to understand the top cost contributors in the modern supply chain and how they drag your organization down.

  • Poor visibility that leads to higher carrying costs. A lack of clarity increases the risk of over-and under-ordering, creating a backlash among consumers.
  • Inability to understand inventory cycle time. Poor insight into inventory cycle time leads to an ill-equipped dock, not to mention delays in tendering orders for shipping.
  • Limited access to carrier data. Failure to put carrier data to use leads to even graver concerns, including double-billing, failure to provide accurate shipment data, and inaccurate rate quoting.
  • Inability to use real-time carrier data. Speaking of quotes, inaccurate and outdated carrier information effectively puts current operations behind the times. Instead of relying on the most recent update, shippers need to know where they stand right now.
  • Limited reporting of transportation data/invoices and accountability. Lastly, poor reporting capabilities lead to assumptions, creating risk, and adding to freight spend.
  • Inability to access omni/multimodal rates. Not all TMS systems can rate every mode at once. This is especially true around parcel and sometimes tariff-based LTL rates. If a shipper must use multiple systems to rate each mode, they often resort to an inefficient, outdated routing guide. To this point, omnimodal rating has reduced costs by 10% and more for some MercuryGate customers. When combined with optimization, immediate multimodal rating for all shipments reduced costs by over 50%. More available rates amount to better savings.

Using a TMS Unlocks Freight Savings

Today’s high transportation costs are the result of putting new processes in place to give customers what they want— fast and free shipping. 

As explained by Supply Chain Quarterly, this is a non-negotiable tactic, and shippers are left holding the proverbial bag. At the same time, fuel costs continue to increase. New tariffs come into play. The seasons change. Anything can happen. It creates massive uncertainty. Fortunately, using a TMS can unlock significant freight savings, provided shippers understand how to maximize their value.

How to Maximize ROI and Freight Savings With Your TMS

Maximizing the value of a TMS may sound simple, but it reflects a comprehensive approach to using the system. 

Users should follow these steps to maximize ROI:

  1. Use the TMS for every transaction.
  2. Gather data from all carriers and tenders to understand what is happening.
  3. Connect systems and services to provide real-time access to information.
  4. Ensure team members understand how to use the system, taking advantage of vendor-provided resources for education.
  5. Use data to measure the performance and ROI of the system.
  6. Integrate labor management and the WMS with your TMS to gain end-to-end control over all functions.
  7. Onboard new carriers as they become available.
  8. Use reporting features to automate the back-office processes in managing freight.

Recapture Costs Through Better Logistics Management and a Robust TMS Now

A robust TMS will empower shippers and LSPs to recapture expenses and keep freight spend under control. While literally thousands of modern systems exist, it is equally important to look for a system and vendor with a well-established reputation and deployment model. MercuryGate has that required prestige and can help your company achieve strong ROI and expansive freight savings.

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