Logistics Compliance: How to Manage Freight Process Risk with TMS

Logistics compliance technology supports best freight management practices.

U.S. transportation, shipping, and logistics often get ranked as one of the most risk-prone of all industries. Supply chain integration makes it easier to focus on logistics compliance throughout the entire network.

There is a lot to keep track of regarding logistics regulatory compliance and managing the inherent freight risk in the logistics industry. Freight transportation and logistics face many outside risks from increased market demands, evolving consumer needs, fluctuating economic conditions, and other significant factors. These risks and stress points require transportation companies and freight-shipping organizations to establish and maintain thorough and innovative risk management strategies.

As highlighted in a report from Transport Topics, industry leader Ronnie Davis pointed out how the marketplace is still in recovery mode. “We forecast rates to drop in line with the economy cooling off a bit and some shift of consumer spending from products to services.”

Fortunately, a well-implemented TMS platform can automate many of the most common logistics activities. It streamlines this compliance work into more efficient and manageable steps and actions. It is important to remember there are two primary forms of compliance: regulatory compliance and compliance with process standardization. This article addresses compliance with process standardization and what freight management parties need to know.

What Is Logistics Compliance?

Managing supply chain operations efficiently and complying with the ever-changing evolution of supply chain processes requires visibility and transparency. Teams not only need access to data and information. They must also be able to apply it to a rapidly evolving environment.
The ultimate goal of compliance in supply chain logistics management is overcoming freight risk. In this context, the risk is a failure to live up to all process requirements for executing a load. Without a robust governance structure within the systems of record, that’s an impractical goal.

The complexity of the modern supply chain regarding transportation and the geographic distances involved makes it challenging to maintain logistics compliance. Further, compliance requirements may vary from business to business. Smart transportation solutions help management teams improve decisions from start to finish.

The Benefits of Knowing How to Manage Freight Risk in the Logistics Industry

Planning makes a difference when managing a fleet and a team of drivers, whether in-house or outsourced through a third-party partner. The right TMS eliminates the hassle of manual monitoring for logistics compliance issues such as late arrivals and departures, failure to meet volume commitments for capacity, and beyond.

It takes a lot of effort to manage the risks and ensure everyone stays on the same page between shippers, carriers, and customers. Such efforts involve:

  • Close collaboration with all parties: suppliers, distributors, vendors, drivers, brokers, freight forwarders, carriers, and customers.
  • Careful monitoring of real-time statuses to avoid disruptions, protect services, and safeguard reputations.
  • Compliance program development and onboarding improve supply chain visibility and logistics optimization.
  • Continual collaboration between team members and partners helps shippers and carriers coordinate faster and more easily.
Given the abundance of freight risks in transportation, logistics compliance management requires meticulous planning.

5 Tips to Manage Logistics Compliance Risk

Risk management and logistics compliance solutions must remain a priority for transportation managers and team members. Managing compliance risks in logistics and transportation can be easier with a few basic considerations:
  1. Know Your Risks in Real-Time. Utilize data and ensure accurate and reliable information is used to make decisions and hold everyone accountable.
  2. Ensure All Teams Use the Right Systems to Execute Changes Within the Transportation Network. Obviously, not all companies will use the same systems, but that is where a unified, integrated platform like MercuryGate’s TMS can help.
  3. Guard Your Company Against Risks by Following the Same Rules for Onboarding New LSPs and Holding Them to Your Expectations. Proper vetting, planning, and tracking the performance of network partners can lower risk.
  4. Use Analytics to Know When Certain Modes or Carriers Fall Outside of Performance Expectations. Analytics can provide a lifeline for companies that are unsure what to track and when to implement penalties or corrective actions for network partners.
  5. Digitize Your Freight Routing Guide. The routing guide should be a versatile, digital series of process expectations. With the diversity in the market, the routing guide should be the cornerstone of all decisions for transportation. Thus, freight management parties should leverage waterfall-like tendering and scheduling processes to maintain logistics process compliance.

Having a dynamic transportation management workflow makes it easier to manage logistics compliance risks.

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Unify Your Logistics Compliance Strategy With a Singular Instance of Your TMS

Logistics compliance management often fails in supply chains today because companies lack a unifying approach and strategy. This gap makes it difficult for shippers and carriers of all sizes to overcome risks in transportation.

Teams that maintain real-time awareness and use proven methods and tools are better positioned to deal with issues and concerns regarding logistics compliance. Partnering with industry experts makes the entire process more manageable. Ready to find out more about how MercuryGate supports logistics compliance and governance?

Learn more about managing compliance through TMS.

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