Reduce Freight Costs using Automation

Freight optimization benefits from technology.

Few topics stimulate more interest and conversation than automation in the supply chain. Automation provides shippers with a way to reduce freight costs and limit the inefficiencies and risks around managing freight. 

Automation may be applied in a virtual setting, such as automated carrier scheduling and routing, or it can also be used through robotics to reduce freight costs through fewer workers, explains Supply Chain 24/7. While much hype remains around the topic of automation, shippers are also dealing with real challenges. 

Rising demand and limited capacity threaten successful freight delivery. While automation may reduce freight costs, shippers must understand why automation is the solution to inbound and outbound cost control, and a few best practices to guarantee real results.

The High Costs of Manual Freight Management Processes

Take a moment to think about what forms the basis of supply chain costs within your organization. Start with inbound freight. Inventory needs to be cataloged, and at the right intervals, more stock is ordered. When the freight arrives, someone needs to put it away, check it for damage, review slot optimization, and more. It is an immensely complex process, and when freight begins to move through outbound channels, such as during order fulfillment, more costs arise. Shippers can spend hours reviewing carrier rates per day, and they may still be getting the short end of the stick. Manual freight management leads to higher spend on freight.

How Automation Reduce Freight Cost Spend

Automation is directly associated with lowering freight spend. Shippers realize improvements through streamlined shipment tendering, relying on advanced algorithms and rulesets to select a competitive carrier per shipment. Even implementing a transportation management system (TMS) can still leave room for error, but it is far more efficient then approaching freight management from a manual perspective.
Automation also holds great value in reducing the risk of compliance violations, keeping all documents in a centralized location. If a problem arises, algorithms take control, automating exception management. Remember, things will go wrong. Automation lowers the risks and inefficiencies associated with managing those challenges, enabling a better, faster way to reduce freight costs.

Best Practices to Deploy and Apply Automation to Reduce Freight Costs

Automation is not a one-size-fits-all standard. Any repetitive process can be automated, but the goals are to ensure automation’s success. 

It can sometimes be difficult to identify the real benefits of automation, reports Inbound Logistics, especially as overall freight costs climb. With that in mind, those that have implemented automated freight management typically see only a 1.3% increase in freight spend, compared to 14% in those that rely on traditional approaches. To reduce deployment delays and apply automation, shippers should follow these best practices:

  1. Automate carrier contract management, including contact information.
  2. Track all added charges, including accessorials, inland freight charges, fuel surcharges, and more.
  3. Connect your TMS to carrier portals to ensure real-time rate quoting.
  4. Automate freight consolidation/deconsolidation practices, reducing the time to determine what gets consolidated and where it is going, notes Supply Chain 24/7.
  5. Audit freight invoices, taking advantage of third-party services to avoid pitfalls.
  6. Connect inbound freight vendor systems to your TMS, eliminating the concerns over replenishment routing and scheduling.
  7. Use your TMS to track and manage returns management, avoiding bottlenecks, and even reshipping undamaged returns to customers at discounted rates.

Keep Your Freight Costs Under Control With an Automated TMS Now

As omnichannel continues to march toward dominance in the global supply chain, shippers will face new challenges and opportunities. Freight spend may grow unhampered, and shippers will see their existing processes put to the test. However, automation can radically reduce the stress associated with managing freight, achieving a sustainable way to reduce freight costs.

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