What is transportation management?
Transportation management is the planning and management of logistics operations to move freight from one location to another while maximizing the use of transportation resources and controlling costs.
Transportation management can include inbound, outbound, internal, and external shipments. Activities focus on ensuring proper materials and products are in the correct place at the desired time and in the right amount.
Why is transportation management important?
Challenges in Transportation Management
Primary challenges in transportation management emerge due to some common problems.
- Poor optimization of processes and resources.
- Limited planning of activities from the first mile through the final mile.
- Low inventory, logistics, transit status, and annual spending visibility.
- Cumbersome freight claims processes.
- Higher return rates for e-commerce purchases.
- Globalization of the supply chain and risks of non-supply chain disruptors, like pandemics.
Transportation Management Companies
Transportation management companies offer services in three key product segments.
- Business services
- Managed services
- System integrators
Third-party Logistics Providers
Within these segments, transportation management services providers operate as third-party logistics providers, or 3PLs, to execute transportation management, distribution, warehousing, fulfillment or other managed or business services. Third-party logistics providers often specialize in certain supply chain operations, scaling and customizing based on a customer’s needs, market conditions, or transportation management disruptions.
Integrated within an organization’s operations, the depth of a 3PL’s managed services can extend broadly. Many cater to specific a la carte business services, such as freight pay and audit, while enterprise 3PL providers provide complete managed transportation execution and supply chain management.
Transportation Management Software Companies
Transportation management systems companies offer technology that helps freight shipping organizations manage overall costs, improve shipment efficiency and provide supply network visibility.
Transportation management systems integrate new technologies, such as blockchain, artificial intelligence, and digital freight matching to enhance their users’ capabilities.
Transportation management software product offerings include options for software as a service (SaaS) or cloud-based functionality.
A SaaS transportation management system operates on subscriptions and is distributed as a service through the internet. In this environment, the transportation management systems (TMS) operate on servers maintained by the vendor, who updates the software periodically.
A cloud-based transportation management system (TMS) allows users to work in real-time to execute transportation activities, connect and collaborate with trading partners, and improve visibility of freight transit. With a cloud TMS, the software is managed and delivered through remote servers. Users pay TMS vendors for functionality and resources within the software.
Data and Transportation Management Solutions
Leveraging data and digital integrations to manage transportation activities often supports improved performance in these areas:
- Managing inbound and outbound freight shipments, reverse logistics, and final mile delivery.
- Automating transportation management in logistics
- Validating package details and loading specifications to protect cargo.
- Tracking shipment status and location in real-time using GPS-enabled sensors.
- Rerouting shipments to avoid adverse weather and potential traffic.
- Monitoring current freight spend for strategy compliance or opportunities and rate negotiations.
- Accessing transportation documentation for service confirmation, financial settlement, and claims management.
- Executing end-to-end freight transportation from initial order to load tendering and successful delivery to financial settlement.
- Measuring carrier performance with scorecard-based tracking for budget and service performance.
- Improving rate negotiations based on carrier performance metrics instead of anecdotal evidence.
How MercuryGate Supports Transportation Management
Holistic, multimodal transportation management supports execution and protects data with information security. Tools included in the platform specifically dedicated to transportation services include:
MercuryGate Claims Management
Freight claims management and reverse logistics are managed in a singular environment that offers universally accepted claims forms and electronic document management.
MercuryGate Final Mile
Intelligent automation powers dynamic transportation re-routing down to the street level and supports communications between drivers and customers when changes occur.
Benefits of the MercuryGate Transportation Management Platform
Transportation Management Benefits for Shippers
- Reduce outbound freight and fuel costs by rating and optimizing each leg of the journey.
- Book, plan, and execute capacity to any part of the world based on the best rate available.
- Optimize the use of advanced pooling strategies to make them a standard part of your process.
Transportation Management Benefits for 3PLs
- Select the best mode, carrier, and route for every shipment.
- Consolidate loads across the customer base for savings that can pass along to clients.
- Reduce time spent on load planning by generating accurate advance calculations taking into account weight, dimensions, densities, packaging, and compatibility restraints.
Transportation Management Benefits for Freight Brokers
- Configure customer profiles that contain default shipping, billing, and delivery locations, as well commodity and item information to quickly execute loads.
- Source capacity internally and externally, match active loads in the system, add stops for a truck in transit and plan backhauls.
- Tender loads to carriers fully vetted for insurance information, hazmat credentials, safety ratings, and other criteria, and monitor and analyze performance.
- Freight rate index supports educated on-the-spot quotes for lanes not contracted and ensures the best rates on lanes that are contracted.
Transportation Management Benefits for Carriers
- Manage driver data and safety records while ensuring drivers and equipment regulatory compliance.
- Know every driver and truck’s status and improve fleet management with instant communication with drivers.
- Automate repetitive tasks and exception management in daily operations to focus time on more strategic activities.