Freight Savings Starts and Ends with Visibility!

Written by Mike Osborne on . Posted in Third Party Logistics

Companies looking to increase shipping efficiencies may turn to a transportation management or third party logistics (3PL) company for guidance. These logistics firms strive to help refine a company’s processes in order to optimize efficiencies and reduce costs, objectives achieved by addressing the following areas of operations:

Visibility

A key benefit provided by a transportation management company is to initiate detailed visibility into the shipper’s freight profile to gain a better understanding of how it relates to freight costs. Many companies budget for shipping in a general sense, but lack the time, abilities or tools to formulate a strategy and execute it. Specifically, they lack the tools to generate savings opportunities and track how savings are achieved. The best transportation management companies and third party logistics providers have the tools and experience to provide transportation-specific visibility with robust reporting capabilities.

Service Providers

3PL’s use their networks to partner their clients with the best carriers available. Reliable carriers with good performance records, cutting edge capabilities, and competitive rates are integral to any shipping strategy, as are other service providers including customs agents and drayage companies. Utilizing strategic on-boarding policies and procedures is key to maintaining the right mix of service providers – ready to go at a moment’s notice. Having the ability to easily monitor their safety ratings, insurance and authority is critical to company’s controls in today’s environment.

Contract Negotiation

Shippers often pay more than they need to because they lack the industry expertise around contract benchmarks to influence negotiations. Anyone can go online and price match to get the best available rate, but experienced 3PL’s are practiced in getting rates that best match the shipper’s specific freight and lane profiles. Having shipment level detail history with key freight trends and carrier performance is critical to your ability to negotiate the best contracts for your company.

Mode Selection

Another common reason companies spend too much money on freight is due to lack of knowledge and visibility to options regarding all the available  transportation modes. Whether the optimal way to move freight is full truckload (FTL), partial truckload (PTL), less than truckload (LTL), or parcel, will depend on a number of factors specific to each situation. Leading 3PL’s and transportation management companies provide the necessary tools and insight to help shippers identify the best mode in any circumstance.

Shipment Monitoring

Reputable 3PL’s and transportation management companies are able to monitor shipments, or provide companies with software to monitor their own shipments. Proactive Shipment Monitoring is one of the best ways to reduce in transit inefficiencies by immediately identifying problems and initiating the necessary steps to reduce the impact on the overall shipping process. The longer the transit times or the “hotter” the move, the more important having a proactive monitoring system becomes.

Transportation management companies work with clients to highlight the gap between current capabilities and best in class  transportation processes. Their insight can help to develop a roadmap  for how sustainable improvements can be made. The ability to impact process improvement, thus savings, is what separates freight brokers from the true transportation management specialists.  Use a quality-driven transportation management company to ensure your shipping processes are continually optimized and maximize savings opportunities.