So the champagne corks have all popped, the confetti’s swept up and the euphoria of the New Year festivities is behind us. Standing, squinting in the cold, stark daylight with a fresh year stretching out before us, we ask ourselves as transportation industry professionals, “how can our TMS solutions deliver benefits beyond simply managing transportation, unlocking value in other areas of the organization that translate into a strong and lasting advantage over competitors? Here are a pair of strategies savvy transportation pros with the right technology use to drive advantage for their companies beyond generally accepted norms of TMS.
First, we can develop even tighter controls over freight spend. Yes, this is always one of the primary goals of a TMS application. But there are strategies that yield results way beyond the capture of the “low hanging fruit” like increased tendering automation, improved pickup/delivery scheduling and freight rate management. For example, significantly more savings can be wrung out of transportation logistics by overlaying rate benchmarking strategies upon freight rate management in your TMS. The spend visibility TMS solutions delivery through the systematic capture and centralized cataloging of carrier rates by lane affords shippers the ability to engage in rate benchmarking.
By setting rate benchmarks by lane and inputting that information into the routing guide in TMS, automated tendering can be configured to ensure that no loads are tendered to carriers who do not meet (or who exceed) the benchmark rate for the lane in question. This practice ensures all freight rates are compliant with cost controls dictated by management and reins in rogue spend. The cost savings of the freight rate benchmarking process can be significant. Further, repeatedly unaccepted loads in any given lane and flagged for manual intervention are easily identified and can be useful in auditing supplier performance by lane to identify underperforming carriers and either remove them or help them achieve compliance with your rate structures.
Set Tolerances and Allowances in Automated Freight Payment
Similarly, all TMS solutions are designed to harness automation of repetitive processes to improve operational efficiency, driving savings via reducing man hours spent on common processes like freight payment/invoicing. Carry this strategy beyond the “match pay” process supported by many TMS solutions. Configure match payment parameters to allow for the automatic acceptance of invoices that exceed the authorized cost in cases where small variances exist between calculated miles and actual miles or calculated fuel versus actual fuel cost. For example, a shipper may set tolerances to allow for automatic processing of invoices up to 2% (or say $25) above the authorized amount. Using such tolerances effectively screens out minor cost-overages (not worthy of the manual time required to rectify), while bringing significant overruns to the attention of managers.
For incidences of recurring but undefined low-level charges (e.g. Tolls or other low value assessorials) stop level line items can be configured to observe an “allowance”. Allowances permit any invoice containing a charge equal to or less than the configured allowance level to continue to process without intervention. Both these strategies drive competitive advantage through driving operational efficiency.
For more innovative ideas and strategies for juicing the most value from your TMS, reach out to UltraShipTMS for a demo of cutting edge, award-winning TMS solutions.