Five Reasons Shippers Should Add TMS Instead of Headcount

Volume is up, capacity is down and there’s a ton of work to be done.  So it’s not surprising that hiring is on the minds of transportation leaders.  Seventy-six percent of transportation industry professionals polled in a 2018 employment survey said they planned to add headcount to their workforce associated with transportation logistics.  We’d urge you to think twice about hiring. Here are five reasons why you’d be better off engaging a new TMS instead of new workers.

Automation Accomplishes Much More with Less
Most transportation departments report they’re able to dramatically reduce the man-hours dedicated to manual processing of transportation tasks like carrier management, rating, routing, tendering, scheduling, claims, settlement and more.  While others are adding to labor expenses, you could be reducing yours (or at least accomplishing much more without adding bodies).

Better Fleet Utilization Reduces the Need for More Drivers
If you leverage private or dedicated fleets, you’re probably hurting for drivers like everyone else.  Using a robust fleet management tool as part of your TMS improves the efficient utilization of driver hours through improved scheduling, shipment planning, backhaul management and more.  You may still need to hire drivers, but not nearly as many as you’d think.

Attract and Retain the Next Generation of Supply Chain Management Pros
Everyone knows the old guard of transportation logistics is aging out.  Younger generations aren’t attracted to the field as much, due to the perception that transportation is low-tech and stodgy.  Forward-thinking shippers with a mind towards deploying a 21st Century, digitized, automated supply chain management approach are far more successful in recruiting and retaining young professionals who are eager to use leading SaaS technology.

TMS is Value Driver Whereas Labor is a Cost Center
For the approximate costs of the loaded salary (including taxes and benefits) of a logistics manager, a shipping organization can implement a top flight TMS solution which can drive savings on transportation spend anywhere from 2% to 12% per year.  So while labor spending is a sunken cost, TMS actually drives significant bottom line savings that far outweigh the costs of TMS ownership.

Logistics IT Solutions are Evergreen – Labor Isn’t
TMS really shines during lean times.  Today’s high volume and capacity constraints won’t last forever.  When the downside of the economic cycle arrives, the TMS really proves its value, ensuring the most efficient utilization of transportation resources as organizations tighten their belts in all functional areas.  In contrast, excess labor is a drag on profitability in bad economy and incurs ongoing costs such as unemployment claims when excess staff is laid off.

It may be cliché, but TMS solutions help shippers work smarter, not harder and they not only save money, but they prevent unnecessary spending on workforce assets.  Now’s the time to implement while the economy is still favorable.


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