Transportation Management System Software Can Simplify a Complex Exercise
Good transportation management system software will prove invaluable for both shippers and third party logistics providers. The software will facilitate transportation planning, controlling shipments, payments of freight, and dealing with the carriers and other agents.
In these days of global commerce, merchandise might be sourced from distant places, across international boundaries. This complicates the transportation management process.
You have to keep track of the merchandise in transit, deal with customs formalities, find the best carriers and rates and verify all claims made by overseas service providers, for example. These can become overwhelming tasks when the numbers are large, unless you use software that is tailor made to track and verify transportation related events and documentation.
We look at the kinds of issues typically handled by transportation management systems and how well designed software can help with these issues.
Freight forwarding and customs broking operations are an integral part of international trade. Finding the right carriers becomes more difficult when you are trading with distant suppliers and customers.
Customs brokerage involves a lot of formalities such as declarations in prescribed forms and arranging insurance bonds. Typically, you engage specialist forwarding and brokerage companies to look after these tasks. Transportation management software can automate many of the processes involved and make information exchange easier.
Freight payments involve checking that you are paying only for services that you have actually received. Customers also have to be billed for all the dues that are recoverable from them. This can become a complicated exercise when the merchandise passes international boundaries. Software that can keep track of all services received and rendered, and that verifies claims and bills against these, becomes invaluable in such a case. Doing these things manually is extremely tedious when the number of transportation operations is large.
Keeping track of costs and performance is a key function with the potential to improve bottomlines. Information such as the percentage of transportation costs to sales, performance of different carriers, and the best routes for sending consignments can all lead to better courses of action. Tracking these things manually is typically not cost effective even if practical. Transportation management software can take over these tasks and provide valuable decision support information.
Checking the availability of stocks is often a critical decision support action. Basing these decisions only on the physically available stocks in the warehouse (or materials store) can lead to lost opportunities or wrong decisions. For example, merchandise might have been ordered from abroad and will soon be augmenting the stocks in the warehouse. If this quantity is not considered, you might lose a big sales opportunity. Tracking such in-transit items can again be a tedious exercise unless you are using transportation management software with transportation tracking facilities.
Negotiating transport contracts: Shippers can accumulate shipment transaction details such as destinations, volumes, frequency and seasonal peaks and lows. By communicating such information to a number of carriers and working collaboratively, it will be possible to negotiate optimum bids.
Transportation management system software that includes Web based collaboration tools to facilitate such negotiations will prove invaluable to shippers seeking the best offers from the best carriers (located anywhere).
In addition to lowering costs across the transportation network, such a collaborative exercise can improve communication and interactions with carriers, which can in turn lead to improved transportation service.
Good transportation management system software can indeed produce demonstrable benefits and pay itself back almost in no time.