How Digitalization of Logistics can Reduce Freight Costs
Logistics Managers or Supply Chain Heads have tons on their plates like managing daily operations, handling delivery issues, and keeping an in-depth watch on the freight cost. Technology has enabled better control in managing costs, and various solutions are available to stay on a depth eye on the availability chain network, including an automatic transportation management system (TMS). Keeping tabs on freight costs is that the key to lowering shipment costs and a functional and unified digital logistics platform can make it all close.
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Hidden Costs in Logistics and Transportation may be a Puzzle and here is the way to Solve It
Supply chain managers got to focus their attention on hidden
costs. To try to this, got to |they have to"> they need to first accept
that logistics functions need to be digitally transformed and automatic. In
other words, organizations got to begin the journey of implementing a
transportation management system or TMS, if they haven’t already.
A TMS is often critical
for several shipping and truckload management organizations, including:
• Manufacturers that handle large bulk orders.
• Brick-and-mortar and e-commerce businesses.
• Retail businesses that require accurate shipping data.
• Distributors who oversee shipping and handling of loads.
• Supply chain management professionals need visibility and
connectivity.
• Companies that provide logistics services
Understanding freight costs and the way they will impact
profit margin is an important part of logistics management. Digitally
automating the logistics processes can help optimize freight spend and lower
fees and expenses, reduce hidden costs and excessive fees, and substantially
augment the customer experience.
Three Business Use Cases of Commonly Overlooked Hidden Freight Costs
Within the standard logistics network, three commonly
overlooked expenses can quickly add up. When freight spends areas get out of
control, they will quickly derail the foremost potent supply chain and fret
your profits.
Stay on top of your game – Beat the demand-supply problem
The early bird catches the worm – this is often the tough
reality within the freight market also. Once the freight market becomes active
and you post your requirement don’t forget that there are N-number of suppliers
doing an equivalent (demand is high) whereas the availability i.e. the trucks
available is restricted.
The longer that's wasted in getting the bid, collating the
costs, comparing the costs, and negotiating bear in mind there's another
supplier out there who has made the choice, and truck(s) has been allotted.
This suggests the availability is decreasing. There’s a good chance that prices
will go up – your freight cost increases.
Now, what's the Solution?
Digitize this process. One platform where the bidding takes
place, real-time ranking of transporters’ price, reverse auction, and in
particular transparency. No more struggles of finding the emails from different
transporters, no time wasted on haggling – close the transaction early, get the
simplest price, reduce your freight cost – catch the worm.
Transparency with e-auction
Not sure if you've got the simplest quote for your freight?
Don’t worry – with the help of technology and data, these
problems are often solved easily. With a transport management system (TMS) in
situ – a forum is made where real-time quotes from our transporters are
collated for you.
With this transparency established between the transporters
and suppliers, it creates a culture of reverse auction where the quoted prices
are visible to all or any thus ensuring a good price. Choosing the simplest
price for you'll not be a hassle – no need for multiple calls to different
transporters, no discrepancies across multiple excel sheets.
It doesn't end there, it's important to stay a track of all
the info points and analyze the trends in your freight cost – the typical
freight cost incurred, spot bottlenecks, track transporter performance, etc.
therefore the next time you attend the freight market you're empowered with the
proper insights which will aid in quicker and a fairer deciding.
But make certain to the proper technology partners –
real-time data tracking, transparency, and insightful dashboards should be your
arsenal to scale back freight costs. Take a fast check out a real-time case
study of a number one construction conglomerate – how the proper transport
management system (TMS) can reduce process time and end in a 2% savings in
freight costs.
Lack of real-time information + lack of communication = surge in
detention charges
With an automatic TMS, you'll have access to real-time data
about your shipment, you'll make proactive decisions – it pays to remain
organized.
For instance:
·
Documentation
and verification at the bay can fret your unloading time. Digitizing this
process will ensure this verification is completed earlier and therefore the
shipment needn't wait once it arrives at the bay.
·
Having
real-time data about your shipment movement will assist you to understand the
precise time and date at which it'll reach the bay. This information gives you
adequate time to work out your bays’ loading capacity and make a contingency
plan just in case of any issues.
·
Inform
everyone involved: because the logistics supply chain interlinks many
processes, it's an honest idea to stay everyone informed of a few shipments’
whereabouts. With real-time tracking information in situ, it's easy to disseminate
the knowledge to the acceptable channels. That would include your folks
responsible at the unloading point, vendors, and even your end customers.
Having the proper information can empower the decision-makers
to require appropriate recourse thus avoiding a surge in detention charges.
Data + technology is power
Insights into trends, access to reports that offer you
visibility into detention charges, lead-time, bay capacity, freight costs, etc.
is critical in saving money. Logistics and transportation systems need
high-precision collaboration and planning. Even with the utmost degree of
designing, there's always the probability of unforeseen circumstances that
would cause increased freight costs.
But empowered with an automatic transport management system
(TMS) where your end-end logistics process is digitized – causes you to and
every one of the stakeholders within the process aware about critical
information which will help them plan, execute, make data-backed informed
decisions, and eventually cut costs.
Don’t dismiss the above-mentioned situations; don’t create a
blanket acceptance of “business as usual” rules and processes – between
internal departments, and between the shipper and therefore the transporter.
Take charge today, use intelligent technology and data to
challenge the established order. Examine your freight costs and question every
built-in assumption, and watch the savings and therefore the appreciation, roll
in.
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