Benefits That Come With Transportation Management Services
Many shippers handle all of their own freight management services, from calling in pick-up requests, to auditing and paying their own freight bills. In our last article, we discussed all the LTL Freight Management Solutions that an experienced 3PL can provide your company, at nearly no cost to you. But at the end of the day, how does having a 3PL manage your transportation benefit you and your company?
The stand-out benefit that first piques a shipper’s interest is that, on average, a 3PL can save your company 8-15% on freight rate spend alone. It is very rare that you employ a transportation management provider and not see direct freight savings right off the bat. However, there are so many other benefits that come with a freight logistics provider than just dollar savings.
In this article we will discuss all the benefits that an experienced transportation management provider will bring to your company, giving you more time and fewer headaches.
Supply Chain Efficiency from Top to Bottom
Working with a transportation management company should not only make your shipping processes run more smoothly, but should bring higher efficiency to your overall supply chain, and company.
When you onboard a qualified 3PL, one of their services will be freight audit & payment and consolidated freight invoicing. Both of these services will take mounds of paperwork and labor off of your accounting department’s plate… and that’s not to mention that they will save you money.
Once your transportation is managed properly, securing transportation with less delay, your warehouse can also begin to operate at top efficiency. When you have products coming in reliably, the warehouse can stay on schedule for your customers to receive their products reliably as well.
In addition to warehouse efficiency, confidence in your transportation can help you start making more strategic business decisions and can make just in time (JIT) manufacturing run much more smoothly. When you hold inventory in your warehouse, you have cash tied up (sitting product) that is therefore not driving value.
We all know the struggle of trying to land new customers, it takes a ton of time and effort, which is why keeping your current customers happy is so important. You want them to continue to purchase from you over and over again. Consistently getting late deliveries, having multiple freight claim issues, or incorrectly invoicing are all ways to ensure a customer never purchases from you again.
Increased Staff Productivity
With the assistance of a transportation management company, your employees and management can all become the most efficient versions of themselves.
A transportation management provider will bring with it all types of technology, but most importantly a TMS software that will make managing your shipments a breeze. Your 3PL can also customize your technology so that only the least cost carrier can be chosen, or regulate that they are only choosing the best carriers for specific lanes.
Create Scale as Your Company Grows
As transportation services start to be provided and technology implemented, you will notice many manual processes disappear that used to be tedious tasks for your staff. This is not to say that anyone needs to be fired due to a lack of responsibilities, but it does mean that just because your company continues to grow, doesn’t necessarily mean your headcount needs to grow with it.
Focus on Your Core Business
When you know that your transportation department is running as smoothly and effectively, managers can then focus their attention on the company’s core competencies, increasing profitability.
Data Analytics and Reporting
The more you know about your freight, and shipping trends the more strategic and accurate you can be when forecasting, and analyzing your staff, carriers, and even your 3PL.
Better Decision Making
When you’re not guessing about what you have done in the past, it’s a lot easier to plan where you are headed in the future. When you better understand your activity and are aware of your trends, you can make stronger, more strategic decisions that can drive down costs, increasing your bottom line.
Identify Problem Areas
Personalized data analytics can help you identify problem areas in your supply chain that may need attention. One example is giving a grade to each shipping location, keeping track of mistakes that could be costing you money such as over-length charges or missing accessorials.
Holding Your 3PL Accountable
Your logistics provider should also be relaying data and information about how they are doing. They can show you data comparing year over year how much they are saving you compared to the months/years prior when you were not partnering.
Transportation management services can offer a significant return on investment for your company. Here at Redwood Logistics, we offer an extensive amount of freight services for any type of company. If you are interested in learning more about how Redwood can save you time, money, and headaches, contact us!