What is Freight Management?
Freight management refers to the entire process of organizing inbound and outbound goods for transport. This process ensures that the right products get to the right places in the right timeframe and at the right price. It does this by coordinating the processes between all parties—carriers, distributors, vendors, and shippers—to prepare, ship, store, and receive freight. The goal is simple; get the cargo to its destination safely, timely, and in the most efficient way possible.
It is also through this system that freight is actively monitored and issues (if any) are resolved accordingly. All in an effort to get the freight to its destination in one piece.
Having said that, it is important to note that in general, freight management is really only a term that is tossed around when talking about full-truckload (FTL), less-than-truckload (LTL), and small parcel shipments. For larger freight that requires placement on a vessel for transport, the whole process is a bit more complex. While those shipments still have some sort of freight management system in place, it goes far beyond the basics. So for the sake of clarity and brevity, we will be discussing the type of freight management that happens with standard-sized freight.
Freight management solutions can be set up completely in-house, but this is growing increasingly rare. In-house logistics are often too expensive and complex. In most cases, shippers opt to partner with a reputable 3PL to overlook their supply chain operations.
What is involved in freight management?
As you may have noticed, freight management is a bit of an obscure term. In fact, it is a rather large umbrella term that covers a number of processes that go into moving goods throughout the supply chain. It’s the management of literally everything from the moment the goods leave the warehouse until they arrive at the customer’s doorstep. Sometimes, management continues even after delivery!
There are so many different bits and pieces that make up the whole of a true freight management system. So, in order to give you an idea of some of the things it encompasses, we’ve put together a small list…
- Route optimization: ensuring the fastest route(s) for transport
- Rate negotiation: finding the right price with the right carrier and services
- Accounting and auditing: tracking and improving the numbers involved in freight forwarding
- Claim management: organizing and handling scenarios (insurance or otherwise) of lost or damaged goods
- Data collection: tracking routes and processes to gather insights about more effective operations
- Tariff and regulation management: ensuring the goods and transportation are compliant with government protocols
- Warehouse distribution: handling organization of packages in warehouses throughout the transport process
- Carrier and vendor management: maintaining relationships with everyone along the supply and transport chain
- Integrations: working with organization departments, transportation management systems (TMS), and enterprise resource planning systems (ERP) to centralize and streamline
What it Looks Like in Action
Now that you have an idea of everything that a freight management system entails, let’s see what it looks like in action. Let’s say that Company A wants to ship 10 packages of goods from California, US to Toronto, Canada. The freight management department or 3PL partner might perform the following tasks:
- Inventory and label packages
- Determine the type of shipment (FTL vs LTL vs parcel)
- Map most efficient route
- Find the right carrier for that route
- Negotiate prices and rates
- Work with necessary warehouse partners along the route
- Resolve necessary regulations
- Track and report analytics of the trip for future improvement
Each of those micro-moments in of itself demands a lot of time, resources, and energy. But, one missing piece or one cut corner could spell disaster for an entire shipment. Luckily, this is why freight management systems exist! These platforms ensure that every piece of the puzzle fits together perfectly.
Why is freight management important?
Freight management is complex. Multiple processes, operations, partners, and technologies need to come together to make transport effective. There are a lot of interconnected aspects going on simultaneously. But when that power is harnessed, it can very easily
Businesses large and small simply don’t have the team or expertise to keep freight management in-house. Trying to handle all of this on your own rarely works. Freight management is an entire study in it of itself, which typically means you want to work with a company that specializes in it. Most businesses find that outsourcing their freight management to a transportation and logistics company reduces costs substantially, improves operational efficiency, and best delivers for their consumers.
That’s our goal here at Redwood Logistics. We don’t just provide you with trucks to get your goods from factory to consumer. We focus on the details to make the overall process a breeze.
Our unique model creates freight management programs custom-built around your business’s individual needs. We don’t have a standard freight system we use for everyone. We believe that customization of the platform, in union with cutting-edge technology, ensures the most streamlined and effective transport chain.
And it’s proven to work! That’s why we have over $1 billion in freight under our management currently and continue to oversee more every month.
See what makes our freight management different with the following resources:
Want to save money and streamline freight shipping for your business? Maybe you just want to learn more about the process? Reach out to Redwood Logistics for a consultation about how we can customize a unique plan for your individual freight management needs.