An effective warehouse management strategy is key to staying competitive and meeting consumers’ expectations in the omnichannel world. Knowing the available inventory and assets only in is inefficient and lacks value, but when applied across an entire supply chain network, inventory visibility propagates . To understand this paradox, warehouse managers need to understand the pitfalls of omnichannel warehouse management and how to develop a winning strategy.
As explained by , many retailers continue to fall short in developing effective warehouse management tactics that benefit omnichannel supply chains. Although the main issue lies in the lack of visibility into assets and inventory in warehouses, distribution centers, and stores, an important part of the problem can also be found in transportation management. After all, inventory in transit is still inventory, and lack of insight and visibility into all inventory and its respective costs, even while being transported, contributes to problems in
Unlocking the secrets to in an omnichannel world is a complex task, but technology can simplify this challenge. It is key to an effective warehouse management strategy and brings disparate systems together. Fortunately, modern warehouse management technologies, including a cloud-based warehouse management system, can be integrated with existing systems faster and easier than in any other time in history, allowing SMBs to stay .
Several of these practices, reports , include:
Aside from gaining visibility into existing systems, warehouse managers must take advantage of all resources to develop an effective warehouse management strategy for an omnichannel supply chain. As explains, companies wanting to experience faster-than-average growth into omnichannel, especially those with zero or limited systems and processes built for managing omnichannel order fulfillment, may need to outsource their warehouse management.
Full truckload shipping is generally less expensive than other over the road transportation modes. Less-than-truckload (LTL) has more stops, touch points, and risk. It takes more time to get shipments to consumers. Remember time is money, and if your product sits in the back of an LTL van for several days, your consumers will flock to your competitors. Instead of throwing in the towel, shippers can leverage full truckload shipping to ship LTL shipments in the back of a full-size van or trailer. How? Well, it goes back to knowing when to put two and two together to make four, with four being full truckload and two being an LTL shipment.
Shippers have been bartered with the topic of LTL shipping for years, including how to make better use of it, reduce freight spend and leverage technology. Unfortunately, the surrounding LTL shipping has resulted in an unusual problem; shippers are turning to LTL-exclusive shipments, which can significantly drive up freight spend. Yet, shippers should consider using a transportation consolidation program, as explained in the previous blog post, to gain better control over freight stand and stay profitable as shipping rates continue to rise.
Access our complete Full Truckload Shipping White Paper Series.
Although LTL rates have remained more expensive than full truckload freight, full truckload rates are on the rise. As explained by the , drive and truckload rates rose 17 to 25 percent in January 2018. In addition, analysis of contract and spot market prices revealed rising rates in medium-range hauls, 450 to 550 miles driven per lane.
Surging demand for full truckload inherently implies a forthcoming greater rate hike on LTL shipments, which are regulated by the National Motor Freight Traffic Association (NMFTA). However, the NMFTA is more likely to raise average rates in response to demand, and according to multiple sources, the capacity crunch stands on the brink of becoming full-fledge transportation crisis more drivers are retiring, and the capacity is simply unavailable. Unfortunately, this is creating the perfect storm for shippers trying to stay competitive and make a profit in shipping.
Consolidation programs, also known as retailers consolidation or multi-customer consolidation, as explained by , is a go-to solution for combining multiple LTL shipments or parcels into full truckloads. In other words, the freight consolidation program volume to existing shipments by combining shipments from a given shipper or multiple shippers to reduce the overall number of miles traveled had the packages been sent via LTL or parcel shipping. This is essentially Intermodal shipping, but it is important to note that freight consolidation is essential to leveraging the full potential of full truckload shipping.
The benefits of freight consolidation have a direct impact on available market capacity. Freight consolidation does more than just combined shipments; it makes shipments more attractive to drivers and carriers. As a result, shippers employing freight consolidation tactics can access available capacity was in full truckload and reduce costs. So, what is freight consolidation really mean for shippers beyond cost savings in shipping?
Take a moment to think about how freight consolidation rewards shippers. Rewards derive from the components integral to an effective freight consolidation program, which include:
The components of a freight consolidation program require systems capable of broad scalability and visibility, such as cloud-based transportation management systems (TMS). Small and mid-sized shippers can leverage the power of TMS, much like the big-box retailers, by working with third-party logistics providers (3PLs) and taking advantage of available software-as-a-service (SaaS) platforms, like the Thomasholmes Rater.
Full truckload shipping rates are not regulated by the NMFTA, explains and as a result, shippers have an opportunity to take advantage of lower than LTL shipping rates through freight consolidation. LTL rates are expected to continue climbing, especially if an infrastructure bill is not passed in the coming months. Therefore, shippers need to begin preparing to use freight consolidation to tap into the value of the full truckload shipping by partnering with a 3PL sooner, not later.
So, what else can a shipper do to procure full truckload in tight capacity? We’ll answer that next.
Shippers face more challenges than ever before when it comes to managing freight spend and allocation. What is going where, and if it is going to location A, what is the best way to send it? While many other questions exist, freight management in today’s world is built on the internet, speed, use of data, and staying attractive to drivers. Yes, your freight must be attractive to drivers to get the best deals, and a TMS provides an invaluable means of creating attractive freight. Of course, its additional benefits, like reduced costs and simplicity in back-office work, help too. Let’s take an in-depth stroll the use of a TMS in managing full truckload freight and how it can make full truckload your new best friend.
As explained by shippers face a problem with ensuring they are paying surcharges but aligned to the volume of freight shipped. Often-overlooked charges, such as accessorial charges, billing charges, and data entry, contribute to increased freight spend and management complexity.
Part of this problem derives from the increased number of types, modes, of freight managed within a single company. Modern shippers rely on a combination of less than truckload, full truckload, air, ocean, and rail modes to move products domestically and internationally. Unfortunately, shippers may be unaware of overspending on full truckload shipments, as well as all other modes, for several reasons, including:
All these indicators of overspending can be solved by implementing a robust TMS.
To take advantage of the true capacity of a TMS, a shipper must understand a few things about existing freight, explains a previous blog post. Shippers need to know the dimensions of their freight, and they should make full use of available technologies that automate the freight quote process. Requesting quotes manually will only serve to annoy drivers and carriers, and shippers are more likely to end up paying higher costs.
Essentially, frequent putting is indicative of shippers constantly shopping around for the lowest cost deal, and since the carrier is less likely to secure the actual transaction and transport such items, carriers will charge more. However, shippers using a TMS can generate quotes within the system, and carriers and drivers are virtually unaware of these transactions. Of course, carriers and drivers will be aware once the freight is scheduled within the system.
In addition, a TMS should not be a terminal-based system. In other words, the TMS deployed should make full use of cloud-computing technologies, reducing upgrading costs associated with implementing such solutions in-house. In fact, a third-party logistics provider (3PL) can help shippers take advantage of cloud-based systems when shippers have (IT). Little experience in information technology
Part of the benefits of using a TMS derived from its ability to combine both web-based bids and constraint-based bids. A TMS is like a procurement expert, allowing for the continuous benchmarking of shipping activities and giving shippers insights into freight spend. As explained by , shippers should seek to increase lead times and be flexible on pickup and delivery windows. To achieve these characteristics, shippers must implement adaptable solutions. Shippers must implement a scalable TMS. Furthermore, according to , cloud-based TMS allow shippers to gain real-time pricing and inventory of full truckload shipments, integrate existing supply chain management systems with an advanced TMS, identify equipment and utilization patterns, and merge shipments through the process of freight consolidation.
Using a TMS for full truckload shipments is about finding cost savings wherever possible, and since the Big-Box retailers are only growing in strength and power, small and mid -sized shippers can leverage the power of a TMS to tap into the valuable resource of full truckload shipping. For shippers who have not previously considered the possibilities of full truckload shipping or whom lack the freight volume necessary for full truckloads, freight consolidation as part of a TMS, explained in the next post, is the answer.
Poor visibility in freight allocation is a leading reason shippers experience difficulty in managing freight, and this problem is evidence of a disconnect between the person managing freight and company stakeholders. As explained by the problem goes much further than that, including lacking compliance management, subpar, if any, use of transportation management systems (TMS, and failure to utilize granular shipment activity data. Goodwill notes shipment data granularity and analysis are linked with better freight allocation, which means making use of the full spectrum of available shipping options, including full truckloads.
To understand the problems behind poor freight allocation, it is important to consider its literal and perceived definitions. Its denotation is the actual freight planning process, as well as planning individual pallets to make best use of available space, explains Space used should always include vertical space, increasing pallet height, which opens up additional capacity in all shipments, as exhibited in a previous blog post. Yet, the problem remains: shippers need to be able to fill an entire truckload.
Access our complete Full Truckload Shipping White Paper Series.
Yesteryear, freight allocation was simpler. Shippers could hold freight at a given location until enough freight was ready for shipment. In the modern era, considering Amazon Prime’s Same-Day and Next-Day delivery options, such freight planning would be counterproductive. Consumers will shop elsewhere, explains , and the same fact holds true for consumers presented with unexpected shipping costs. Specifically, up to 56 percent of consumers will abandon online order purchases if presented with a shipping charge. Unfortunately, shippers see this problem as a reason to build shipping costs directly into price points. Higher prices will also result in consumers jumping ship too.
The only solution lies in taking advantage of the most cost-effective shipping solutions available by gaining an understanding of freight allocation, including both planning and spend.
Actual freight spend includes all necessary components for pickup, cross-docking, transportation, linehaul, consumer pickup, if available, and last-mile delivery. The only portion of the shipping journey that requires smaller LTL shipping is last-mile delivery, not shipments traversing the country or continent.
Shippers should implement processes and systems that generate granular data and actionable insights from analytics. Fortunately, this solution exists within a modern TMS, the Thomasholmes Rater. Seeing your most profitable and costly shipping destinations and origins enables true freight allocations. In other words, you can make the best decision for the consumer, carrier, driver, and the company itself.
Vigilant shippers have an opportunity to use knowledge about destinations and origins to reduce freight spend and improve customer service. Customers see returns in the form of lower price points and potentially free or lower-cost shipping. Shippers realize benefits of freight allocation, asserts , including:
Inbound and outbound freight costs can make up between 10 and 11 percent of revenue for companies with less than $250 million in sales. Meanwhile, Big Box competitors and retail giants see freight spend within 3 percent of total revenue. The difference derives from the ability of companies to leverage technology and information to drive freight spend down, but how? To answer that questions, shippers must look within their operations to identify the biggest-cost shipments and destinations and re-evaluate current freight allocation procedures.
The Big Box retailers have an advantage in using full truckload almost exclusively for shipments, including all omnichannel shipping options. This requires smaller companies, those in the 10- to 11-percent rate to vary shipping options more to make better use of full truckloads.
Obviously, shippers cannot predict the exact amount of product needed in every location, but if shippers could use technology, like a TMS, in conjunction with existing warehouse management technology, like an integrated warehouse management system (WMS), to understand the market better, they could push the boundaries of prediction. Essentially, shippers could learn how to make better predictions, move product throughout their supply chains and realize savings through freight consolidation, even when orders have not yet been completed, which reduces total cost of ownership in transportation.
Up next, we delve deeper into the role of a TMS in managing full truckload shipments from initial order tender through payment, and if necessary, returns management.
General rate increases (GRI) are expected each year in less-than-truckload shipping, but the GRIs for 2018 may easily soar past expectations. Meanwhile, full truckload are also rising, but full truckload rates may be less expensive than continuing to use LTL shipping options. An unplanned shipment, poor shipment attractiveness, and other factors may adversely affect full truckload rates per shipper. As a result, more shippers are looking for ways to take advantage and budget better for full truckload, and shippers that understand the nature of contracted versus spot rates for full truckload are poised to overcome this problem.
Shippers often express concerns and challenges to leveraging full truckload, but how do they budget better for full truckload freight? This problem is not due to just capacity; it derives from inexperience too.
Small and mid-sized shippers may not have the skills necessary to negotiate transportation contracts, including those involving full truckload shipping. If negotiations rely on an understanding of all inbound and outbound freight statistics and processes, lacking information will result in strong variances between rates and trouble securing available capacity.
Access our complete Full Truckload Shipping White Paper Series.
As explained by , this problem grows when applied to international shipping, and shippers may not even be considering total shipping costs. For example, denotes these factors affecting freight rates and spend:
These factors also impact full truckload rates, so avoiding them in contract negotiation is a terrible idea!
Communicating information clearly and concisely is essential to taking control of full truckload variables to avoid struggle in lieu of the capacity crunch. Shippers should provide as much information as possible and complete the order tender process as soon as possible. Although everyone claims full truckload only depends on lane and destination, drivers may take into consideration factors that affect GRIs in other modes. Therefore, informed shippers can take greater control over the process.
Shippers must also understand the typical life of a full truckload shipment. As explained by , a typical process for full truckload includes the order tender, freight scheduling, dispatch, loading, transit, unloading and delivery, and billing. In the digital age, another step may be involved-auditing the invoice and identifying potential instances of overbilling or double billing too. Independent contractors (drivers) also increase risk of such problems, so shippers need to take control over all variables.
This includes working with experienced full truckload and multi-modal freight brokers, such as third-party logistics providers (3PLs). Depending on the 3PL, additional services, like invoice auditing and value-added services may be available. In fact, Thomasholmes offers these services too. Plus, working with a 3PL may open the door to even greater savings and enables control over full truckload freight management.
Imagine letting a 3PL handle the process for full truckload shipping. While decreasing in-house activities to manage full truckload freight, a 3PL may have access to discounted rates as part of a larger contract. A 3PL manages many shipper-client relationships, so the company has enough volume to tap into lower-than-average full truckload rates. This allows shippers to budget better for full truckload shipping.
Shippers seeking to budget better need to consider freight allocation, including identifying the most profitable and costly shipping destinations and origins. The budget changes, so do the factors affect truckload freight rates. However, contracted freight rates, provided an organization can meet demand, as stipulated in a contract, can be locked in. Also, working with a 3PL puts the experience of an entire company at the helm of negotiations, so your company can work on advertising, getting and retaining customers, and manufacturing, not just logistics.
Decisions affecting full truckload shipping will affect adherence or deviation to your freight spend projections and budget. To budget better for full truckload, you need an advocate for your company, a skilled negotiator that will use the knowledge and capacity crunch to get the best deal for full truckload shipping. Moreover, the lowest cost doesn’t necessarily make the best deal, so understanding how the industry responds to changes in volume within transportation hubs and the market is crucial to making informed decisions. Contracted rates are indeed possible in full truckload freight management
Statistics on the industry-wide use of a transportation management system (TMS), like the Thomasholmes Rater, are lacking. The most recent report on adoption rates of TMS is from 2015, with only 35 percent of shippers actively using a TMS, asserts A TMS makes up only a fraction of the full truckload technology available to shippers. In full truckload freight management, technology will make or break plans for keeping freight spend in check. Demand for record-breaking speed of delivery and free shipping are only making the case for greater use of technology in full truckload freight shipping management, and shippers need to understand why.
Full truckload technology is essential to accessing the most carriers, drivers, and available capacity in a tight market. Amazon continues to push its own fleet forward, and the Big Box giants are willing to pay premium prices to get freight to market. Unfortunately, these factors make it difficult to attract drivers for full truckload freight from small and mid-sized shippers. However, technology can change the narrative.
Access our complete Full Truckload Shipping White Paper Series.
As explained by , technologies used to improve full truckload freight shipping management must center on advanced, intuitive technologies. In addition, new legislation is on the horizon, and the electronic logging device (ELD) mandate is about to seriously affect available capacity. The pressure to move freight through any means necessary is on, but pressure to keep costs down continues. This is why technology is the solution. Think about what some of these top technologies can mean for full truckload shipping:
The use of cloud-based systems for logistics management offers many benefits to shippers looking to find the lowest-cost full truckload carriers and avoid steep rate increases. These benefits, , include:
Shippers must understand the role of technology in reducing costs for drivers, even if just reducing the stress associated with full truckload freight management. Thus, shippers should follow these steps.
Logistics technology is evolving, and full truckload technology will continue to get a bigger plate at the logistics dinner table. Shippers should begin the process of migrating systems to the cloud and consider outsourcing full truckload freight management to third-party logistics providers. This is an effective way to take advantage of best-in-class technology without the upfront development costs associated with in-house technologies.
Believe it or not, product in the care of a driver does not necessarily place all liability for freight in the hands of the carrier. There are exemptions to liability within the Carmack Amendment, and even when everything is correct on paper and goes smoothly at the place of origin, Mother Nature may have other plans. Shippers need a way to mitigate risk of full truckload shipping, regardless of what promises a driver makes in casual conversation.
Risk exists in all transportation modes, and failure to consider risk in full truckload shipping is a poor strategy that will result in loses. Some shippers operate under assumption, but assumption will not pay for damages.
As explained by , transportation liability grew more complex with economic growth and an increasing number of contracted drivers and carriers. Under federal transportation law, and the Carmack Amendments, carriers traditionally held liability for freight until delivery, with four specific exclusions, but individual contracts may make liability unclear. Meanwhile, the Amendment and the enforcement leaves shippers and carriers dazed. As a result, shippers may assume carriers retain liability. False assumptions about outside entities also leave carriers under a false sense of protection from damage and liability.
Access our complete Full Truckload Shipping White Paper Series.
Outside entities are just that, outside, and they are focused on their own interests, as well as the interests of their clients. As a result, carrier contracts may carry high deductibles, limitations, or exclusions, even when carrier liability is stipulated in a contract. Therefore, shippers should review existing policy or contract liability and opt for additional cargo insurance to reduce risk, depending on freight fragility.
Upon review of existing policies and strategies to mitigate risk of full truckload shipping, shippers should look at all available options. This includes purchasing freight or cargo insurance.
Cargo insurance literally insures freight against damage or loss, provided such losses are within policy limits. While carriers may offer a certain amount of “given” coverage for full truckload shipments, the independent nature of full truckload opens the floodgates to risk. An overlooked detail could result in losses exceeding $100,000. Remember full truckload requires a full van or trailer, and damage to small items adds up quickly when expanded to 42,000 pounds of merchandise. Thus, shippers should consider purchasing additional cargo insurance when using full truckload.
For example, Thomasholmes Cargo Insurance insures freight from “warehouse to warehouse,” covering transitions between carriers, if applicable. Although most full truckload freight has a single pickup and drop point, on occasion freight may change carriers. Cargo insurance serves to reduce risk associated with such transitions and covers carrier limitations too.
Cargo insurance may seem like an unneeded feature, but imagine how a sudden storm in the Midwest could popup without warning. Tornado Ally is littered with the memories of entire truckloads tossed aside like matchboxes. Even when purchasing cargo insurance, shippers should follow a few tips to help mitigate risk in transit.
Cargo insurance must never be an afterthought. Full truckload freight can represent millions of dollars of product, and the risk, even when it is an unforeseen risk, will always be present. Shippers can mitigate risk of full truckload shipping by purchasing cargo insurance for any and all shipments. The curve ball is coming. If your organization has never lost product, nor purchased cargo insurance, it could be amazing luck. Then again, it could be your turn…
The capacity crunch has arrived, and shippers are scrambling to find ways to make a profit in logistics. The wrong strategy or blend of transportation modes will result in losses, and since consumers only see product costs through Amazonian eyes, increasing product price points and shipping charges is unacceptable. However, the benefits of full truckload shipping can be accessed by approaching logistics from a strategic vantage point, understanding the mode more thoroughly.
Full truckload shipping requires shippers fill an entire van or use a full flatbed trailer. Shipping costs are the same for a given type of shipment in full truckload. According to , full truckload freight shipping may vary by carrier, including those transporting general merchandise or specializing in a type of shipment, like cold storage.
During a shipment, explains , the trailer is filled by a shipper within the carrier’s expectations, including weight and volume. The driver receives all paperwork, including the invoice, bills of lading, customs information, and route instructions. Unfortunately, the volume and weight minimums leave shippers viewing full truckload with distrust or uncertainty, yet it could be used more productively to net huge benefits to shippers.
Access our complete Full Truckload Shipping White Paper Series.
The best way to approach a fear lies in understanding irrational beliefs surrounding such fears, and the same concept holds true in approaching full truckload shipping. Full truckload shipping, depending on destinations or origins and fuel costs helps shippers realize these benefits:
It is also important shippers understand the characteristics of full truckload freight, which can be used to make freight more attractive to carriers as well.
Taking advantage of full truckload requires shippers to know when it is better to use full truckload than other modes. This means understanding freight characteristics that should denote use of full truckload, which include the following:
Full truckload capacity is tight, but a pragmatic solution exists to tap into “unavailable space.” Shippers must be willing to work with more drivers, carriers, and third-parties to ensure they are getting the best rates possible for a given lane and route. In addition, shippers should submit regular requests for proposal to such entities to stay informed of current and competitive rates.
Shippers can push the benefits of full truckload further by making freight more attractive to carriers and drivers. Driver availability plays a major role in determining capacity. Shippers should take steps to brace for tighter truckload capacity, following 2017’s natural and manmade disasters, reports By some estimates, most drivers are not carrier-affiliated; they are independent contractors. Preserving this workforce is critical to reaping cost savings from full truckload, so making the process simpler for drivers could have the effect of guaranteeing future availability.
The benefits of full truckload are significant and can be a source of increased profitability during a capacity crunch. Furthermore, freight consolidation to transform more LTL shipments to full truckload freight is critical. Even though truckload rates are rising, shippers can use full truckload to vary freight shipping options to move more product and lower operating expenses. Of course, working with a third-party logistics provider is another excellent way to tap into the value of full truckload. Since full truckload often involves independent drivers, it is important to understand how to mitigate risk even further.
Every transportation firm sees the utility of having a transportation management plan. It is essential in organizing activities in the transportation industry effectively and efficiently. The challenges that the transportation industry faces are enormous. Challenges such as increasing fuel prices, pressure on volumes and the low-profit margins of the sector are rampant. Government regulation that touches on aspects of volume and carriage is another force that’s in play in the industry. Thus, it becomes inevitable for transport companies to devise a transportation management plan that factors in all these variables. This article will cover some five tips that you can use to write an effective transportation management plan:
The transportation management plan is a document that bears a legal face. It assesses the work activities and further, the work site for any hazards. It assesses the risks that are associated with the work activity and the proposed mitigation measures.
In some circles, it is considered as the traffic and. It further contains all the traffic control diagrams that will be used, including road furniture, traffic flow, etc.
Download White Paper
This document should not be prepared by just anyone. Only those people who have duly completed the advanced traffic management course or its equivalent should write it. He/she should write it after assessing the site and activities beforehand.
This description covers the process by which an ordered product moves from the vendor and gets delivered to your warehouse. An illustration is as follows:
This description covers the movement of an outbound load from the company premises/warehouse to the customer’s destination. This can be written against the backdrop of finance and operations within the company just as a.
Here’s an illustration:
Since every transportation company is concerned with improving their bottom line, it is beneficial for them to integrate technology into their plans. Of recent time, it has become important to integrate real-time information into transport management. With technology, transport companies are able to improve the ideals of transparency, service and employee satisfaction. This has been enhanced by the introduction of mobile communication devices that keep drivers, customers, and the management in touch.
Another opportunity that’s presented by this integration is the centralization of transportation within company divisions. For example, managers can consolidate their shipments across various depots into one load through the creation of synergies between their various divisions. of the transportation industry can claim to have digitized. It is a challenge therefore to the remaining 72% of the transport industry who have not.
Manufacturers have integrated their production and transportation needs to have a more efficient transportation plan. On the other hand, routing is also done with respect the inventory management practices on the customer destinations. This enables the transportation company to only make shipments as soon as items are depleted at the customer’s site.
These are the standard operating procedures that are laid out by the company and other competent authorities in the transportation industry.
Some of them include:
These are guidelines that outline the various hazards that are present in the course of transportation. They could emanate from the workplace, transport infrastructure, site operations, and the performance of roads. Every transport management plan should outline the measures that have been put in place to mitigate or absorb these hazards.
These are the legal provisions that have been enacted in relation to transport management. They are conveyed in acts of the legislative body in a particular jurisdiction. Transport managers should keep up to date with these legislations and oversee their implementation.
A traffic assessment should also be part of the transport management plan. It highlights the following:
Transport management covers many variables. It is a hands-on activity which relies on real-time data. The five tips discussed have highlighted the basic elements that make a transportation management plan. They can be applied to optimize the processes of any transport company that is operating in this the digital age.
Thomasholmes Inc., held a live webinar entitled “5 Parcel Shipping Trends to Optimize Shipping & Reduce Costs” on May 23rd, 2018. Those who were not able to attend can now download a live replay of this highly educational webinar on a very important subject. This webinar is perfect for shippers of all sizes to get educational material covering all things parcel, AKA small package, shipping.
This webinar is perfect for those who ship multiple parcel shipments from multiple locations and are looking to control costs & increase efficiency. In the webinar the Thomasholmes & Pierbridge team will have an active conversation around:
The key takeaways from this webinar are that:
Send this to friend