MTS Can Make Transportation an Asset
Outsourcing management of a company’s transportation operations is a big step, but it’s also one that can deliver big benefits, transforming transportation into an asset. This month’s blog discusses the three top benefits of sourcing the transportation function to a Managed Transportation Services 3PL, which is responsible for planning, executing, and monitoring shipments across different modes of transportation, such as road, rail, air, and sea.
Transportation plays a critical role in the supply chain process of any business, and it is becoming increasingly complex to manage. With globalization, companies are dealing with a larger network of suppliers, distributors, and retailers. This complexity often results in inefficiencies, increased costs and risks that lead to limited visibility, making it challenging to identify and respond to supply chain issues promptly. Sourcing to a Managing Transportation Service 3PL can take advantage of the 3PLs vast array of resources and relationships while improving supply chain visibility and control, which ultimately leads to better decision-making, more cost-effective transportation, and improved customer service. In short, MTS can make your transportation an asset.
1. Costs Savings
Managed Transportation Providers, like Wavepoint, are equipped with the knowledge, expertise, and technology to deliver customized solutions that can reduce your transportation spend. A survey by Inbound Logistics found that 60% of respondents who used Managed Transportation Services reported a reduction in transportation costs. Savings are driven by a number of functions:
- Carrier optimization by negotiating better rates based on the volumes and lanes, and by consolidating shipments.
- Mode optimization, building truckloads or using rail when more cost-effective.
- Route optimization by identifying the most direct or cost-effective route, continuous moves and filling backhauls.
- Reduced administrative costs associated with load building, tendering, negotiation, auditing and payment.
- Improved inventory management through real-time tracking and inventory management tools.
2. Access to TMS Technology
Roughly one-third of shippers still do not have the TMS required for efficient planning, optimization, and the all-important visibility. Here we have one of the main benefits of outsourcing to Managed Transportation Service provider: access to real-time visibility and control over their supply chain performance. With the help of technology such as transportation management systems, businesses can track shipments, monitor inventory levels, and analyze supply chain data to identify areas for improvement. This technology provides real-time data for full transparency at all levels of the supply chain, from shippers to the consignee.
- Real-time tracking of shipment location, delivery status, and estimated delivery times, allowing customers to plan and adjust their operations as needed, helping them avoid potential issues such as missed deliveries.
- Proactive communication with customers regarding potential issues or delays.
- Customized reporting on shipping activity, including shipment volumes, transit times, and carrier performance.
- Exception management of issues such as late deliveries or damaged shipments.
- Compliance management of regulatory requirements, such as hazardous materials shipping regulations, food safety, or customs requirements.
3. Customer Service
Finally, a managed transportation provider alleviates the shipper’s daily burden, allowing it to focus its resources on its core competencies, ultimately increasing efficiency and profitability. Transportation planners can free up their time to focus on more strategic initiatives, such as improving customer service or developing new shipping strategies.
Customer service staff can more accurately and proactively communicate with customers who request updates on the status of shipments. Shippers also gain the ability to call on the managed services provider to quickly adjust to changes in demand or supply chain disruptions, responding to their customers’ needs in a timely manner.
In conclusion, incorporating MTS into your supply chain is a better strategy that can make your transportation an asset, while at the same time reducing costs. With access to sophisticated transportation management technology, businesses can gain real-time visibility into their supply chain performance, monitor inventory levels, and track shipments, among other benefits. This increased visibility leads to more effective decision-making, improved customer service, and a significant reduction in transportation costs. Additionally, outsourcing transportation services to a managed transportation provider can help businesses focus on their core competencies, leading to increased efficiency and profitability.