The road to freight management Hell is laden with poor freight visibility and outdated systems. Failures within freight data visibility contribute to compounding consequences throughout downstream supply chain operations, and the problem only grows worse from there. Yet, many continue to operate with blind ignorance of the real problem—limited visibility. According to Dan Cicerchi via Transport Topics:
“A recent benchmark study by ‘American Shipper’ called ‘A Clear View of Supply Chain’ asked supply chain decision-makers which transportation and logistics challenges are most critical to their enterprises. Underscoring the rising importance of freight visibility, nearly three-fourths of respondents cited visibility, coming in second only to cost reduction.
In 2018 and beyond, those that prioritize freight visibility will have a competitive advantage over those that do not.”
To truly improve supply chain efficiency and productivity, shippers need to understand why end-to-end freight data visibility is the only way to escape freight management hell, including the causes of poor freight data visibility, the problems that go wrong with freight management without appropriate visibility, and a few best practices for finally getting back on the right road.
The Importance of Freight Accounting Management to Reduce Costs
The Causes of Poor Freight Data Visibility
The causes of poor freight data visibility are relatively simple. Poor freight data visibility is the culmination of the following:
- Outdated systems that were designed for local supply chains. Outdated systems are a common problem in the modern supply chain. Shippers have grown complacent and willing to bend their current systems to meet any objective. Unfortunately, outdated systems were designed when supply chains were relatively linear, reflecting a finite process of the manufacturer to a reseller and to the consumer. In today’s world, e-commerce and omnichannel have changed the game. It is not enough to simply manage the supply chain from origin through destination, but now it must include movements between channels, management of countless resources, and the unrelenting need to constantly reduce costs.
- Too many vendors that all want to use their own systems. Another cause of poor freight data visibility derives from vendor systems. Every vendor will want to use their own systems. That much is clear. Unfortunately, the use of multiple vendor systems only increases the complexity of supply chain management and results in limited visibility. Think about it; if you cannot understand the data within your vendor systems, you are missing something.
- Carriers who rely on what you have, not the other way around. Carriers play a role in poor data visibility as well. Carriers must rely on whatever you have, not the other way around. Carriers use your data to improve, but your access to carrier data is limited by your own system limitations. It is redundant, but it is true.
- Refusal to comply with the inbound freight routing guide. Inbound freight vendors also impact freight data visibility. When inbound vendors refuse to comply with the inbound freight routing guide, problems will arise.
- Blind ignorance of the problems of current operations. Lastly, blind ignorance to the problems of your current operation will further limit your use and application of freight data visibility. Yes, you must understand that maintaining the status quote means missing opportunities.
What Can Go Wrong With Freight Management
Take a moment to think about the compounding effects of poor freight visibility. Without visibility, the supply chain effectively self-operates, and without advanced systems, that will only lead to disaster. Problems that arise with freight management without visibility include:
- Inbound freight arrives late, missing or damaged.
- Outbound order delays lead to upset customers.
- Downstream supply chains cannot fulfill orders.
- Total freight spends increases.
- Benefits of consolidated freight go out the window in trying to locate and manage deconsolidation.
- Carrier invoicing/accounting practices, which include high error rates, continue, resulting in paying more than what you actually ship!
- Compliance with your inbound freight routing guide is as good as dead.
- Amazon once again proves to be the better, faster shipper and kicks your company into bankruptcy.
How to Get off the Road to Freight Management Hell
It is a tough track to get off the road freight management Hell, but shippers can start by following these 11 best practices:
- Be realistic with the problem.
- Recognize the limits of outdated systems.
- Identify carriers’ and other supply chain partner’s problems with visibility.
- Connect your assets with IoT-enabled devices.
- Integrate your TMS with all systems.
- Evolve beyond a forced OMS or WES that barely scratches the surface of transportation management.
- Get suppliers on board with a similar, if not identical, TMS.
- Gain real-time visibility in all supplier activities.
- Focus on the first step through the last mile.
- Diversify your carriers and LSPs.
- Automate and apply big data analytics to understand and respond to issues/opportunities.
Next Steps: Put the Cerasis Rater to Work
It is not all roses and candy when trying to establish your company as a leader in the supply chain, and the problems will always find a way to return. However, those that take advantage of a newer alternative—a viable solution like the Cerasis Rater—can finally escape freight management hell. So, what are you waiting for? Ask for a demo of the Cerasis Rater TMS today.