The logistics industry sways to meet demand and adjust to fluctuations. Such fluctuations range from weather to limited capacity, and shippers need to keep the influences in mind when tendering freight and planning routes or loads. Freight exception management describes when things change and affect expected shipment arrival or transportation. Fortunately, a modern transportation management system (TMS) can enable better exception management. To keep spending under control, shippers need to understand the challenges in managing exceptions, how a TMS enables better management, and a few tips to optimize the process.
Freight exception management comes with multiple challenges, including:
Prioritized exception management can improve operational efficiency. Exception management means knowing how to respond when to respond, and the best way to respond, to eliminate the risk of disruption, and handle adverse events. Even changes within capacity can require exception management, rerouting shipments, and redefining the loads accordingly — moreover, the issue of capacity weighs largely on the minds of today shippers.
As reiterated by William B. Cassidy of the Journal of Commerce:
“The DAT and Coyote forecasts resemble the IHS Markit producer price index (PPI) forecast for long-distance truckload pricing, which shows rates rising back into positive year-over-year territory in the first half of 2020, with the PPI rising 3.2 percent year over year in the second quarter. That may not equate to a 3.2 percent increase in rates, but indicates direction.
Capacity will be critical to how fast or high truckload rates rise. The US truckload market was awash with capacity throughout most of 2019, as economic growth slowed and a slew of new trucks ordered in 2018 arrived in motor carrier yards. Coyote believes that capacity is under-utilized, especially in secondary markets, and some is leaving the market.”
As capacity changes, more exceptions may occur. Customer demand is only increasing, and carriers will be forced to rethink their current capacity strategies. Thus, shippers will respond, taking advantage of available capacity and ensuring tendered freight aligns with freight delivered and billed. In a sense, exception management also plays a role in keeping costs under control through data-based accounting and documentation processes.
Shippers that wish to improve exception management should follow these best practices:
Exception management represents the latest way automation may help shippers understand operations and deliver on increasing customer expectations. Since handling exceptions the “old” way results in high labor costs and risk for error, all shippers need to rethink their freight exception management processes and apply these tips to achieve success. Of course, using a modern TMS for exception management will also increase value and offer new functions that further refine shipping management.
To subscribe to our blog, enter your email address below and stay on top of things. We'll email you with a confirmation of your subscription.
Send this to friend