Prioritized Exception Management Increases Efficiency

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. 

Tips to Enhance Exception Management

Shippers that wish to improve exception management should follow these best practices:

1. Take advantage of artificial intelligence to automatically handle recurring exceptions.
2. Create real sets to define what actions to take when an issue arises.
3. Choose a TMS that enables automated exception management.
4. Leverage data on exceptions to understand why they occur, how to prevent them from recurring, and what steps are necessary to ensure continued success and reduction in freight spend.
5. Use machine learning to increase the level of automation in exception management further.
6. Remember to handle the unusual exceptions with grace and dignity, relying on all the facts to make an informed decision and reduce delays.
7. Integrate all shipping systems within an overarching TMS to ensure data is timely, accurate and reflects the needs of your supply chain.