The trucking industry fluctuates to accommodate changes in demand, customers rotations, available capacity, and much more. Meanwhile, changes within politics and environmental regulations, including the US-China trade tariffs, also influence the industry. For shippers to remain successful and competitive, they must understand the key freight management factors to consider, ranging from those affecting risk management through improved logistics management.
The supply chain is inherent with risk. Shifting capacity, changing regulations, and other risks influence freight rates and therefore freight spend. However, freight spend is subject to countless influencers, and shippers operating traditional, unprotected, and manual-intensive processes will see an increase in freight spend. As a result, it is imperative for shippers to take these factors into consideration when assessing supply chain risk and freight rates.
A comprehensive approach to managing freight management factors means shippers take the time to consider all possible influencers and assess the best route, mode, raging, and classification for each shipment. As explained by Multichannel Merchant:
“Businesses are always analyzing their operations and seeking to streamline them, work more efficiently and reduce costs. But when it comes to shipping expenses, many assume they are fixed costs that cannot be changed. They maintain the status quo and lose out on potential savings.
Actually, there are many innovative ways to reduce freight costs that are rarely explored. Several of them are as simple as conducting freight pickups during off-peak hours or days of the week.
Implementing these practices is a smart choice that can reduce freight costs by as much as 50%. However, it takes a keen eye to examine your freight practices and challenge assumptions.”
For reference, the balance of appropriate carriers and even consolidated versus parcel will influence freight rates and improve freight spend.
The TMS is likely the biggest freight management factor to influence your organization. So, instead of applying tips to improve overarching freight management, take these considerations in choosing and using your TMS wisely.
As global organizations look to digital transformation to change the foundations of how they operate, global supply chains will leverage more data and technology to streamline operational efficiency. Shippers that wish to reduce freight spend and improve customer service levels need to look to these newer systems, such as the Cerasis Rater, to gain a competitive advantage and build an appropriate mix of solutions and freight shipping options. As a given the right freight management factors into consideration, it is possible to keep freight spend under control and achieve significant benefits simultaneously.
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