As little as four years ago, shippers began to realize the problem with inbound freight operations. Prices were increasing, but almost 33 percent of shippers saw relatively no change in overall operations which gave rise to an even bigger problem—shippers were operating without real visibility into inbound logistics, and vendors had been aware of this fact for quite some time. Vendors and suppliers were taking advantage of shippers, resulting in higher inbound freight spent, which currently is approximately 40 percent of all freight spend for the average company. As more companies implemented an inbound freight routing guide, another problem arose. Many vendors and suppliers remain out-of-compliance, resulting in higher inbound freight costs. Fortunately, shippers have wised up to the issue and are leveraging TMS capabilities to ensure suppliers and vendors do not result in added charges.
Many problems continue to impact shippers, and significant challenges exist in managing inbound freight vendor compliance. The average organization will spend one $65 million on transportation and freight management each year, and these companies expect to handle more than 34,000 inbound shipments per month. Unfortunately, this is led to the worsening of the capacity crunch, resulting in higher inbound freight costs. Also, outbound freight costs are rising in tandem, resulting in even less money available for inbound spend. Instead of trying to put out the endless fires, shippers are looking for alternatives to eliminate these challenges, pushing and forcing vendors and suppliers into compliance. Unfortunately, some suppliers and vendors may be lost in the process, but another will always be available.
To eliminate all uncertainty with inbound freight vendor compliance, shippers are leveraging a transportation management system (TMS), which provides real-time visibility into all transportation activities. Moreover, multiple shippers and suppliers using the same system can work together, not against each other, for proactive inbound freight management and for their overarching freight costs. It provides a win-win for both shippers and suppliers alike. Even carriers get in on the action, realizing better planning for load management and much more which will have a resounding effect on customer service levels, which are expanding today.
Deploying a TMS offers real benefits for all parties using, which may include:
Even though the use of a TMS is the best practice to follow, it helps to have a few additional tips to ensure you maximize the return on your investment.
Every moment lost waiting to deploy your TMS represents missed opportunities for savings and even increases in your freight spent. Let go of these added costs by deploying and implementing your TMS now. If you are unsure of which TMS to use, the Cerasis Rater is an excellent way to gain complete control and both inbound and outbound freight.
Stay in control of all shipments, including inbound and vendor freight.
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