Years ago, I named my business “Freight Management” but today it should be called “Data Management” since that seems to be the business in which we find ourselves. Driven by competitors, by our clients, and by our own imagination, the effective collection of information can be invaluable if properly used and directed.
But there are value points in managing information gathered from a strong TMS system that can also provide a solid pre-audit program to double check accuracy of bills before payment. These points include:
- Tracking the duty paid on imported items with an eye to how much then reships to Canada, or falls into other categories, which will allow you to regain much of the duty paid.
- Having visibility of all shipments moving inbound or outbound until delivered. This information can be pushed or retrieved. This assumes that the freight is tendered by the shipper, or by the vendor, via the TMS that picks the approved carrier for the speed and distance of the shipment. The TMS usually notifies the carrier electronically and a bill of lading is prepared for printing for the consignee.
- Out of region freight moving from a warehouse outside the service zone is costly and a good TMS reporting system will identify these types of occurrences. Additionally, it should identify what SKUs are involved and how frequently it happened in the past week or month. All of this adds extra costs to the bottom line.
- Double/triple orders moving the same day to the same customer can be identified and allow steps to be taken in the future to consolidate such orders onto one bill of lading, not two or three. This typically happens when you have many items for sale and a customer such as Walmart will create an order for each one, which then triggers a bill of lading for each. In some cases, they insist on a bill of lading for each PO. A master bill of lading can overcome this need, which includes all the individual bills of lading onto one transaction. Additionally, carriers will even consolidate the orders and then send one bill.
- How often is the shipping staff or the vendor using the wrong carrier for the size, speed and distance of the order? This, too, can be expensive, and it is good to know when this occurs and where the failure is occurring.
- Sometimes freight costs rise, and you may not be sure why. A good TMS should provide a report on all shipments for any period of time with average mileage, average weight, and cost per pound. Maybe freight order size is down, which will tend to raise the cost per pound, or orders are simply farther away than normal.
- Identifying when accessorials (which are logged and summarized) of a given type are spiking. This could mean more home deliveries, more inside deliveries, etc. Counter action can then be taken to mitigate the costs.
- Defend against charge back from the major retailers. This is now a major profit center. Allegations of late arrival, etc. are charged against you. A good TMS provides status and location of all shipments during the move, which will help that defense.
- Develop a report card on all carriers for on-time delivery, claims ratio, or other factors
- You can also chart the cost of fuel month to month, so you can better see the trends and prepare yourself or your customers.
- By receiving a delivery receipt from the carrier, the process for filing claims for loss and damage is made easier and more accurate.
- Finally, a good TMS will provide accurate accrual reports at the end of the month. However, all open orders across all modes must reside in it. The TMS can then calculate the charges you can expect from the carrier even if not billed or received yet.
Freight Management has such a TMS, and additionally the staff to manage it. Data management has become our main business.