While many shippers and carriers believe the other is living in the clouds with the rates they charge, the reality is the cloud can ensure each receives a fair rate, and so much more. One of the disconnects between shippers and carriers is the way each manages their business, and if one has greater insight, it holds an advantage in rate negotiations.
He who has the best data almost always win in the end, but if that data is locked inside an Excel spreadsheet, it may never see the light of day. To combat this, businesses have been switching to cloud-based management systems. In transportation, that means a cloud-based transportation management system (TMS).
According to a Techaisle survey of small businesses based in five countries – the U.S., United Kingdom, Germany, Italy and Brazil – only 37 percent of small businesses had heard of cloud computing. In the survey, 29 percent had not heard of cloud computing, even though they used a Software-as-a-Service (SaaS) product, so while we may think cloud computing is now standard, it really isn’t.
Simply put, cloud computing is the practice of using a network of remote servers hosted on the internet to store, manage and process data, rather than a local service or personal computer.
Advantages of a cloud-based system
In transportation, many companies use cloud computing solutions, but there are still a number of companies, both shippers and carriers, that do not use a cloud-based TMS, and that is putting them at a disadvantage.
A cloud-based TMS allows a company to do several things, including:
- Automate the routing guide
- Manage by exception
- Manage in real time
- Achieve greater visibility into the ordering process
- Achieve greater visibility into shipments
- Connect processes throughout the supply chain
- Provide greater communication and visibility to end customers
Each of those steps can be time-consuming, if impossible, when using a TMS not connected to the cloud, or even worse, the old-fashioned spreadsheet hosted on a single computer, and costly. The lack of connectivity between systems means multiple people may be working on the same project at the same time, adding layers to the process.
Using a cloud-based solution such as nVision Global’s Impact TMS, gives users the opportunity to connect disparate systems that can improve efficiencies. It’s that integration that is critical in today’s time-sensitive, e-commerce-driven freight environment. Even those shipments that are not e-commerce related are moving faster than ever, and that means decision-makers need accurate information now, not once each department is able to run a report. Systems connected through the cloud can provide that immediacy.
When incorporated into the ordering process, a TMS can quickly identify where capacity is needed and even automatically search through the routing guide to find the proper carrier at the right price and secure that capacity based on exception management practices.
There are other significant benefits that a cloud-based TMS provides. Users can eliminate the need to have different servers in different locations and it allows for the centralization of decision-making, or at least ensures that all decision-makers have the same visibility into key data points. It brings together orders, logistics and even finance departments. If a shipper is so inclined, it can also incorporate the carrier’s key data points, providing further efficiencies.
For organizations that use a TMS that is not cloud-based, they may be handling many of these tasks by hand and it is likely costing them money, and not just in additional infrastructure such as servers. It also prevents organizations from reacting quickly to real-time data because they don’t have it.
Cloud systems have also helped even the playing field. No longer are robust TMS the domain of only large corporations; now they can be used by businesses of nearly any size. Contracting with a third-party provider like nVision Global can save small businesses even more money by leveraging their expertise and resources in developing a solution that meets the business’ needs.
The biggest key when selecting a TMS provider is to ensure that the provider can grow with your needs. How scalable and customizable is the solution? Some systems only provide the basics, while others utilize a configuration where options can be easily added and it can integrate with most any system so proper context and reporting can be generated.
“You have to be able to look and see what is going on, so that is a key element in any TMS,” Brooks Bentz, a longtime transportation consultant, told FreightWaves earlier this year. “Do you have reporting capabilities, and do you have the sophisticated levels needed [to report that information]? Running reports at the end of the quarter to find out that Fleet A ran 10 loads that should have gone to Fleet B and it cost me $10,000 is too late.”