Shippers of choice all have one thing in common: They put the truck driver first. They accomplish this in different ways, but the theme of finding ways to make life easier for the driver prevails. Whether that is less detention time, quicker payments, improved route optimization or driver amenities at shipping facilities, drivers appreciate working with shippers that take their concerns – and time – seriously.
For shippers, some of these initiatives are simply an investment decision such as making bathrooms available to drivers or building a drivers lounge. Others can be accomplished with software such as improved route optimization and less detention.
A transportation management system (TMS) is one solution that, when leveraged properly and working with the right provider, can help with that latter effort. There are a number of ways a TMS assists in these areas. Here are seven:
1. Better network alignment
Shipper of choice status starts with ensuring your network is properly aligned. That includes building routes that are efficient and designed to assist carriers in maximizing their assets. Doing so will allow carriers to offer more competitive rates. John Reese, director of logistics and transportation for Truco Enterprises, in a shipper of choice panel at the Mid-America Trucking Show (MATS) in March, said his company tries to limit “awkward mileage” and keep lengths of haul to 350 miles. nVision Global’s Impact TMS is an example of a TMS that allows shippers to optimize their networks and shipments, utilizing the customers’ business rules and exception reporting. Made possible by its data collection processes, the Impact TMS offers key performance indicator reports and financial analysis to ensure routes and lanes are as efficient as possible.
2. Flexible and accurate appointment scheduling/limiting detention
Truck drivers appreciate arriving at a facility at a time when the facility is able to load or unload the trailer. This limits detention time, a major pain point for drivers and carriers. Every hour a truck sits idle adds costs to the shipper and lost revenue to the carrier. According to the U.S. Department of Transportation (DOT), detention costs truck drivers between $1.1 billion and $1.3 billion in pay annually – as much as $1,534 per driver per year. Carrier income is cut between $250 million and $302 million annually, DOT said, and crash risk increases 6.2% for every 15 minutes after a two-hour window.
The result is increased costs for shippers, either in detention pay or through higher rates, as carriers seek to recoup revenue lost as trucks sit in detention. The answer is leveraging a TMS to improve operations. Data is now available to help shippers improve operations, more efficiently manage dock time and more accurately schedule pickup and delivery times. Solutions like nVision Global’s offer deep analytics that can help identify bottlenecks at the dock and warehouse and maximize asset utilization through more efficient loading procedures such as preloading trailers, allowing shippers to streamline these operations and reduce costs.
3. Optimized routing
Getting drivers in and out of facilities quicker is just one part of the shipper of choice process. Getting them to their next appointments on time is also important, and that means optimized routing so carriers can maximize revenue opportunities for their assets. An advanced TMS will offer the creation of routing guides and automated rating, routing and booking of shipments. All of these features increase efficiencies in the booking process. When combined with generating the best route available, this can cut hours out of a carrier’s time. The result is the carrier’s costs go down, which can lead to more competitive rates and preferred service. Carriers want to work with shippers that work with them.
“We like working with people who work with us,” Karen Stetner, senior supply chain manager for Garick, a Midwest mulch shipper, said at the MATS panel, noting the importance of communication in this process.
4. Visibility into shipments
One of the greatest benefits of any TMS, including the Impact TMS, is the visibility it provides. Data is a great equalizer in the supply chain, and the ability to know where shipments are, when they will arrive and in what condition improves overall efficiency for all participants. Remember, efficiency at the dock isn’t just a shipper issue, it is also a customer issue. The ability to accurately pinpoint delivery schedules at end customers directly impacts a carrier’s and driver’s efficiency and revenue. There is no benefit to getting a driver out of the shipper’s location in under two hours if that means he will sit at the receiver’s location for six.
Visibility throughout the route will help ensure the receiver is prepared to accept that shipment on time. nVision Globa’s Impact TMS also goes a step further, allowing the integration and input of customer/product detail fields. Tracking customer data identifies those that constantly delay drivers, don’t pay on time or whose actions lead to increased costs.
5. Data insight into contracts
Extrapolating that data accumulated on individual customers and especially carriers gives the shipper the power to effect change for the better. Tracking carrier performance will identify those carriers that constantly underperform service expectations, charge higher rates or continually deliver late. Shippers are then able to move those carriers up or down the routing guide as necessary, rewarding those carriers that consistently outperform with more freight.
The same holds true for customers. Those that underperform, constantly hold up drivers or continually delay payment may be charged more for products or pay more for shipping as carriers request higher rates for hauling into those customers due to detention time or issues that will otherwise tie up equipment and drivers.
6. Pay drivers/companies faster
Perhaps no benefit is more valuable to trucking companies and drivers than being paid quickly. This is especially true if a shipper works with small trucking companies or owner-operators, many of whom may not have the financial resources to wait three months for payment for their services.
A TMS like the Impact TMS integrates with enterprise resource planning or order management systems and with end customer and carrier systems. The result is a streamlined process for paperwork. Electronic bills of lading and other documents can be easily transferred between parties. Automating this process leads to time savings and alleviates administrative burdens for office and other transportation management staff.
The end result is the ability to process payments quicker and more accurately. Ensuring drivers and carriers are paid on time goes a long way to improving overall relations, which will pay off in terms of retention of carriers and possibly lower rates.
“How can we be a good partner with trucking companies to work with?” Stetner asked at MATS. Finding the answer to that leads to better service, she said. “We’ve had truck drivers working for us year after year, even though we are a seasonable [business].”
Eliminating detention time is the most common approach when a shipper considers how to be a shipper of choice, but it is just one part of the process. A TMS is a valuable tool that can provide important data, tracking and analysis capabilities to help shippers streamline their entire operations, all of which feeds into being a shipper of choice.