In this video, we discuss how transportation management system platforms can give transportation and logistics users greater visibility of important daily activities to reduce business risks. Visibility can go beyond simple track-and-trace functions to help managers with strategic decisions and be used with new tools to optimize load planning efficiency and accuracy. TMS platforms with artificial intelligence (AI) now have all the resources that shippers and their carriers need to work smarter and faster. Read the full Q&A transcription below.
Q: Transportation management is just not about moving loads but also reducing risk, such as fees when shipments do not meet customers’ “on time in full” requirements. What are some examples of how technology—specifically TMS platforms—can give transportation and logistics users visibility of risks they should be accounting for in their daily activities?
A: The first example that comes to mind is simple track and trace. Basically, answering the simple question, “Where is my freight?” So, at any given time, users of the transportation management system should be able to understand where their loads are, and what the estimated time of arrival is for those loads to make sure that those loads are going to arrive on time and be alerted when they’re not. One key capability is track and trace and full visibility. Another key capability is the ability to properly calculate the estimated time of arrival. By using machine learning, our transportation management platform gives customers the ability to get very precise updates as to the time that their freight is going to arrive. And of course, reducing risk also involves optimization of resources. Making sure that I’m getting the most out of my resources, and that my individual drivers and their equipment are in the place where they need to be when they need to be there.
Q: Events of the past year elevated the role of transportation and logistics managers, considering the vital role they played in helping to reduce the risks of stock outs and dealing with supply chain disruptions. What are some things shippers should be assessing now to make strategic decisions to reduce risks that will pay dividends for the rest of the year? How can TMS technology help?
A: You say that the role of a supply chain manager has been elevated and that’s probably true in the last year, but those roles have been critically important to running international business for many, many years. It’s gotten much more visibility in recent times because of some of the supply chain challenges that you’ve seen. But the reality is, it is as important today that we deliver a transportation management system to our shippers that gives them the ability to get full visibility as to where their freight is, and gives them the ability to understand not just where their freight is, but where it’s going to be. When I go and I determine how I’m going to ship orders from a warehouse and the trucks that I’m going to put them on to ensure that those trucks are loaded properly. Transportation Management Systems have to help our customers make sure that those loads are loaded properly because every time that there’s an error or a mistake, that creates a problem with the delivery of freight. It’s also important that shippers have a clear understanding of the inbound freight as well. If I’m in a manufacturing warehouse, I need the ability to understand where my freight is. If it’s coming in containers across the ocean, and when they are going to arrive in my warehouse so that I have those goods and can redistribute those goods across my transportation network.
Q: Freight rates hit record levels last year and continue to challenge transportation budgets. To mitigate cost risks, what tools can shippers use to analyze and, in some cases, optimize their operations? For instance, how can tools improve routing or modal mixtures to help stabilize costs and service levels?
A: When shippers are using transportation management systems, what they are doing is looking at all of the orders that are getting in from their ERP system. And they’re determining how best to load those orders onto a truck or set of trucks or rail. And then they’re trying to determine the most efficient way to deliver those orders to market. The most important thing that a shipper can do to drive down freight costs is make sure that that operation is as efficient as possible. Let me give you an example. The example would be if I’ve got 500 orders and I’ve got to put those 500 orders onto trucks. If I don’t do that properly, I could actually end up with one load per order. I could literally be delivering 500 orders independently. Whereas if I have some capability, such as PCS’ load optimizer or load fusion. We have the ability to say you have a grouping of orders, split those orders into loads, and then put those loads on the trucks based on the routing of that truck. And I can literally save myself hundreds of trips per year simply by optimizing the way that I’m loading my orders on the trucks. That’s probably the number one thing you can do when you’re looking at saving money is to make sure that you’ve got TMS that actually gives you the ability to optimize the orders as you’re putting them into loads on trucks. Otherwise, you will make many unnecessary stops. I’ll give you an example. This is kind of a funny story. But Amazon came to my house three times yesterday. I honestly believe that Amazon could have come to my house one time yesterday. I know where their warehouse is, but because they’re not running as efficiently as they can, they are making multiple stops that cost them a lot of money. By appropriately putting orders on the trucks and delivering the market in the most optimized way, and leveraging AI technology to do that. You can actually reduce those numbers of stops by hundreds.
Q: The state of the supply chain has made it necessary for shippers to re-evaluate and change their sourcing strategies to get materials and transport capacity. Are there new tools available that can help with capacity procurement?
A: At PCS we’ve been focused just on this problem. And what the problem is putting the right carriers in contact with the right shippers. There are new innovations coming out that give shippers that are on the PCS platform, the ability to get visibility into all the carriers on the PCS platform. Of course, the carriers that have asked to give visibility to our shippers. This capability, called carrier address book, shows that we are certainly doing our part to make sure that our shippers have more carriers to choose from. We also have the ability to ingest data from a wide variety of sources and connect to partners. For example, our shippers now have the ability to distribute freight using Uber freight. They can tender loads to Uber freight, where they now have access to the huge array of carriers that are available to Uber. These partnerships and to our own carriers, and through third parties such as Uber freight provide much more capacity to our various shippers and all the shippers that are using the platform.
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