EFFICIENCY, MARGINS, AND PROFIT: WHAT YOUR THIRD PARTY LOGISTICS COMPANY NEEDS FROM ITS TMS
In the less than truckload world, businesses succeed on razor thin margins.
As Jeff Bezos once said, “Your margin is my opportunity.”
To prevent your competitors from seizing the opportunities in your margins, you need an efficient, effective system for running your third party logistics business.
You need insight into those margins for each LTL shipment you manage, and you need a way to review all the information in manageable reports.
What you need is a transportation management system.
That’s not news, though. You probably already have a TMS that you use. The real question is what else could your TMS be doing for your business to improve your profit margins?
MORE INSIGHT INTO YOUR DATA MEANS INCREASED REVENUE
Before you can determine where your business could be more efficient, you need data to review. Reporting capabilities are essential to seeing both a big picture view of your business, as well as getting into the granular details that offer those margins of improvement.
So first off: your TMS needs to offer the ability to generate a report from any data within the system.
Additionally, it shouldn’t place limits on those reports. You should be able to generate any customizable report you need, at any time, without having to pay extra for each report that’s not a standard offering. BrokerWare™ even allows you to drag and drop the fields for your reports – a seemingly simple feature, but one that means you can arrange data in the exact way that makes sense for you.
We’re not talking about just insights into past activities – real time insights are just as valuable.
Every day, your loads generate points of data that you need to be able to review.
Each time a load is processed, you should be able to see that data.
You should be able to track your loads as they pass through checkpoints – the same level of insight that Amazon provides for single packages. LTL shipments aren’t stuck in the dark ages, and the TMS you use should be capable of offering the same insights as your load is scanned. It’s all digitally handled, after all, so why wouldn’t that information be accessible by your TMS?
CUSTOM-BUILT TMS, OR AN ADAPTABLE SOFTWARE THAT’S READY TO USE?
In order to know what’s most essential to your business, and where you could be making more money, you need both the big picture view of your LTL shipments as well as a more granular view into each load.
This also all needs to integrate with the necessary tools for managing your entire company. From the WMS to QuickBooks – your TMS should be capable of integrating with everything.
These integrations and configuring of your reports at the heart of what differentiates a modern TMS (and a modern 3PL) from the laggards: they’re adaptable. You don’t need to fully customize your TMS anymore. That’s an option best left to the enterprise sized companies, who manage complete supply chains and hundreds of loads each month.
For the small to mid-sized 3PL provider, an adaptable tool that’s customizable where it counts (like for the customer’s login portal) is all that you really need. Trying to customize the back end is an exercise in futility when trying to keep up with the breakneck pace of technology.
Attempting to build or order a completely customized version of a TMS is almost a guarantee that by the time it’s completed, the software will already be outdated.
On top of that, a completely customized TMS makes it incredibly difficult to hire for and train staff members to use it. You can’t create a job listing on LinkedIn with a request for someone already versed in using your particular software – because unless they work at your company, they’ve probably never been exposed to it.
The software also needs to be easy enough to use that your team actually uses it.
In the end, what’s the point of an expensive piece of software that no one actually uses?
IMPROVING YOUR PROFIT MARGINS:
While you’re committed to a TMS purely for the management aspects (how would you keep your business organized otherwise?), it also should enable you to improve your profits.
An effective TMS offers you multiple ways to increase revenue, optimally without excessive effort on your part.
BrokerWare™, for example, offers RateShare – a way for you to find competitive rates with carriers you don’t already have a contract with. You can learn more about it by clicking here.
On top of that, BrokerWare™ enables you to provide your customers with their own portals to log in and request shipments.
When you’re competing in an industry as cutthroat as LTL, you need to offer something to your customers that differentiates you in a major way. That can be the portal you offer your customers: one that lets them log in, get quotes, and book shipments all online.
BrokerWare™, and this blog post, are for the LTL shippers out there – but the point remains the same.
Many (or even most) of your competitors aren’t offering this capability to their customers.
What better way for you to swoop in and gain that business for yourself than by offering a service they can’t replicate?
Rather than worrying about your competitors stealing the business from your margins, find opportunities in their margins instead.
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