Whether you’re a new transportation brokerage or you’ve been around a while, there’s one thing you need to effectively (and efficiently) run your business.
That’s a transportation management system.
You can’t run a transportation business of any kind without some sort of transportation management system. You need a system from the very first day your business starts.
But just how much should you invest?
What you should look for depends on your specific business needs. New businesses are often limited by budget, and look for the cheapest possible option to manage the many moving parts of providing transportation services.
At first, that might work. When you only have a few clients and their needs are simple, you can use one of the low cost options available, and get by with limited features and a less than ideal user interface. With a new business, pinching pennies is how you get by, and you’re often willing to live with a TMS that’s less convenient than you’d like in order to save some money.
However, you may be at risk of being penny wise, pound foolish.
An effective transportation management system saves you time in dozens of little ways, allowing your team to accomplish more in less time. We discussed the time saving aspects of a good TMS in our last blog post, which you can read by clicking here.
What you should spend on your TMS is something only you can decide. However, you do need to consider what you need out of it, what the return on that investment is likely to net you, and what level of service you can provide your clients as a result of your system.
If you only need to provide basic support or data for your clients, a simple, low cost transportation management system might just be enough. Many companies provide very basic software options for extremely low prices – but what that software can do is highly limited.
If your clients are small businesses or have only local or small shipping needs, then limited software can often give you enough support to keep them happy.
But what about when you want bigger clients, or more of them.
As your business grows and your clients become larger businesses, they’ll often require more detailed information from your business. Transportation brokers who’ve been around for some time know that as technology has improved, their clients have become more demanding. They want real time tracking information, detailed reporting capabilities, rate optimization tools to ensure they’re getting the best rates – and to keep their business, you need to provide these easily and quickly.
And that’s where the cheap, low cost management system that you were using begins to fail in effectiveness.
The low cost options are often missing the advanced capabilities of the higher priced software. They don’t integrate with your warehouse management system, or your carrier’s websites, or your accounting software. You often need to enter every bit of data manually, frequently double entering information from one system to another.
You still need to manually visit each load board to assist clients with partial loads that they need to ship. You have to create labels by hand each time, manually keep track of bills of lading, and otherwise do much of the syncing of data or documents yourself. Often, low cost transportation management systems are more like a single storage place for you to keep track of what’s going on.
Once you realize that you’re spending the majority of your day trying to keep up with organizing your data and simple maintenance, rather than handling client needs or finding new ones, you know that it’s time to upgrade the TMS you’re using.
A great transportation management system makes managing your data (all of your data!) into an easy, streamlined process that takes up a significantly smaller portion of your day.
A cheap TMS is a passive system that requires your input for most of its functionality.
When you invest in a higher quality TMS, however, more features become automated.
In a single sign in, you and your team should be able to manage all aspects of your carrier partnerships. Contact management and addresses should be in the system and easily used to populate documents, reports, or other data needs. You should be able to see if the carrier is insured and if there are any limitations in liability so that you can be certain that all of the transportation management services that you are providing for your clients are being done legally and that your clients products are amply insured.
Just starting out, you may have been able to get by with the bare minimum, but as your business grows, you need more advanced abilities to have effective relationships with your carriers. A better TMS will do more than simply provide a place for you to access the information you collect from your carriers. It’ll actively pull the data from their websites to allow you to better manage the information you need; whether it be rating, real time tracking and tracing, or invoicing.
The reports that you need to generate for managing your own business or for clients often require custom fields or custom combinations of data. Cheap, starter transportation management systems often won’t allow you to generate custom reports. You can still create the reports you need manually, but how much time does it take you to do so? A better TMS gives you the ability to set the parameters for your reports, generating exactly the information you need for your business or for a client without having to piece them together manually each time.
Often just a pipe dream when you have a TMS with the bare minimum, investing in a quality system allows you to dispatch and track shipments entirely through one portal. By connecting with your carrier’s website, your transportation management system will pull the needed information directly into your portal.
A top tier TMS will allow your clients to have access to their own portal, letting them see shipment status and track their shipments in real time for themselves.
You should be able to pull rates in real time based on your credentials with each carrier, allowing you to efficiently determine the most cost effective shipping for your clients.
In addition to integrating so completely with your carriers, you’ll also want to utilize a TMS that integrates with load boards. Sure, to start, you may not find searching the load boards yourself to be that much of an inconvenience – but the more clients you have, the less time you can spend searching for optimal shipping opportunities for clients with partial loads.
There are many, many capabilities your TMS should be able to handle and streamline for you.
When to shift from the bare minimum, low cost option to a higher class option is up to your business.
It’s worth considering the amount of time (and what that costs) you’ll spend by using a lower cost option as you first get your business up and running. There’s also the latency from changing systems, as you move from your first system to an improved one.
Even a better system takes time to get used to. A system such as BrokerWare, created by 3PL Systems software, while one of the easiest to use and learn in the industry, does still take time to get used to. Each time you change the software you use, you’ll lose some time while your team learns how to use it.
When your company has been around for several years, you have a unique set of challenges when it comes to changing your transportation management system. You’ll have to decide what is worth the investment and when it is time to upgrade, but at the same time, you know that switching software providers as seldom as possible is still a good idea.
You’ll want to invest in a system that provides everything you need NOW – and has the ability to expand or be customized for your future needs.
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