As companies grow over time, issues can form within their operations, creating problems and limitations for the business. This is especially true for companies with complicated supply chains, such as manufacturers and shippers selling through multiple channels. The impact can be minor or big systemic issues that impact operating efficiency, service to customers, and the bottom line.
There can be several reasons and causes behind the issues, too. Some may result from bad decisions or habits that have developed over the years based on departments doing things the way they have always been done. Often, things continue in a bad way. No one may even recognize there are problems because nothing is really ever questioned. Even if they do, a lack of experience or will to fix them may allow the issues to continue.
Regardless, the result is that the companies continue to operate a logistics function that is, at best, not a catalyst to the company’s success—which it should be. Or, at worst, it’s a severe detriment to customer satisfaction and the bottom line.
The supply chain is not a function to be overlooked, and the details of execution matter. The speed and accuracy of deliveries have a big impact on customer satisfaction and future sales. Shipping costs can typically make up 10% or more of revenue, so overspending in the area is a big hit to the bottom line. These are just two examples, but they illustrate the extreme importance of logistics to every company's success.
When it comes to specialized functions like logistics, companies often don’t know what they don’t know. This can make some outside perspectives very valuable. A successful approach to creating a well-optimized shipping operation often needs to break negative patterns and habits, which is a primary benefit of working with a managed transportation partner.
Managed transportation providers allow you to outsource the planning and execution of your shipping needs. This means you can focus your time and energy on other aspects of your business.
Most companies that ship freight are familiar with the common options for moving loads. Companies will typically run their shipping options in an ad hoc way. They might work directly with a short list of TL and LTL carriers or perhaps have relationships with 3PLs or brokers as an intermediary to help find trucks. Some departments may pay extra for shipping technology like a TMS to help their process be more efficient.
An even more complex situation is a company with multiple locations, each with different carriers, processes, and technologies in place. At the core of the logistics problems many companies deal with the issue of decentralization because it often works against the creation of standardization and visibility, which are necessary parts of a well-run shipping function.
The goal of every logistics department is to create the most efficient processes that lower costs and improve delivery performance. Removing such ad hoc decision-making and processes, as well as decentralization, a managed transportation partner can root out many of the inefficiencies in the logistics operation.
Most companies will immediately gain many practical benefits from working with a managed transportation service provider. Here are five of the most impactful.
The experience of a managed transportation provider ensures your supply chain operates better day-to-day and that you can adapt to trends in the marketplace.
For example, freight rates are very cyclical. Ensuring you do not overpay as rates move up OR down is only possible when you know what companies like yours should be paying in the current environment. Managed transportation partners bring knowledge and keep your operation moving forward.
Contact Loadsmart to learn about our bespoke Managed Transportation Services and see how your company can improve delivery performance and cut costs as our partner.