Making the Case for Managed Transportation Services
“Survival of the fittest” is the mantra of today’s freight market, as driver shortages, capacity imbalances, federal government regulations and robust economic conditions continue to impact transportation costs. These challenges are further being complicated by consumers demanding greater product variety and availability at the lowest price, which puts pressure on an organization’s already strained supply chain in an increasingly competitive market.
This report that originally appeared in Logistics Management explores how managed transportation services (MTS) can help shippers to address the industry’s biggest pain points, and we’re excited to share with you the following top takeaways revealed in “Making the Case for Managed Transportation Services.”
MTS + TMS = A True Logistics Solution
Many organizations are turning to MTS to help solve their logistical woes. The arrangement works like this: a shipper contracts with a third party to plan and execute freight moves on its behalf. Instead of the shipper’s own internal personnel planning and executing those moves, they are instead leveraged by the MTS provider to work on the shipper’s behalf. According to ARC Advisory Group, MTS can save shippers between 2% and 10% on transportation spend.
An MTS partner can also help shippers go a step further by offering their own proprietary transportation management systems (TMS) and other advanced solutions that allow companies to leverage flexible software deployment models.
For example, by providing a complete suite of transportation management, strategic capacity and cross-border and global trade services, Transplace’s customizable logistics solutions offer a number of benefits – including greater control over transportation operations, enhanced shipment visibility and improved supply chain performance. Other key advantages of working with an MTS provider like Transplace include:
- The “network effect” – Managing $8.5 billion in freight across a network of 30,000 carriers, Transplace provides a vast network that no shipper can attain on its own.
- Continuous investment in new technologies – Transplace leverages the latest emerging technologies into cost savings and other benefits for customers that may not have the internal resources to make those investments.
Bringing Clarity to Cloudy Visibility
What’s the top transportation concern of shippers these days? For many, it’s a lack of visibility. Companies want to secure capacity at below market rates while delivering high service levels. They also need to know where their equipment is at all times and whether loads will make it to their destinations on time.
MTS removes the guesswork through advanced technology that automates previously manual processes. With the digitization of the logistics industry, shipments are monitored by algorithms; capacity is secured via online automated auctions; and scorecards and KPI reporting are distributed automatically each and every day. An MTS provider also has professional logistics experts on hand at all times to intervene and manage the logistics process with speed and consistency – resulting in better service, greater predictability and lower total costs.
Benefits for Each Member of the C-Suite
With discussions of freight moving into the boardroom and becoming a greater focal point for many shippers, the argument in favor of MTS becomes even stronger. All stakeholders win, from transportation and logistics managers to CFOs to CEOs. Here are some of the benefits of MTS to each:
- Transportation and Logistics Managers – An MTS provider helps shippers save time and money by leveraging their providers’ transportation networks, prices, technology, capacity and economies of scale. Instead of juggling activities across 75 different carriers – plus their own network providers, many of which aren’t carrier- or routing dock-compliant – logistics pros simply have to work with a single partner.
- Chief Financial Officers – As transportation becomes a larger line item in a CFO’s budget, an MTS provider combines world-class technology and freight management to take over the management of those networks and deliver ROI within a year or less.
- Chief Executive Officers – With an eye on the bottom line, partnering with an MTS provider alleviates many of the business performance and operational headaches associated with transportation that were formerly handled in-house, draining time, staff resources and budget.
The Time for MTS is Now
Going forward, the report predicts that we should expect to see MTS playing an increasingly important role in the manufacturing and distribution industries, both of which have been hit hard by government regulations, capacity issues, rising fuel costs and ever-shrinking delivery windows. Now is the perfect time to engage with a reliable MTS partner.
What are the biggest benefits you’ve gained by working with an MTS provider?