What Is Managed Transportation?
Did you know that 90% of Fortune 500 companies use managed transportation services to enhance their logistics operations? Keep reading to learn more about managed transportation and why high-performance businesses across the country seek out these services.
How Managed Transportation Services Improve Your Supply Chain Operations
In transportation and logistics, speed, efficiency, and accuracy are critical components of a successful supply chain. However, it can be challenging to remain agile when managing your supply chain operations on your own. Finding a suitable carrier, establishing the optimal shipping routes, tracking shipments, and fielding customer service inquiries can quickly become overwhelming.
Managed transportation is the process of outsourcing your transportation and logistics processes to a third-party provider in order to optimize your supply chain. These providers leverage their industry expertise and modern transportation technology to streamline the shipping process, lower freight spend, and provide comprehensive transportation solutions.
4PL Providers Create Long-Term Solutions for Your Supply Chain
You need access to experts to achieve the most streamlined, efficient supply chain network. Fourth-party logistics (4PL) providers are precisely that. Using a combination of industry expertise and cutting-edge transportation management systems (TMS), they help you manage every aspect of your supply chain operations, from carrier management and network design to freight analytics and reporting. By leveraging their expertise, you can maintain a highly visible, scalable, and efficient supply chain.
How Does Managed Transportation Work?
It’s easy to say that outsourcing your logistics operations to a third party can streamline or optimize your supply chain, but how do 4PL providers actually do that? Below, you’ll find four critical steps of the shipping process and see how managed transportation providers use their expertise to simplify supply chain management.
- Procurement – 4PL providers help you find the right carrier for your shipping needs. They assess carrier compliance, accessibility, and capacity requirements to connect you with reliable carriers that get the job done right. 4PL providers perform the RFP and bid response process for you, helping you find the most cost-effective shipping partner for your loads.
- Rate – After procuring bids for your shipments, your 4PL provider assesses carrier rates and determines which is best for your shipping needs. Your 4PL provider ensures you get the best rates on every shipment, lowering overall transportation costs.
- Plan and execute – Next, your 4PL provider plans and executes your shipment. They determine which shipping mode is most effective for your shipment, whether that be dry van, refrigerated, or intermodal. Your 4PL also establishes the most optimal shipping route for your load, avoiding costly routes, dangerous weather patterns, and other potential disruptions to the shipping process. After planning, your 4PL provider manages the execution of your shipment, ensuring your carrier is on track to deliver your shipment on time. They also address any issues relating to shipping overages, shortages, or damages.
- Settle – After your shipment arrives at its intended destination, your managed transportation provider assists you in settling the bill for the shipment, as well as managing fuel surcharges and other freight costs. In addition, your 4PL provider can manage freight claims and provide in-depth analytics to optimize shipments down the line.
Data-Driven Technological Solutions
At the end of the day, the logistics industry is driven by data. But the data that the supply chain generates can be hard to navigate without the proper tools or industry expertise. That’s why many 4PL providers implement TMS software into your network. TMS software creates a centralized communication channel between individual client, carrier, and vendor systems,and it makes sense of the wealth of data that is produced from your supply chain operations.
While your shipments are en route to their destinations, TMS software provides real-time tracking, allowing you to avoid unexpected disruptions and inform clients of any updates on their shipments.
TMS software also provides instant access to insights that allow you to make more strategic and informed business decisions. TMS software fills the gaps in your business intelligence by combining external sources of data from clients, carriers, and vendors with your internal processes. This allows you to mitigate discrepancies, manage your inventory more accurately, and keep operational costs down through increased efficiency.
The future of logistics lies in data and analytics. Want to learn more about how TMS software provides actionable insights that improve your supply chain operations?
Benefits of Managed Transportation Services
When you partner with a third-party logistics company for managed transportation services, you don’t just gain access to improved data analysis and better shipping routes—your day-to-day operations become more efficient, and you’re given the opportunity to spend more time innovating and focusing on core business processes.
Here are a few more ways that managed transportation services enhance your supply chain operations:
Risk Management
Every company aims to avoid delays, disruptions, and other logistics issues, but that can be hard when you’re trying to manage your logistics operations on your own. Managed transportation services from a 4PL provider reduce the risk of unexpected shipping and inventory problems affecting your bottom line. By managing carrier relationships, improving supply chain network design, and providing actionable data, 4PL providers help you address inefficiencies and avoid potential risks.
Cost Savings
Managed transportation services help you cut down transportation costs by choosing reliable carriers and avoiding costly shipping routes. In addition, the insight gleaned from their data analysis allows you to make informed, cost-effective decisions that set your business up for success down the line.
Simplify Your Day-to-Day Operations
As mentioned earlier, partnering with a managed transportation provider gives you the leeway to focus on critical business operations without becoming bogged down by the complexities of your supply chain. Instead, you can focus on improving your product, providing employee training, or communicating with clients.
Improved Visibility
One of the most significant benefits of managed transportation is that you gain insight into the whole of your supply chain operations. From top to bottom, loading dock to last mile, you have the ability to see how your supply chain operates throughout the entirety of the process.
Discover The Sheer Difference
Partnering with a 4PL provider like Sheer Logistics is a great way to optimize your supply chain. As your managed transportation partner, we use our TMS software to provide you with meaningful supply chain analytics while also helping you manage carrier relationships, freight claims, and audits. Reach out today to learn more about how managed transportation can benefit your logistics operations.
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