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How can you use TMS to optimize carrier selection?

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Carrier selection is a crucial decision for logistics managers who want to optimize their transportation costs, service levels, and performance. Choosing the right carrier for each shipment can be challenging, especially when you have to consider multiple factors such as rates, capacity, transit time, reliability, and compliance. That's why many logistics managers use transportation management systems (TMS) to automate and streamline the carrier selection process. In this article, you will learn how you can use TMS to optimize carrier selection and improve your logistics operations.

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Mark Aurig

Director of New Clinic Launch
Yaseen Ayoub

Maersk | Product Growth & Development | Inland Transportation | Customs | Cross Border Transportation | Afghan Transit…

1 What is TMS?

TMS is a software application that helps logistics managers plan, execute, and monitor their transportation activities. TMS can integrate with various data sources, such as enterprise resource planning (ERP), warehouse management systems (WMS), and carrier websites, to provide visibility and control over the entire transportation lifecycle. TMS can also perform various functions, such as route optimization, load consolidation, freight audit, payment, and reporting, to help logistics managers optimize their transportation efficiency and effectiveness.

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Yaseen Ayoub

Maersk | Product Growth & Development | Inland Transportation | Customs | Cross Border Transportation | Afghan Transit | First Mile | Mid Mile | Intermodal Railways | Warehousing
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TMS proves invaluable for optimizing carrier selection. TMS automates the rating process, considering factors like cost and delivery time, facilitating the identification of the most suitable carriers. Real-time visibility into carrier performance, cost analytics, and historical data assessment enable informed decision-making. TMS also enhances collaboration with carriers, streamlining communication and addressing issues promptly. The system's dynamic route planning capabilities, compliance management features, and integration with ERP systems contribute to efficient and cost-effective carrier selection. Continuous monitoring and adjustment based on evolving circumstances ensure a responsive and optimized transportation network.

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2 How does TMS help with carrier selection?

Using TMS can provide you with numerous advantages when it comes to carrier selection, such as reducing manual work and errors through automated RFQs, providing real-time information and alerts, and collecting and storing data from various sources. This can save you time and money while also reducing the risk of human errors and miscommunication. Additionally, TMS can help you monitor and manage your carrier relationships, as well as identify and resolve any issues or delays that may affect your service levels and customer satisfaction. Furthermore, TMS can generate reports and dashboards to measure your transportation performance, while providing insights and recommendations to optimize your carrier selection and transportation strategy.

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Mark Aurig

Director of New Clinic Launch
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A TMS provides valuable insight into service provider performance and it's impact of the efficiency of other parts of your supply-chain network. A company can use this information to make decisions regarding allocations and award of contracts. A TMS also provides an effective way to implement the solution that's been created and to enforce disciplined execution throughout a complex network spread over a diverse geography.

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3 How to use TMS to optimize carrier selection?

To use TMS to optimize carrier selection, you need to follow some best practices. Firstly, it's important to define your objectives and criteria, such as cost, service, speed, reliability, safety, and sustainability. You should also consider customer expectations and requirements, as well as internal policies and procedures. This will help you narrow down your carrier options and select the best fit for your needs. Then, you can use TMS to compare and negotiate rates and services from different carriers. You can send RFQs to multiple carriers, receive and analyze their responses, and select the best option based on your criteria. Additionally, you can use TMS to negotiate discounts, incentives, and contracts with preferred carriers. After selecting and contracting your carriers, you can use TMS to monitor and evaluate their performance and compliance. You can track shipments, receive notifications of any issues or delays, communicate with carriers and customers, measure KPIs such as on-time delivery and freight cost, audit compliance with standards and regulations, and review and approve invoices and payments.

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4 How to choose the right TMS for your carrier selection?

When selecting a TMS for carrier selection, you need to consider functionality and features, scalability and flexibility, as well as cost and value. The TMS should be able to perform the functions and features you need for your carrier selection, such as RFQ management, rate comparison, contract management, shipment tracking, freight audit, payment, reporting and analytics. It should also integrate with your existing systems and data sources. Additionally, the TMS should be able to scale and adapt to your changing business needs and market conditions. It should support your growth and expansion, diversification and customization. Moreover, it should accommodate varying shipment volumes, modes, destinations, requirements, carrier relationships and contracts. Lastly, the TMS should provide you with the best value for your money and help reduce your transportation costs while improving service levels and enhancing performance.

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5 How to implement and use TMS for your carrier selection?

When you have chosen the right TMS for your carrier selection, you need to ensure that you implement and use it effectively. To do this, you should plan and prepare for the process by setting goals, assigning roles and responsibilities, allocating resources and time, and communicating with stakeholders. Additionally, you should review and update your data, processes, and policies as well as contracts and agreements with carriers. After implementation, you should train and educate your users on how to use TMS efficiently and provide them with the necessary support. Lastly, you should monitor and improve your results by measuring performance and compliance, customer satisfaction, and loyalty. You should also identify opportunities for improvement and innovation as well as leverage best practices.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Galih Kusuma A.

Supply chain | Consultant | Data Analytics | Ecommerce |Operation| Technology Enthusiast
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A Transportation Management System (TMS) optimizes carrier selection by leveraging historical performance data, automating rating and routing, and providing real-time visibility. It streamlines cost analysis, monitors contract compliance, and adapts to dynamic changes in carrier availability and rates. Integration with marketplaces expands options, while scenario planning supports data-driven decision-making. In essence, TMS is a versatile tool for enhancing efficiency in carrier selection within logistics operations.

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How can you use TMS to optimize carrier selection?

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1 What is TMS?

2 How does TMS help with carrier selection?

3 How to use TMS to optimize carrier selection?

4 How to choose the right TMS for your carrier selection?

5 How to implement and use TMS for your carrier selection?

6 Here’s what else to consider

Logistics Management

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How can you use TMS to optimize carrier selection?

1

2

3

4

5

6

1 What is TMS?

2 How does TMS help with carrier selection?

3 How to use TMS to optimize carrier selection?

4 How to choose the right TMS for your carrier selection?

5 How to implement and use TMS for your carrier selection?

6 Here’s what else to consider

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