Part 3 of 22 Ways To Reduce LTL Costs That Don’t Involve A Price Reduction

3. Use A Quality TMS

A TMS (Transportation Management System) is an absolute for an LTL shipper of any size. And LTL shippers have no reasonable excuse not to use one, as many LTL carriers today provide a free TMS. Virtually every LTL-based 3PL provides a TMS to their customers. And for LTL shippers not using a 3PL, there are multiple options available beyond the free versions, with wide-ranging price points that mostly align with features provided.

A basic TMS provides shippers to quickly secure quotes from their LTL shipper base, generate and print a BOL, issue a pickup request, and track/trace shipments tendered to carriers. A more-advanced TMS will provide choiceboards by carrier and by service, allow for a product and customer database, enable carrier payments, secure carrier documents, and provide invoice reconciliation. A superior TMS will provide custom KPI reporting with graphics, integration with accounting platforms, and full EDI/API integrations with carriers.   

A recent survey from Mastio & Company suggests 65% of LTL shippers do not use a TMS. That metric is down from 73% in 2018, so the adoption rate is strengthening. Still, 65% is a staggeringly low number. As you might surmise, the adoption rate increase as shipper size increases. Only 13% of shippers with 2 or less shipments per week use a TMS. On the other end of the spectrum, LTL shippers with over 100 shipments per week have a TMS adoption rate of around 60%. But I ask myself: How do these very-large shippers manage their volume without a TMS?

Using a TMS provides a multitude of benefits including:

·        Optimized carrier shopping: Yes, many shippers use a TMS to rate-shop or find the cheapest carrier. But there is much more to it than that. Shippers can carrier-shop to match the right carrier to each shipment. To find the carrier with the right blend of price and service. Some carriers do not want residential or liftgate shipments and will indicate that with their pricing. A good TMS will show transit times, differentiate direct from non-direct service levels, note carrier types, loss/damage history, and price. The best ones even deploy a carrier scorecard.

·        Ensure high quote accuracy: Many TMS’s encourage or even force shippers to enter dimensions. By using warning messages, this ensure the correct class is chosen when density and class do not align. And this ensures fees like Over-Length are properly accounted for. Most TMS’s allow selection of common accessorials to further ensure quote accuracy and can warn when rules like Density Minimum or Linear Foot may apply.

·        Capture of Quotes for each shipment: Auditing invoices is critical to manage freight spend and maintain high visibility of unexpected charges. A TMS allows users to generate and save a quote for every shipment.

·        Efficient BOL generation: A TMS can quickly generate a BOL directly from the quote, print the BOL, and even issue the BOL to the carrier via EDI or API.  Carriers are quickly embracing the new Electronic BOL standard, issued via API.

·        Increase Visibility: A TMS allows the shipper to track and trace all current and historical shipments. Many even use a calendar-based interface. 

·        Reduce Administrative expenses: A TMS eliminates the need for multiple carrier website logins. All administrative work from quoting to tracking/tracing can be done via one common platform. This reduces phone calls to carriers which they will greatly appreciate. A solid TMS will also retrieve all critical documents such as PODs and even reweigh tickets. 

·        Interface with Accounting: The higher-end TMS’s will interface with several accounting platforms including Quickbooks. 

·        Integrations: A TMS can integrate with your WMS/ERP so that customer orders can be fed directly into the TMS for quote and BOL generation. A TMS can integrate with outside vendors such as Hubtan for invoice automation.

·        Shipper of Choice: Shippers using a TMS stand the best chance of being viewed by their LTL carrier partners as a Shipper of Choice. Use of a common BOL form, automated communications via EDI and API, and fewer invoice discrepancies are just a few of the ways a shipper can help their carriers by utilizing a TMS.

The benefits above are far from an exhaustive and complete list. Bottom line, a TMS will benefit LTL shippers by streamlining and automating their back-office, providing maximum shipment visibility, and positioning themselves as a Shipper of Choice. A TMS can be obtained from most LTL carriers for free or can be purchased at multiple price points depending upon features needed. Any LTL shipper not using a TMS today, regardless of their size, should take the time to obtain a TMS.