How to optimize your transport purchases with TMS!

Question: What’s the most efficient way to manage, analyze and improve your daily transport needs? Answer: by using a TMS! This way your purchases are tracked, anticipated and shared – in a word, they are totally controlled by your TMS, giving you a whole range of benefits. Here’s a summary of the advantages that a Transport Management System will bring you.

The TMS as the originator of your transport purchase

The whole process starts with an order for products placed by a customer with its supplier. Once entered into the TMS, this information becomes a service awaiting its transport purchase. This involves a flow of information concerning the shipper, the recipient, the quantities to be transported, the transport units (pallets, packages, containers, etc.), the dates and times for loading and delivery, the products, the instructions, the transport purchase price, perhaps the sale price, the margins, etc. Thanks to the TMS, the transport order starts its life cycle, tracked and updated on a daily basis.

All the stakeholders are involved and connected

The company’s employees: they are the ones who purchase the transport. They use the TMS for its price simulation and analysis functions. What’s the benefit? This enables them both to monitor their budget and how it is spent, and also to negotiate the various contracts involved. From an operational viewpoint, the charterers and freight operators access the TMS to buy their everyday transport requirements. They can thus create requests for price quotations as required, and then carry out cost control and see to pre-invoicing.

Transport providers: these are the carriers, freight forwarders and forwarding agents who submit their prices, and confirm or reject the transport requests they are entrusted with.

Brought together around the TMS, the stakeholders in the purchasing of transport services interconnect with one another, and speed up and simplify the sharing of exchanged information. It is a decisive factor in the correct functioning of a transport purchase.

Functions acting as levers of optimization

Cost control and the correct application of prices: a price is applied to each transport order, which can then be checked and validated by the shipper and the carrier. The prices are notified, validated and entered as they arise. Then any exceptions or disparities can be detected and resolved.

Automatic selection of the best carrier: depending on each transport order and its price, the TMS thus becomes an effective tool to help you decide and automatically select the most suitable carrier for the order concerned, according to various criteria such as price or service rating.

Simulation of the best modes of transport: depending on the carriers suggested, whether they operate by sea, air or road, the TMS helps the user operate the best choice for its transport flows, including multimodal options.

The TMS: a strategic tool

Scenarios can be re-enacted so as to give an effective response to a call for tender, to renegotiate a contract, or to obtain key performance indicators (KPIs) for analyzing processes. The TMS provides an objective measurement of the carrier’s performance over and above its purchase price, through analyses of its shipment volumes, compliance with carriers’ deadlines, delivery quality, revenue figures, etc. This is a function that, from the carriers’ viewpoint, offers the chance of achieving benchmark levels and working on opportunities to improve so as to offer customers a better service.

Confirmed benefits

In terms of direct transport purchase costs, and internal performance costs within the company, a direct reduction in transport purchase budgets of between 5% and 15% can be observed when a TMS is installed. More efficient use of trucking space, use of the most suitable carrier for each and every shipment, and the correct application of pricing factors are the main reasons for this. Into the bargain, cost reduction is accompanied by improved operational productivity, mainly due to a better sharing of information. The processing of all these factors in real time makes it possible to anticipate each carrier’s features to offer its users increased proactivity and productivity!