Efficiency and cost-savings are everything in modern manufacturing and logistics. Most businesses offer discounted shipping for volume orders, but customers are always expecting faster service at lower rates. Finding ways to cut costs in order to provide this becomes increasingly difficult. However, here are 5 ways to improve freight management for you and your customers.
1. Understand federal regulations
The federal government and DOT keep a close eye on shipping practices. Random checks and weigh-ins are an unavoidable fact of doing business, and this can mean delays for shipments, even if you don’t own the trucks. If you do, you could be looking at further delays and fines. Even invalid documentation, depending on which agency is asking questions, could land you in hot water. Many companies today rely on tracking chips in each vehicle to ensure drivers are sticking to the schedules and limitations imposed by regulations. This can be as valuable to small fleets as to large ones.
2. Track key KPI’s
Prestige Worldwide Logistics said, “Monitoring and tracking key performance indicators can help you identify patterns and problems that need addressing.” Some of the most important for freight management include:
* Labor productivity – this refers to supporting labor such as those involved in order fulfillment.
* Scheduled pickups and deliveries – Trucking companies do their best to adhere to schedules.
* Revenue – Each shipment should provide a given yield in profits relative to costs and load value.
* Fuel – part of that revenue depends on calculated fuel costs. Failure to monitor and factor in changing fuel costs reduces revenue figures to a guessing game.
* Maintenance – Every single vehicle, or piece of equipment, is going to involve maintenance cost at some point. Even preventative maintenance takes its toll and should be figured into comparison costing.
* Miles driven off-route – A trip from point A to point B on a given route should take x-number of miles every time. Although there may be detours due to accidents or road construction, unnecessary side-trips cost the company more money.
* Delays – all delays at all points, for any reason, should be documented for validation, cost evaluation, and estimation of the risks of late delivery.
* Load and unload times – Tracking load/unload times can help to identify weak points in that area which should be investigated to suggest solutions.
3. Logistics Software
Even the biggest companies fail in their promises. One of the most cost-effective approaches is logistics software. The value comes from having a digital tool for logging and evaluating given inputs on schedules, projects, and equipment to gauge efficiencies and help ensure product is delivered as promised. Logistics management software is a smart tool that can provide timely aggregates of sales volumes, mileage, maintenance fees, revenue, and much more at several levels of detail.
4. Develop close relationships
Freight managers know that their operation is always limited by the weakest link in their supply chain. Excessive demands, complaints, and slow service or payment can alienate people you rely on to ensure product and materials flow smoothly. If there’s a problem, find out who you can talk to in the organization that will actually negotiate and get things done. If there are recurring problems that can’t be resolved, then it’s time to research possible replacements. But defined expectations and open communication will help to avoid misunderstandings that can create bad relationships.
5. Damage control
Taking steps to reduce damages can go a long way to improving revenue. Damages mean lost product, delays, and poor customer experience that drives away business. Some damages due to bad weather or road accidents are bound to happen. But careful monitoring helps you establish baselines and more quickly note when damage rates are spiking or routinely high. This suggests operational problems that have to be corrected. Even some natural hazards can be minimized by employing automated systems to identify danger areas and re-route shipments.
Freight management can be a very complex responsibility. This depends on approaching the problem with good planning, organization, and efficient execution. Adaptability is also important given all the things that could go wrong. One of the chief traits of good freight management is accepting that things do go wrong, and learning from those mistakes.