A new study has found that 59 percent of shippers use performance metrics to manage freight costs and 43 percent are currently running or planning to implement a transportation management system (TMS), according to research conducted by the privately-owned truckload carrier U.S. Xpress Enterprises.
The survey of more than 400 logistics managers, conducted in conjunction with Peerless Research Group, also shows a strong preference for dynamic optimization, with nearly three-fourths of all shippers preferring their carriers use present, actual shipping data rather than historic data to set their rates.
In terms of shipping timeframes, 41 percent of respondents said they are booking freight one day in advance and more than four in five scheduling three or fewer days ahead. The top strategies shippers use for controlling freight costs are: consolidating shipments (60 percent); improving decision making and planning utilizing reporting (58 percent), working with fewer partners (53 percent), optimizing internal resources (52 percent), implementing or planning TMS (39 percent), adopting key performance indicators (KPIs) for carriers (38 percent), and working with more carriers (33 percent).
Among the 59 percent of carriers evaluating their freight costs, the most common aspects of shipping being measured include: spend by carrier (74 percent), cost by route (72 percent), on-time performance (68 percent), spend by shipment volume (66 percent), and cycle time and carrier capacity (32 percent each).
“It is also clear from the study that many of those who are using a transportation management system are happy with it, with 21 percent indicating their belief that they are using these tools to their fullest advantage and for multiple initiatives, from tracking and tracing and load and route optimization, to provide mode selection and real time tracking,” the carrier said.
The study also showed shippers are continually seeking to advance their operations. Areas earmarked for improvement are load optimization – consolidation, backhauls, etc. (44 percent); electronic communication – EDI, XML (44 percent); billing and invoicing (39 percent); reporting capabilities (37 percent); and integration of logistics and transportation applications with other enterprise apps –ERP, WMS, etc. (34 percent).
“The survey demonstrates that there is great variance among shippers in terms of the level of technology they employ in doing freight optimization,” said John White, executive vice president of sales and marketing at U.S. Xpress. “However, regardless of what systems they are currently using, it is clear that more widespread and efficient use of transportation management systems, clearer supply chain visibility, improved analytics, enhanced cooperation and data sharing between carriers and shippers and more up-to-date data could go a long way toward optimizing loads and reducing costs for everyone involved.” - Eric Johnson