All businesses rely on a supply chain to provide or receive services, information, products, or materials in a prompt and cost-effective manner as possible. Without a reliable means of keeping information flowing, shelves stocked, and locations supplied, customers are disappointed, and business suffers.
If your company is receiving and shipping goods, then freight management is a key part of your business, and it’s important to make sure that your supply chain is running as smoothly as possible. All businesses have their unique strategy for meeting their customer’s needs and growing the business. This also means the challenges will be unique. To gain an advantage in the market, freight management requires a custom-tailored approach based on the appropriate software, processes, and people to meet challenges and turn them into opportunities.
Freight Management Role in the Supply Chain
Freight management is part of the overall company’s supply chain strategy and is focused on the tactical processes to select the best mode and carrier for the transportation of the goods to meet service and budgetary goals. On the surface, freight management may seem as simple as packaging the product and giving it to the carrier. However, there are a lot of behind-the-scenes steps in the process and start before the freight is tendered to a transportation provider. The general steps include:
- Evaluation of your products and what information is needed to be transported by each mode (e.g., class if less than truckload, packaging, hazardous material information or restrictions, proper clearance documentation, special services).
- Vetting carriers, agents, brokers and negotiation of pricing and services.
- Optimal route evaluation for each shipment based on cost, required transit time, and special requirements and services needed (e.g., inside delivery, lift-gate, home delivery, tarping, protect from freezing, delivery or receiving window)
- Provide all necessary documentation in a clear and complete manner.
- Track the shipment and acting should a problem arise.
- Departments receiving timely information for customer support, filing claims, invoicing, forecasting, purchasing, and finance reporting.
- Collect data and analyze for KPI’s and improvement.
In-House or Outsource
Like most businesses, you’re probably wondering what’s the best means to provide freight management in your company. Handling the entire process in-house is an option. This comes with direct and indirect costs. Direct costs include transportation management software, packaging, and labor to select the right carrier and prepare the shipment. Indirect costs include developing and retaining expertise for vetting vendors and carriers and negotiation of pricing, setting up and maintaining processes and systems, data and information tracking and handling issues, timely and accurate information to the warehouse for shipping, accounting for invoicing, and customer service.
Outsourcing your freight management does not reduce a company’s control. When a true partner is selected the relationship develops as if the process is in-house. Costs are controlled, and the ability to scale up or down is instantaneous. By placing the expertise with a company where freight management is their core business, it allows your company to focus on your core competencies.
Selecting your Partner
Industry experts agree a freight management company provides agility and cost controls to support customer service and review processes. Consider the following when evaluating a transportation management partner:
- The company culture fits your company. You are not “throwing this process over the wall” and hope it works. To do this properly, the company you choose will be integrated into your business. They complement you and your business.
- Customer service. You want them to be an extension of your company and can be relied upon to work with your vendors, customers, and the transportation company.
- Expertise to help evaluate your products for each shipping mode.
- Network of industry vendors – domestic and international.
- Expertise in vetting and negotiating with vendors and modes of transportation you require.
- The right systems to support your needs. Chief among them being a robust transportation management system (TMS) that fits your company’s needs and allows for strategic growth.
- Provides tactical data for daily operations, and periodic business reviews.
- Expertise to review more than just transportation data to support the strategic evolution of your network, inventory, and other supply chain components.
Is Nexterus Your Transportation Management Partner?
Nexterus manages shipping within the United States and internationally, whether the mode is parcel, less than truckload, truckload, intermodal, air, or ocean. For those shipping internationally, we have in-house licensed Custom Brokers, and an extensive network of brokers and agents around the world. Along with our proprietary Transport Management System, we have a best-in-practice customer service group, with 24/7 live support. Other supply chain expertise includes warehousing, network optimization, and forecasting. We bring this all together to tailor a partnership to turn your challenges to opportunities.
If you are considering a freight management partner, we trust our culture and services will allow Nexterus to be the company you want to partner with for your supply chain management. Nexterus has provided traffic management and other supply chain services since 1946, giving us decades of experience in shipping and building long-term relationships with our customers and vendors. We know it works, as our average client tenure is 15 years.
If Nexterus sounds like the kind of company you’d like to have to manage your supply chain, then fill out and submit a contact form today.