The global and domestic transportation landscape is becoming increasingly complex. To compete effectively, both shippers and logistics service providers (LSPs) need a transportation management system (TMS) that can deftly handle international, multi-leg shipments across a variety of modes (i.e., “omni-modal”).
On the shipper side, orchestrating the end-to-end transportation process hasn’t gotten any easier over the last decade. Neither has the efficient coordination of customers, suppliers, carriers, freight forwarders, government agencies, and custom brokers. The fact that world trade grows at an average of 5.3 percent annually, according to the World Trade Organization, only exacerbates the challenges – making it that much more difficult to control transportation costs in the most efficient and effective manner possible.
LSPs step up to the plate with omni-modal TMS
The world’s LSPs face their own set of transportation challenges. With most of their customers relying on multiple shipping methods, these organizations require an omni-modal approach to transportation management. It’s the LSPs’ responsibility to introduce other modes that achieve the same goal, either in a more cost-effective fashion (which is usually the customer’s primary focus) or in a way that allows them to better meet their service requirements.
Consider, for example, the shipper-customer that wants to provide 24-hour product delivery windows across all U.S. markets. While this scenario may appear to be more costly than traditional shipping windows, the reality is that the increased business levels associated with such a commitment can effectively offset any shipping-related revenue losses. When you have complete visibility over the rates and shipping options, you can help your customers make those types of smart tradeoffs.
A TMS that effortlessly tackles omni-modal challenges
As the transportation landscape has become increasingly complex, the need for a holistic technology platform that can handle a myriad different modes and business models has grown exponentially. Manual systems, spreadsheet-based processes, and disparate technology no longer suffice. In lieu of these traditional, ineffective approaches, both importers and exporters are turning to single-platform TMS that can effortlessly handle international multi-leg freight shipments using all modes.
As more companies conduct business globally, and as more customers demand a wider array of shipping and receiving options, the need for omni-modal transportation systems has become imperative. For example, many industries now depend on ocean and air freight as natural and vital links in their supply chains. Industries such as apparel and automotive keep the ocean carriers humming, while pharmaceuticals and high-tech keep the air freight industry busy.
But ocean and air freight differ from truck freight in several ways. Take the scheduled nature of the freight movements, for example. When shippers are considering which carriers to use, traditional decision points like cost and capacity alone are insufficient. Sailing schedules and flight schedules need to be integrated into the TMS, for example, to enable logistics practitioners to make informed decisions.
The list of challenges that shippers face in today’s omni-modal transportation world doesn’t end there. Also impacting companies’ ability to effectively streamline and optimize their transportation networks are the many disparate or “silo’ed” systems that have been cobbled together over the years. Such systems require extensive (and often unattainable) levels of integration in order to operate interdependently.
The omni-modal TMS’ secret sauce: clear visibility
When you can’t look across all of your modes – including small package, less-than-truckload (LTL), truckload (TL), and others, you miss out on possible freight savings by not consolidating or optimizing those freight movements. In the absence of an omni-modal TMS, supply chain visibility is virtually inaccessible – particularly when companies lack the dashboards needed to properly oversee their end-to-end transportation networks. Finally, contingency planning is next to impossible – a point that can severely impact the way in which companies react and respond to network risk and variability.
A TMS platform with visibility across all transportation modes and the ability to identify potential for savings, optimization, and consolidation, addresses all of these challenges. Such platforms also help shippers build out partial shipments, move between modes (based on efficiency and cost, for example), and truly determine optimum ship modes – both from a cost and service time perspective.
Jim Geer is VP Solutions at MercuryGate, where he brings over 30 years of transportation and network technology experience. He knows the transportation industry from the ground up, managing several transportation companies, then developing software for the industry. Jim parlayed this unique experience into a successful career implementing transportation management. Jim has been with MercuryGate for over 5 years, holding various roles, with an emphasis on solution design and implementation. Prior to joining MercuryGate, Jim was with Infor Global Solutions as a Senior Business Consultant responsible for sales and implementations. Prior to Infor, Jim was Director of Clients Services for ShipLogix.