Historically, shippers and third-party logistics providers (3PLs) that operate private fleets have divided their transportation and fleet management between two or more software systems. The same is true for motor carriers with brokerage arms. While one system is used for load planning and execution for shipments tendered to third party carriers the other is used to manage fleet operations.
Asset and non-asset transportation each have specialized information needs, but using separate systems includes drawbacks for the combined entity. First and foremost is the lack of a single view and ability to plan and optimize the entire network. Separate systems also prevents consistency in the load tendering process. When separate systems are used, load planning tends to be pre-arranged and statically executed in this manner: all loads in lanes A to M are tendered to third party carriers and all loads in the remaining lanes N to Z go to the private fleet.
When tendering loads, shippers and 3PLs must consider factors such as safety ratings, insurance coverages, operating authorities and certifications of motor carriers. Fleet management shares these concerns but must also consider a variety of unique operational factors in the load acceptance process.
A single, integrated TMS for both asset and non-asset transportation services could benefit 3PLs by providing a ready-made platform for extending customer relationships beyond freight brokerage. A 3PL could manage its own fleet of independent contractors or company drivers and equipment to increase capacity and customer service.
Another possible service offering for 3PLs is to use the platform to take over management of a customer’s private fleet. In addition, shippers and 3PLs stand to gain by increasing efficiencies and operational consistency from managing asset and non-asset transportation functions in a single TMS platform.
Here are the top 5 ways that shippers and 3PLs benefit from using an integrated TMS with fleet management for asset and non-asset transportation management:
- Gain visibility to Compliance, Safety, Accountability (CSA) scores for each driver to proactively manage fleet safety ratings. Drivers who negatively impact a fleet’s CSA scores would be identified from roadside inspection data and violations entered manually as well as upload from the Federal Motor Carrier Safety Administration’s web portal.
- Instantly access equipment details on weight, dimensions, door types, fuel economy, components and more within the load planning process. The information is also useful for managing uptime and operating costs, with real-time data from telematics devices keeping records current for mileages, hours and other activities.
- Centralize visibility, optimization, and control for all drivers, assets, and third-party capacity in the system. All load planning and dispatch functions are performed from one screen within a few clicks, such as sending e-mails to request rate quotes, comparing rates, and dispatching loads.
- Keep master files up-to-date with pertinent information and documents on drivers, with monitoring tools to alert managers for any issues related to safety and compliance.
- Capture the most current pay structure in the driver master files (percentage of revenue, mileage, etc.) for each driver, with the ability to export operational details to financial systems for processing driver payroll and settlements.
As TMS systems continue to bring together functionalities for asset and non-asset transportation management, additional tools will be added to the value equation, such as load optimizers that simultaneously consider the needs of both entities to automate the load tendering and acceptance process.
Todd Bucher is Vice President of Fleet Management at MercuryGate.