Logistics remains fragmented and broken, and nearly every participant in the ecosystem is struggling. Cross-border freight with Mexico is a $70.3 billion market, but ongoing strains from shipping delays, looming driver shortages, and fluctuating consumer prices have exposed the fragility of our global supply chains – making the need for industry-wide transformation more urgent than ever.
With shippers paying more for logistics and service level requirements on the rise, it’s clear that sustainable and efficient transportation management is a must-have for businesses of all sizes, everywhere. Transportation Management Systems (TMS) or Managed Transportation Services (MTS) can help the industry get there with improvements in planning, procurement, execution and optimization for delivering goods. The TMS market is poised to grow 60% by 2024, and shippers today have an incredible opportunity to start planning and integrating now.
In order to make the most of their transportation management and ensure long-term success, shippers can take the following four steps:
1. Choose the right logistics partner for a shared vision
With so many logistics partners to choose from, shippers must make the right choice for their business, investing in the right resources and allotting adequate time to select a trusted partner. Shippers should do their research on the provider’s operational system, examining their regulations, teams, and more to better understand the company’s mission and values. From a more technical perspective, it is also helpful to look into the partner’s connectivity points to ensure secure and reliable information flow between TMS and other solutions.
Staying aligned on vision is crucial for building a strong, long-lasting partnership. Important decisions that can simplify routes, automate operations, improve supply chain visibility, or increase customer value should map back to a shared set of goals and expectations. This alignment will ensure a seamless integration with the logistics partner and a thriving, resilient relationship.
2. Implement a clearly defined operational framework
In order to keep all parties on track with the same vision, it’s important to create a contractual agreement with clear conditions outlined. This helps guide the partnership’s decisions moving forward, including scope, fees, service and clearly defined KPIs. Establishing this operational framework from the jump will provide flexibility for operational adjustments over the life of the contract, help the shipper and logistics partner strike a balance between service and savings, and create an environment that fosters ongoing improvement.
3. Establish a holistic integration strategy
Shippers will need to establish a holistic integration strategy that involves all subject matter experts and project managers throughout the process. Those with hands-on experience will be invaluable for reaching effective agreements and building successful teams to meet KPIs.
In addition, clear and transparent communication around business rules, financial requirements, and technical data will help ensure that current and future execution is seamless. Shippers should clearly map out their supply chain and be deliberate in delegating touchpoints to various stakeholders, while carriers should establish an inclusive implementation process to maintain partnerships with incumbents.
Lastly, TMS and MTS training should involve every player in the shipper’s supply chain – key users, vendors, carriers, and more – to lock in successful adoption both in the early days and down the line. Armed with a deep bench of expertise throughout the shipper organization, logistics partners can beat the learning curve to ultimately boost the project’s success.
4. Lay the groundwork for a successful long-term partnership
In order to extend the life of the partnership for more efficient transportation planning and execution, it’s important for shippers to maintain a steady stream of communication and constant feedback loop. By scheduling monthly and quarterly meetings, shippers and their logistics partners can keep a close pulse on project updates and results – and ultimately catalyze the evolution of the relationship.
Leading these conversations with honesty and constructive feedback will be key to ensure both parties identify opportunities and challenges across processes, teams and systems. In doing so, shippers and their logistics partners can continue to learn from each other and overcome supply chain challenges together in the near and long-term alike.
As global shippers continue to navigate a volatile market, these recommendations will be the keys to unlocking long-term partnerships with their logistics partners, delivering better customer service and satisfaction, and ultimately fueling more success for the industry ahead.
Carlos Godinez, VP of Sales and Marketing, Mexico, Uber Freight.