Tom Cook has authored nineteen books on global trade and supply chain. The June issue of American Shipper magazine published an article by Cook on developing sustainable relationships which this blogger found to be compelling because most of the advice his piece provides can be realized via the use of good, cloud-based TMS software. So with a hat tip to Mr. Cook, here are some of the steps he recommends for building effective relationships with your logistics partners – carriers, vendors, customers, etc. – viewed through the prism of cloud-based TMS use and utilization.
Better Working Relationships between Shippers, Service Providers and Carriers
As in any relationship, communication is the key to happiness. A good cloud-based TMS provides universal communications and collaborative capabilities. Look for TMS solutions that offer integrated online portals for all users to access order, shipment status and other critical information providing a centralized repository for real-time views into inbound and outbound freight. Also, seek a solution offering the widest array of communications protocols including web, email, telematics, EDI and other tracking tools like MacroPoint, FourKites and others. The best cloud-based TMS tools even offer proprietary mobile apps for improved communications with common carriers, private and dedicated fleet resources, shippers and receivers.
Longer Tenured Relationships
Cook says, “Changing service providers and carriers frequently is disruptive and costly and never a preferred option. Everyone engaged in the supply chain does better in long-term relationships.” The most effective TMS solutions support consistency in numerous ways such as improving carrier management and providing accurate pickup/delivery scheduling between shippers, vendors and customers.
Consistency in Pricing and Service Agreements
Building a routing guide with contracted carrier rates on file in a TMS eliminates the need to constantly be seeking the best rates in the best lanes. It helps minimize the premiums associated with the spot market and reserves spot bidding activity for only when there is no better alternative. This makes planning the landed cost of freight movements more predictable and stable over time.
Less “Angst” in “Day-to-Day” Business Dealings
“Angst causes stress. Angst causes anger. Anger causes bad decisions. Bad decisions usually produce bad results” says Cook. Nothing makes transportation managers more unsettled than the unknown. Cloud-based TMS solutions are designed to eliminate the unknown, providing visibility into all facets of transportation management from carrier performance to fuel and assessorial charges to yard/dock-door performance and a host of other data points. Knowing what’s up with your freight means far less anxiety over operations and far fewer instances of poor decision-making.
Transparency – Being Open and Honest Consistently – Valuing Favored Incumbents
These three items from Cook’s piece all speak to the same capability delivered in spades by a cloud-based TMS. The best solutions provide online portals for all the groups involved in freight movements – the shipper, the shipper’s customers and vendors, as well as the carriers. These portals provide real time information derived from a central pool of managed data. With this transparency and the collaborative environment such transparency fosters, the shippers are able to be frank with all constituencies. Best in class solutions enable carriers to monitor their own performance with respect to key metrics like on-time delivery and others leaving no question about their relative value to the shipping organization. Shippers can then award greater volume to the best performing carriers and incentivize others to improve their competitive offerings. This level of transparency makes it easy to have frank conversations with all the involved partners and helps to avoid distrust and friction. In the end, all participating parties are able to make clear-eyed assessments about the value each brings to a transportation program.
It is beyond dispute that a solid cloud-based TMS is a perfect solution to the challenge of developing sustainable relationships across the entirety of the logistics portion of the supply chain.