TMS – Lethal Weapon in the War on Transportation Costs

DC Velocity magazine performed their annual Outlook survey polling shippers on their spending plans for the year.  And while the editorial they produced with the data, “Keeping costs under control key focus for 2013“, didn’t exactly set out to focus on transportation management systems (TMS), it may as well have been entitled, “Why Shippers Need a TMS”.   Twenty percent of survey respondents plan to purchase a TMS system this year.  However, many of the eye-popping statistics produced by the survey underscore the strengths of a TMS, even if respondents didn’t necessarily make the correlation.  DC Velocity Survey Results

For example, asked how they planned to control costs for 2013, 42% of respondents said they intend to consolidate more loads into truckload shipments.  36% plan to renegotiate rates with carriers.  31% said they’d be automating work processes and 26% identified the need for more inbound freight control.   There is no better means for consolidating freight and automating transportation processes than a TMS.  Moreover, managing inbound freight is also best accomplished using a TMS.  As for renegotiating rates with carriers, a TMS plays a critical role in helping supply chain management maintain up-to-the-minute control over rates, ensuring that as newly negotiated rates are inked with carriers, they are being uniformly applied across the entire transportation network.

Overall 40% of respondents said they intend to spend more on transportation across all modes and 67% identified LTL service as their predominant mode choice.  With this level of spend – and the potential for savings and efficiencies that come with a successful TMS implementation – it’s clear that shippers may not fully realize the extent to which a TMS solution can help win the war on transportation costs.

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