Key insights for supply chain leaders
Transportation management is the backbone of shipping operations. It ensures shippers have the most efficient tactics and tools in place to achieve optimal performance and their desired business outcomes.
But what does successful transportation management look like? The past few years have taught us that the most effective way to navigate supply chain volatility is to develop a dynamic, proactive strategy that augments the most vital elements powering our transportation operations. A productive transportation management strategy will drive business success at any given time, no matter the state of the market.
Routing guides, contingency planning, cost visibility, and reliable capacity are some of the key elements that are top of mind for shippers. This guide explores how to navigate these factors effectively and evolve your transportation management strategy.
Carefully planned routing guides drive shipper success
Contingency planning accounts for supply
chain risks
Improve cost visibility through analysis
Reliable capacity comes from building carrier relationships
Routing guides are
essential to manage complex supply chains
Revisit my strategy
Carefully planned routing guides drive shipper success
Routing guides are essential to manage complex supply chains. They establish rules for everything from selecting the right carriers and shipment modes to intentional cost management. But building a strategic, comprehensive guide can get pretty complicated. Should you structure your guide from geographical region to geographical region? How are your lanes configured? Should you use one primary carrier or split your volume between multiple carriers?
Analytics and freight industry knowledge play a major role in ensuring your guide will achieve the best results for your business and customers. Leveraging analytics will help you determine whether your current guide is producing the best rates and service, or whether it needs structural change.
Shippers and their logistics providers should closely monitor freight and how the routing guides are performing against plan. Tracking the percent of freight moving via routing guides, versus other methods such as through the spot market, are critical data points you can use to adjust strategies based on your goals.
Key actions:
1. Consistently analyze market data to
inform routing guide design changes.
Leveraging up-to-date insights will help
you secure the best rates, pinpoint and
improve non-pricing factors that increase
tender acceptance rates, and benchmark
carrier performance.
2. Align with key stakeholders on your
network needs and where you’re willing to
invest. Consider network needs such as
on-time service, capacity gaps, and
automatic load tendering.
Uber Freight’s guide to transportation management:
What are my risk scenarios?
Start by understanding
the risks and potential hazards in your network
Contingency planning accounts
for supply chain risks
Key actions:
A global pandemic, natural disasters, and other industry disruptions are a few reasons why contingency planning is a priority. A comprehensive plan starts with understanding the risks and potential hazards in your network and having foresight into what’s happening in the freight industry.
Say you have a high shipping density in Florida. It would be wise to develop plans to protect your freight during hurricane season, considering everything from potential road and port closures to warehouse flooding. A contingency plan helps shippers adapt to potentially hazardous future scenarios.
Examine how scenarios like these may impact your business, and create a plan to work around those hurdles. If you regularly work with a shipping partner whose employees could potentially go on strike during contract renegotiations, having a plan that lets you easily transition to alternative shipping partners could help you avoid delays and uncertainty.
1. Be proactive when building a contingency
plan. These should account for historical
challenges such as natural disasters or
public health crises that could impact
your business.
2. Develop “levers” to pull in specific risk
scenarios and establish monitoring
mechanisms to react to network hazards
quickly.
Am I overpaying?
Saving on transportation costs is a priority
Improve cost visibility
through analysis
Key actions:
Saving on transportation costs is a priority. Some companies only have full visibility into their topline costs, such as how much they pay for transportation annually or cost per shipment.
Breaking out and assessing your cost components is key to proactive management. Conducting analyses around line haul, fuel, asset utilization, and accessorial costs will give you data that you can benchmark against peers and competitors—helping you determine whether your rates align with what the market is bearing, or if you’re overpaying.
You can perform analyses at the carrier level, lane level, or based on certain facilities and geographies to determine if you’re overspending or underspending, and use that information to make productive cost decisions. For an even more in-depth understanding, loss analysis approaches—such as zero based loss—provide a complete view of where costs are less than optimal.
1. Identify your most important cost
components, such as line haul and fuel,
to understand where to make
adjustments.
2. Conduct expense auditing to get a more
granular view of your transportation
invoices.
3. Consider third-party TMS options that
provide cost visibility at the shipment
level.
Learn more
The current
transportation market favors shippers
Reliable capacity comes from building carrier relationships
Key actions:
Like any market, transportation is cyclical. Sometimes it’s in the shipper’s favor and other times it’s in the carrier’s favor. No matter what state we’re in today, it will change eventually.
To achieve consistently reliable capacity, building relationships with your core carrier base is crucial. If you establish consistent carrier relationships, your rates won’t be as impacted through market shifts. You’ll have stability that allows you to budget internally and adjust to capacity crunches.
Overall, relying on committed carrier capacity (built on good carrier relationships and consistent volume) will keep your business insulated from the effects of future market volatility.
1. To keep up with market disruption, make
sure you seek carriers that can give you
access to different types of capacity in
your network—from dedicated and full
truckload to LTL and expedited.
2. Opt for a dedicated fleet to transport
important freight that needs to be
delivered on time during capacity
crunches or freight that requires a high
level of service.
A clear picture of your data across all elements of transportation management, from costs to capacity, will set the foundation to improve your strategy. Knowing how the market could change—and how that will impact your business—is critical to building a proactive transportation management plan that will help you succeed in an ever-changing market.
How else can I enhance my transportation management strategy?
How else can I enhance my transportation management strategy?
On-time service
Transporting goods on time is a top priority for shippers as customer delivery expectations reach
all-time highs. Conducting a performance assessment will help you measure how your freight is performing from an on-time perspective, and determine the root causes of delays and how to solve those issues. Analysis and improvement of service becomes even more critical when customers impose penalties (such as retailer fines or charge backs for production downtime).
Sustainability
Reducing fleet emissions and making transportation more eco-friendly overall is a goal across industries. Load consolidation and conversion from over-the-road to intermodal are tangible ways to be sustainable now, while using alternative fuels and electric trucks are solutions that could be prominent in the near future. Educate your business about what sustainable transportation looks like and identify areas where you can reduce your carbon footprint.
Uber Freight is here to help. Connect with our Managed Transportation experts to get started.
Carefully planned routing guides drive shipper success
Routing guides are essential to manage complex supply chains. They establish rules for everything from selecting the right carriers and shipment modes to intentional cost management. But building a strategic, comprehensive guide can get pretty complicated. Should you structure your guide from geographical region to geographical region? How are your lanes configured? Should you use one primary carrier or split your volume between multiple carriers?
Analytics and freight industry knowledge play a major role in ensuring your guide will achieve the best results for your business and customers. Leveraging analytics will help you determine whether your current guide is producing the best rates and service, or whether it needs structural change.
Shippers and their logistics providers should closely monitor freight and how the routing guides are performing against plan. Tracking the percent of freight moving via routing guides, versus other methods such as through the spot market, are critical data points you can use to adjust strategies based on your goals.
Key actions:
1. Consistently analyze market data to inform routing guide design changes. Leveraging up-to-date insights will help you secure the best rates, pinpoint and improve non-pricing factors that increase tender acceptance rates, and benchmark carrier performance.
2. Align with key stakeholders on your network needs and where you’re willing to invest. Consider network needs such as on-time service, capacity gaps, and automatic load tendering.
Contingency planning accounts for
supply chain risks
A global pandemic, natural disasters, and other industry disruptions are a few reasons why contingency planning is a priority. A comprehensive plan starts with understanding the risks and potential hazards in your network and having foresight into what’s happening in the freight industry.
Say you have a high shipping density in Florida. It would be wise to develop plans to protect your freight during hurricane season, considering everything from potential road and port closures to warehouse flooding. A contingency plan helps shippers adapt to potentially hazardous future scenarios.
Examine how these scenarios may impact your business, and create a plan to work around those hurdles. If you regularly work with a shipping partner whose employees could potentially go on strike during contract renegotiations, having a plan that lets you easily transition to alternative shipping partners could help you avoid delays and uncertainty.
1. Be proactive when building a contingency plan. These should account for historical challenges such as natural disasters or public health crises that could impact your business.
2. Develop “levers” to pull in specific risk scenarios and establish monitoring mechanisms to react to network hazards quickly.
Key actions:
Saving on transportation costs is a priority. Some companies only have full visibility into their topline costs, such as how much they pay for transportation annually or cost per shipment.
Breaking out and assessing your cost components is key to proactive management. Conducting analyses around line haul, fuel, and accessorial costs will give you data that you can benchmark against peers and competitors—helping you determine whether your rates align with what the market is bearing, or if you’re overpaying.
You can perform analyses at the carrier level, lane level, or based on certain facilities and geographies to determine if you’re overspending or underspending, and use that information to make productive cost decisions. For an even more in-depth understanding, loss analysis approaches—such as zero based loss—provide a complete view of where costs are less than optimal.
Improve cost visibility through analysis
1. Identify your most important cost components, such as line haul and fuel, to understand where to make adjustments.
2. Conduct expense auditing to get a more granular view of your transportation invoices.
3. Consider third-party TMS options that provide cost visibility at the shipment level.
Key actions:
Like any market, transportation is cyclical. Sometimes it’s in the shipper’s favor and other times it’s in the carrier’s favor. No matter what state we’re in today, it will change eventually.
To achieve consistently reliable capacity, building relationships with your core carrier base is crucial. If you establish consistent carrier relationships, your rates won’t be as impacted through market shifts. You’ll have stability that allows you to budget internally and adjust to capacity crunches.
Overall, relying on committed carrier capacity (built on good carrier relationships and consistent volume) will keep your business insulated from the effects of future market volatility.
Reliable capacity comes from building carrier relationships
1. To keep up with market disruption, make sure you seek carriers that can give you access to different types of capacity in your network—from dedicated and full truckload to LTL and expedited.
2. Opt for a dedicated fleet to transport important freight that needs to be delivered on time during capacity crunches.
Key actions:
How else can I enhance my transportation management strategy?
On-time service
Transporting goods on time is a top priority for shippers as customer delivery expectations reach all-time highs. Conducting a performance assessment will help you measure how your freight is performing from an on-time perspective, and determine the root causes of delays and how to solve those issues. Analysis and improvement of service becomes even more critical when shippers are supplying retailers that impose fine programs.
Sustainability
Reducing fleet emissions and making transportation more eco-friendly overall is a goal across industries. Load consolidation and conversion from over-the-road to intermodal are tangible ways to be sustainable now, while using alternative fuels and electric trucks are solutions that could be prominent in the near future. Educate your business about what sustainable transportation looks like and identify areas where you can reduce your carbon footprint.
A clear picture of your data across all elements of transportation management, from costs to capacity, will set the foundation to improve your strategy. Knowing how the market could change—and how that will impact your business—is critical to building a proactive transportation management plan that will help you succeed in an ever-changing market.
Uber Freight is here to help. Connect with our Managed Transportation experts to get started.
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