Why is Freight Management Important? Freight Management FAQS

Why Freight Management Is Important Freight Management Faqs

Without proper freight management, most businesses would go out of business rather quickly. Here is a comprehensive list of the most common questions we come across regarding freight management.

Freight Management FAQ

Question: What is freight management?

Answer: Freight management is the procedure of efficiently and also tactically moving freight throughout a network from its point of origin to its desired location, making use of different methods of transportation, intermediaries, as well as technologies. The procedure employs logistics and also supply chain knowledge, physical properties such as trucks, warehouses as well as stockrooms, and technology to move freight effectively and affordably.

Question: What methods of transportation do freight managers utilize?

Answer: Freight managers ship cargo by air, rail, roadway, as well as water. Combinations of these methods typically referred to as intermodal transportation, are also used to provide ideal logistics as well as delivery solutions. Within the United States, commercial trucks deliver approximately 70% of all freight.

Question: Why has freight management become such a vital element of business?

Answer: The capacity to supply freight promptly to the best location, in the ideal quantity, damage-free, and at the most affordable feasible price, has been critically essential to services. In today’s competitive atmosphere, this has become more important than ever as a result of aspects such as leaner shipper stocks, just-in-time manufacturing, increasing warehousing and labor costs, tighter delivery windows, and also customer expectation driven by eCommerce.

Question: How are freight management and logistics management different?

Answer: Many people, specifically those that are not a component of the Supply Chain, will undoubtedly consider the terminologies Freight Management and Logistics Management to be equivalent. Nevertheless, we believe the meanings of each terminology show that there is a crystal clear difference. Logistics Management is a more overarching, all-inclusive terminology.

The range of Logistics Management tasks is vast and can deal with a lot of functions. However, it is comprehensive of Freight or Transportation Management. Freight Management is, therefore, a subset of Logistics Management. Without Freight Management, and all of the individuals that make it happen, Logistics Management cannot function and fulfill its goals.

Question: What are the various road transportation alternatives?

Answer: Ground transportation comes in numerous varieties, but typical options for carriers are full truckload (TL or sometimes FL), less-than-truckload (LTL), and parcel. In TL transportation, a shipment fills up an entire semi-truck trailer.

In contrast, LTL shipments just partially load a semi-trailer and also can be combined with other various other appropriate freight to compose a full load. Parcel describes the transportation of tiny as well as mid-size package units. Each option needs a different freight management strategy.

Question: Visibility is a typical supply chain term. What is it?

Answer: Supply chain visibility is essentially the capacity to track the condition and place of parts, parts, and also items as they relocate from origin to destination. It’s tough to overstate the relevance of supply chain visibility. It establishes superb customer support and also allows companies to drive cost out of supply chains by, for instance, preparing for and also avoiding functional disruptions.

Question: What are the various freight management options through truck?

Answer: The three main freight management choices by truck are: private carriage, common carriage, as well as devoted agreement carriage. Shippers that pick private carriage elect to handle their very own vehicles and also drivers. Multiple third-party trucking carriers move common carriage freight on an as-needed and even transactional basis. Dedicated contract carriage (DCC), a significantly preferred approach, offers the same deal with capacity and control as the personal carriage.

Yet, carriers fully contract out the operation and management of their fleet to a third-party logistics carrier (3PL) or lead logistics carriers (LLP). In the circumstances of DCC, the 3PL runs and keeps the truck fleet, employs as well as handles the drivers, as well as ensures the safe, on-time delivery following the carrier’s requirements.

Question: Transparency is a commonly used supply chain term. Is it like visibility?

Answer: While visibility covers the surveillance of supply chains, transparency describes just how companies share their freight information with other companies in the supply chain such as suppliers, trucking carriers, 3PLs, vendors, freight brokers, freight forwarders, and even clients themselves. The principle of transparency within the supply chain ensures the smooth, effective hand-offs as well as shared knowledge of everyone functioning within a logistics network.

Transparency has come to be specifically essential in consumer-facing markets such as retail, CPG, or food, where shipping has become ever before more complex, and customers are demanding more information right into the products they purchase. The development of fads like blockchain is definite proof of a stronger desire for transparency.

Question: How can a carrier keep high levels of visibility as well as transparency?

Answer: Modern technology is an essential piece of visibility, as well as the transparency puzzle. 3PLs and LLPs use tools such as transportation management systems to track and also trace the activity of freight and disseminate this information to authorized parties as swiftly as feasible. Leading 3PLs and LLPs also use advanced tools such as artificial intelligence to find anomalies in freight networks and also inform carriers of potential interruptions or hold-ups.

Question: Exactly how is the Internet of Things innovation used in freight management?

Answer: Internet of Things (IoT) is the term used to explain modern technology that attaches day-to-day challenge the internet using picking up devices. Products and also components moving through supply chains, as well as assets such as trucks, can be tracked utilizing IoT-based noticing systems. These systems offer businesses real-time or near real-time location data and also condition updates such as the temperature of loads.

Question: What is a transportation management system (TMS)?

Answer: A transportation management system (TMS) is a system for managing freight and also freight flows. One of the essential devices in the logistics tool kit, TMS technology, has evolved swiftly over the last years. Modern systems sustain day-to-day freight operations as well as strategic decision-making through innovative analytics.

Question: What are spot market rates in trucking?

Answer: Spot market rates are one-off rates priced estimate by truck carriers to carry a specific load or loads. Unlike agreement freight rates, which are fixed according to a pre-negotiated agreement between shipper and carrier, spot market rates vary. Making use of the spot market to relocate freight is usually the more expensive option. Keeping comprehensive transmitting overviews is one way to decrease a shipper’s dependence right away market.

Question: What is a routing guide?

Answer: A routing guide is a guide to which carrier or carriers a business picks to move its freight. Routing guides have been available in numerous forms but usually consist of favored carriers that align with the shipper’s logistics requirements.

Question: What are accessorials?

Answer: Freight accessorial costs are costs sustained outside of regular load pickup and delivery tasks. Instances include charges for packing or unloading freight or a fee imposed by a carrier for unplanned hold-ups at a loading dock. These extra costs can considerably pump up logistics costs.

Question: How can a freight management companion save time and money for carrier customers?

Answer: There are various ways in which freight management companions provide considerable time and rate savings. For example, leading 3PLs help shippers to work out the most competitive freight rates to decrease the likelihood of pricey supply chain disturbances, and to make sure that freight networks run to maximum efficiency.

Question: What are preferred carriers?

Answer: Trucking companies typically favor to do company with firms that are effective, monetarily sound, and highly joint, generally called preferred shippers. The award equates right into a more competitive advantage.

For example, a recommended carrier is more likely to find carriers to haul its freight during durations when hauling ability is in short supply. There are various methods to become a preferred shipper; one is to keep loading/unloading delays to a minimum.

Question: What should I seek when picking a freight management partner?

Answer: It is critically vital that shippers pick a freight management companion that has the ideal degree of logistics knowledge and also is compatible both culturally and organizationally. Listed below are some noteworthy warnings:

  • Does the 3PL have a lengthy and productive performance history of managing various kinds of freight?
  • How receptive is the 3PL to market adjustments and fads as well as supply chain interruptions?
  • What sources does the 3PL offer in regards to framework, technology, and employees?
  • Does the 3PL have solid visibility in numerous markets? Cross-industry proficiency is essential in today’s extremely competitive logistics market.
  • Is the 3PL an innovator in regards to the logistics solutions it has executed and also the innovation it deploys?
  • Can the 3PL program stay ahead of the technology curve?
  • Is the 3PL economically sound as well as well-insured?
  • Does the 3PL have a strong track record as well as a brand name in the market?

As one of the top 3rd party logistics providers (3PL), Fleet Concepts’ team draws upon half a century of experience, aiding market-leading shippers to succeed with safe, on-time, as well as effective deliveries. Our freight management specialists create customized freight management solutions to meet the particular demands of your business, whether that is improving service levels, driving down costs, boosting functional efficiency or only driving improvements, or some mix of these usual requirements.