04 Feb

What is Managed Transportation?

Managed transportation helps businesses optimize their shipping operations, reduce costs, and improve efficiency. In this guide, we’ll explore what managed transportation is, how it works, and the benefits it can bring to your shipping process. Whether you're a small business owner or looking to streamline vehicle shipments, this article will provide practical insights to help you make informed decisions and save money on logistics.

What is Managed Transportation? Definition and Importance

Managed transportation refers to the process of outsourcing the management and coordination of a company's transportation needs to a third-party provider. This service involves handling all aspects of transportation, including planning, routing, tracking, and optimization, with the goal of making the shipping process more efficient and cost-effective.

For example, let’s say you're looking to ship a car from the U.S. to your location, and the process seems a bit overwhelming. Managed transportation services take that burden off your shoulders. The provider works with carriers, brokers, and logistics companies to find the most affordable and reliable shipping options for you. This can include handling paperwork, selecting the right routes, and negotiating better rates.

The importance of managed transportation lies in its ability to save you both time and money. Instead of spending hours researching and arranging shipments, a managed transportation service does the heavy lifting for you. They have expertise in optimizing transportation routes, which can help reduce unnecessary costs, such as fuel surcharges or inefficient routes.

For people on a tight budget, like those trying to save money on car shipping, managed transportation can help by:

  1. Streamlining processes – You avoid the hassle of dealing with multiple companies or trying to track shipments yourself.
  2. Reducing costs – Managed transportation providers often have access to better rates through their network of carriers.
  3. Improving reliability – By leveraging the provider’s expertise, you're more likely to experience timely deliveries without unexpected delays.

How Managed Transportation Services Work: Key Components

Managed transportation services are designed to simplify the shipping process by handling key tasks that are essential for moving goods efficiently. The core components that make this service work effectively include Transportation Management Systems (TMS), route planning, and carrier management.

  1. Transportation Management System (TMS)
    A TMS is a software platform that acts as the brain behind managed transportation services. It helps track shipments, optimize routes, and monitor costs. With TMS, a transportation provider can plan the most efficient way to move a vehicle or product, taking into account factors like traffic, road conditions, and fuel costs. For instance, when shipping a car, the TMS can instantly compare routes to determine which one offers the best combination of cost and speed. For budget-conscious customers, this is especially valuable as it minimizes unnecessary expenses and helps keep the transportation process on track.

  2. Route Planning
    Route planning is another critical aspect of managed transportation. By using the data collected in the TMS, transportation providers can create the most efficient route for the shipment. This is not just about getting from point A to point B – it’s about considering all factors that impact delivery time and cost, such as road closures, weather conditions, or the availability of fuel. For example, when shipping a car from the U.S. to a destination overseas, careful route planning can ensure that the car isn’t stuck on unnecessary detours or delays, saving you time and reducing the cost of the shipment.

  3. Carrier Management
    Managed transportation services also include carrier management, which involves selecting and working with the right carriers (the companies that physically move the cars). The provider ensures that carriers meet certain standards, like reliability and cost-effectiveness, to make sure that the shipment is both timely and affordable. By working with a variety of carriers, the managed transportation provider can also offer flexibility in choosing the most cost-effective option based on your specific needs, whether it's a full container or an open transport.

Benefits of Managed Transportation: Cost Savings and Operational Efficiency

Managed transportation services offer significant benefits, particularly when it comes to cost savings and operational efficiency. These advantages are especially valuable for individuals or businesses on a tight budget, like those looking to save money on car shipping.

  1. Cost Savings
    One of the biggest benefits of managed transportation is the potential for significant cost savings. By outsourcing transportation management to experts, you tap into their established networks, allowing you to access lower rates than if you were to negotiate directly with carriers. Managed transportation providers have the expertise to optimize routes and select the best shipping methods, helping avoid expensive detours, delays, and extra charges.

    For example, when shipping a car, managed transportation services can select the most cost-effective carrier based on the size of the shipment and the specific route, helping you avoid paying more than necessary. Additionally, these services often have long-term relationships with carriers and brokers, which means they can negotiate bulk rates, saving you even more money.

    The ability to consolidate shipments with other customers can also lead to savings, as it reduces costs related to empty miles or inefficient deliveries. This type of "shared" shipping, also known as group shipping, makes it possible to reduce individual shipment costs, which is a huge advantage for someone looking to save on vehicle delivery.

  2. Operational Efficiency
    Managed transportation services help streamline your shipping operations, resulting in improved efficiency. Handling transportation logistics in-house can be time-consuming and complex, especially when coordinating multiple shipments or managing different carriers. By outsourcing these tasks, you free up time to focus on other aspects of your business or personal needs.

    The use of a Transportation Management System (TMS) allows for real-time tracking and reporting, meaning you can keep tabs on your shipment’s progress at all times. This system also helps in identifying potential problems, such as delays or route inefficiencies, before they become costly issues. For instance, if a car shipment is delayed, the TMS can immediately notify the provider to adjust the route or offer alternative solutions to prevent further delays.

    Furthermore, managed transportation services help reduce administrative tasks. Instead of dealing with multiple invoices, contracts, and schedules, the provider handles the majority of these processes. This reduces the potential for errors and ensures that your shipments are always on track, allowing for smoother operations overall.

What is a Transportation Management System (TMS)? Features and Benefits of TMS Platforms

A Transportation Management System (TMS) is a software platform designed to plan, execute, and optimize the transportation of goods. In simple terms, it’s a tool that helps manage the logistics of moving products, including vehicles, from one place to another. For anyone looking to save on car shipping, a TMS is a crucial part of managed transportation services, helping to streamline the entire process.

Features of a Transportation Management System (TMS)

  1. Route Optimization
    One of the most powerful features of a TMS is its ability to optimize routes. By analyzing traffic patterns, weather conditions, and distance, it can suggest the quickest and most cost-effective route for a shipment. This is especially useful for saving money when shipping cars, as it reduces unnecessary miles and ensures that deliveries stay on schedule.

  2. Real-Time Tracking and Visibility
    With a TMS, you can track your shipment in real-time. Whether you're shipping a car across the country or to another state, a TMS allows you to know where your vehicle is at all times. This transparency not only provides peace of mind but also helps prevent delays by allowing you to spot any potential issues early on.

  3. Carrier Selection and Management
    A TMS can help you choose the most suitable carrier for your shipment. By storing a database of reliable carriers, the system can match your needs with the best available option based on factors such as price, service quality, and availability. This is particularly helpful for those who are shipping on a budget, as the system can identify the most affordable carrier while maintaining reliable service.

  4. Freight Audit and Payment
    The TMS platform can automatically audit freight invoices, ensuring that the shipping costs are accurate. This helps prevent overcharging and identifies any billing errors. Once verified, the system can also automate payments, saving time and reducing the risk of missed deadlines. For someone managing car shipments, this means fewer headaches when it comes to paying for services.

  5. Reporting and Analytics
    TMS platforms also provide valuable reporting and analytics features. By tracking key performance indicators (KPIs), such as delivery times, carrier performance, and transportation costs, a TMS can offer insights into how well the shipping process is functioning. This helps you identify areas for improvement and make data-driven decisions to further optimize your logistics.

Benefits of TMS Platforms

  1. Cost Savings
    One of the greatest advantages of using a TMS is the ability to reduce shipping costs. The platform’s ability to optimize routes, select the best carriers, and reduce delays directly contributes to minimizing transportation expenses. For those who are shipping vehicles on a budget, this is a major benefit. The system ensures that shipments are cost-effective without sacrificing reliability.

  2. Improved Efficiency
    By automating many aspects of the transportation process, a TMS boosts efficiency. From route planning to payment processing, the system handles tasks that would otherwise require significant manual effort. For example, by automatically selecting the best carrier, the TMS saves you time spent comparing options and negotiating rates. This efficiency also reduces the likelihood of human error, ensuring smoother, more reliable shipping.

  3. Better Customer Experience
    A TMS provides real-time updates and transparency, which enhances the overall customer experience. When shipping cars, customers can track their vehicles in real-time, reducing anxiety about delivery times. Furthermore, with automated notifications for delays or issues, customers are kept in the loop, improving satisfaction and trust.

  4. Scalability
    As your shipping needs grow, a TMS can easily scale to accommodate more shipments, carriers, and routes. Whether you’re shipping one car or dozens, the system can handle increased volumes without sacrificing quality. This scalability ensures that, as your business or shipping requirements expand, you can continue to rely on the same system to manage everything.

Challenges in Implementing Managed Transportation: Integration with Existing Supply Chain Systems

While managed transportation offers many advantages, such as cost savings and operational efficiency, one of the biggest challenges companies face when implementing this service is integration with existing supply chain systems. The seamless integration of a managed transportation system with a company’s current operations is crucial to ensure that the entire logistics process runs smoothly. However, this can be a complex and time-consuming task that requires careful planning and execution.

Why Integration Is Important

The integration of a managed transportation service with your existing supply chain systems ensures that all components of the shipping process work together. For instance, if you're shipping cars from the U.S. to your destination, the system must coordinate with inventory management, order processing, and customer service. When these systems are connected, it leads to smoother workflows, fewer errors, and a more transparent process overall. Without proper integration, your managed transportation service may operate in isolation, making it harder to track shipments, manage costs, and handle customer inquiries efficiently.

Common Challenges in Integration

  1. Data Compatibility Issues
    One of the main hurdles is ensuring that the data formats used by the new transportation system are compatible with those used by your current supply chain software. Many older systems may use legacy formats that are not easily compatible with modern managed transportation systems. This can require extensive data conversion or even the replacement of outdated software, which can be costly and time-consuming.

    For example, if your existing system tracks orders in a specific format, and the managed transportation platform uses a different structure for shipment tracking, it can be challenging to merge this data into one unified system. This can lead to delays, confusion, or errors in reporting, especially when trying to track a car shipment across different platforms.

  2. System Complexity and Training
    Managed transportation platforms, especially those that offer advanced features like route optimization, real-time tracking, and analytics, can be complex to set up and use. Integrating such a system into your existing operations often requires significant training for staff members who are used to working with different software. The learning curve can delay the implementation process and may require ongoing support to ensure that the system is being used correctly.

    For example, employees involved in processing car shipments may need to be trained to use the new system for selecting carriers, tracking vehicles, and handling invoicing. If the integration is not well-managed, it can cause disruptions in the workflow, leading to inefficiencies and potentially higher costs.

  3. Real-Time Data Synchronization
    Another challenge is ensuring that real-time data from both systems sync properly. Managed transportation relies on up-to-date information, such as the location of shipments, fuel costs, and carrier availability, to make quick decisions. If your supply chain systems aren’t providing the most current data or if updates don’t sync properly, the transportation system might make inaccurate recommendations or delays could go unnoticed.

    For instance, when shipping a car, the real-time data from the managed transportation platform must match up with the inventory data in your supply chain system. If these two systems don’t sync properly, the status of the car shipment might not be reflected accurately in your inventory system, leading to confusion or customer dissatisfaction.

  4. Cost of Implementation
    Integrating a managed transportation service with your existing supply chain can be a costly endeavor. You may need to invest in new software, hardware, or even consulting services to ensure the two systems work together effectively. Additionally, the process of data migration, system testing, and staff training can add up quickly, potentially making it a more expensive option in the short term.

    For individuals or businesses working with a limited budget, the upfront costs of implementing a new transportation system can be a significant barrier. While the long-term benefits of managed transportation may outweigh these initial costs, it’s essential to carefully evaluate the return on investment (ROI) and plan for potential hidden costs during the integration process.

  5. Ongoing Maintenance and Updates
    Once the managed transportation system is integrated, ongoing maintenance and updates are necessary to keep everything running smoothly. As technology evolves, updates to both the managed transportation platform and your existing supply chain system will be required. If these updates are not synchronized, they can cause disruptions in service, resulting in inefficiencies or system downtime.

    For example, if your car shipping system requires an update to handle new regulations or features (like electric vehicle tracking), it’s crucial that both systems are updated at the same time to avoid gaps in functionality. This can require coordination between your internal IT team, the transportation provider, and third-party vendors, adding complexity to the process.

Mitigating the Challenges

Despite these challenges, there are ways to ease the integration process:

  • Choosing Compatible Systems: Ensure that the managed transportation system you choose is compatible with your existing supply chain software. Many modern TMS platforms are designed with integration in mind, offering flexible API connections to ease the process.

  • Investing in Staff Training: Providing comprehensive training and support to employees ensures they are well-equipped to handle the new system and minimize disruptions in operations.

  • Phased Implementation: Instead of integrating everything at once, consider a phased approach. Start by integrating key functions, such as shipment tracking, and then gradually expand to include other features like route optimization or carrier management.

  • Consulting with Experts: Partnering with IT consultants or experienced transportation providers can help you avoid common pitfalls. These experts can guide you through the process, ensuring that the systems integrate smoothly and efficiently.

How to Choose a Managed Transportation Provider

Choosing the right managed transportation provider is essential for optimizing your shipping process and ensuring cost-effective, reliable service. Whether you’re shipping a car or managing a larger supply chain, the provider you choose will play a significant role in the success of your transportation efforts. For individuals and businesses with limited budgets, it’s important to make an informed choice to ensure that you get the best value for your money while meeting all of your shipping needs.

Here’s a step-by-step guide on how to choose the right provider for your managed transportation services:

1. Assess Your Shipping Needs

Before selecting a provider, it's crucial to clearly understand your own shipping requirements. Ask yourself the following questions:

  • How frequently will I need transportation services?
  • What is the typical distance for my shipments?
  • Are my shipments small, large, or highly specialized (such as vehicle shipments)?
  • What are my delivery timelines or deadlines?

For example, if you're shipping cars on a budget, your needs might include affordable rates, the ability to track vehicles in real-time, and the flexibility to ship across long distances without unnecessary delays. By clearly identifying your needs, you can focus on providers that offer services tailored to your specific requirements.

2. Evaluate the Provider’s Network and Carrier Relationships

A good managed transportation provider should have a strong network of carriers and service providers. This ensures that they can offer competitive rates and reliable delivery options. Look for a provider who has established relationships with multiple carriers, as this allows for flexibility in choosing the best shipping options for your needs.

For instance, if you're shipping a car to a remote location, a provider with access to a wide range of carriers will be better equipped to find cost-effective shipping solutions. A provider with an extensive network can also offer different shipping methods (e.g., open vs. enclosed transport for cars) depending on your specific requirements.

3. Consider Technology and Automation

The right transportation provider should leverage advanced technology to streamline operations and improve service quality. A key tool to look for is a Transportation Management System (TMS), which can help with route optimization, real-time tracking, and reporting.

  • Route Optimization: A TMS can suggest the most cost-effective and efficient shipping routes.
  • Tracking: Real-time tracking allows you to monitor your shipment (such as a car) at any given moment, reducing anxiety about delays or delivery issues.
  • Automation: Automation can simplify invoicing, carrier selection, and payment processes, reducing manual errors and speeding up operations.

When selecting a provider, inquire about the technology they use and how it will benefit your shipping needs, especially if you’re shipping vehicles and need to ensure timely, efficient delivery.

4. Check for Transparency and Reporting Capabilities

A good managed transportation provider should offer transparent pricing and detailed reporting. Make sure the provider can clearly explain how their pricing structure works and what is included in the service cost. Look for providers that offer freight auditing and detailed reports, as this can help you monitor shipping costs, track performance, and identify potential areas for improvement.

For example, if you're shipping cars frequently, you'll want to track how much you’re spending per shipment, identify cost-saving opportunities, and understand which routes or carriers are the most cost-efficient. Clear and transparent reporting helps you keep your budget in check and make informed decisions moving forward.

5. Understand the Provider’s Customer Support and Service Levels

Customer support is a critical factor in choosing a managed transportation provider. You want a provider that offers excellent customer service and is responsive when issues arise. Whether it’s answering questions about shipment status or resolving problems like delays, a reliable provider will have dedicated customer support teams available to assist you.

For example, if you’re shipping cars on a tight schedule, you need to be able to quickly contact your provider if any unexpected issues arise. Make sure the provider has a solid track record of customer service and that they offer multiple channels of communication (e.g., phone, email, live chat).

6. Compare Pricing and Contract Flexibility

When choosing a managed transportation provider, pricing is an important consideration, especially for those working with a limited budget. Make sure to compare rates among different providers, but be cautious about choosing the cheapest option without considering the quality of service. Look for a provider that offers competitive rates while maintaining high service standards.

In addition, consider the contract flexibility offered by the provider. Some providers may require long-term contracts, while others might offer month-to-month options or flexible terms. Evaluate whether you prefer a fixed-rate contract or a more flexible, pay-as-you-go model that allows for adjustments depending on your shipment needs.

For example, if you’re not sure how frequently you’ll need car shipping services, a provider with flexible contract options may be more beneficial than one with strict long-term commitments.

7. Read Reviews and Ask for References

One of the best ways to gauge a provider’s reliability and service quality is to read reviews and ask for references from other customers. Look for online reviews, testimonials, or case studies from customers who have used the provider’s services. This can give you insights into their track record, customer satisfaction, and overall service quality.

For example, if you’re shipping cars internationally, find reviews from customers who have used the provider for similar purposes. This can help you assess whether the provider is capable of meeting your specific shipping needs.

8. Consider Their Experience in Your Industry

Finally, choose a provider that has experience in your specific shipping sector. Some managed transportation providers specialize in specific industries, such as automotive, retail, or healthcare. A provider with experience in shipping cars will understand the unique requirements of transporting vehicles and will likely offer more tailored solutions.

For instance, if you’re primarily focused on car shipments, ensure the provider has experience managing vehicle logistics and understands the complexities of shipping cars safely and efficiently.

Case Studies: Success Stories of Managed Transportation

Managed transportation has helped countless companies streamline their shipping processes, cut costs, and improve efficiency. Below are a few success stories from businesses that have successfully implemented managed transportation services, showcasing how these solutions can lead to significant improvements, especially for companies working with limited budgets or shipping needs.

Case Study 1: Car Dealership Shipping Efficiency

The Challenge:
A mid-sized car dealership located in a rural area needed to regularly ship cars from U.S. manufacturers to their showroom. The dealership was spending a significant portion of their budget on logistics, often facing delays, communication issues with carriers, and rising transportation costs. The dealership was struggling to meet customer demands for timely deliveries without blowing their budget.

The Solution:
The dealership partnered with a managed transportation provider specializing in automotive logistics. With the implementation of a Transportation Management System (TMS), the provider was able to optimize routes and carrier selection. The system also provided real-time tracking, allowing the dealership to keep customers updated on the status of their vehicle shipments.

The Outcome:
The dealership saw a 20% reduction in transportation costs within the first six months of using the managed transportation service. The TMS helped identify the most cost-effective shipping routes, while the provider's strong network of carriers ensured that vehicles arrived on time and in good condition. With improved visibility and better communication, the dealership was able to offer more reliable delivery dates, enhancing customer satisfaction.

Case Study 2: Expanding E-commerce Retailer

The Challenge:
An e-commerce retailer selling automotive parts needed to scale their shipping operations as demand grew. The company was shipping hundreds of orders daily, but their transportation system was inefficient. They faced challenges with managing multiple carriers, fluctuating shipping costs, and lack of visibility into delivery statuses, which affected their customer experience. The retailer was also concerned about keeping costs low as they expanded into new regions.

The Solution:
The retailer adopted managed transportation services, integrating a TMS to automate carrier selection, optimize routes, and track shipments in real time. The provider also helped with carrier management, ensuring the retailer worked with the most reliable and cost-efficient carriers for their needs. They were able to access a broader network of carriers, with various options depending on the shipping distance and urgency.

The Outcome:
By consolidating their shipping needs with a managed transportation provider, the retailer reduced freight costs by 15%. The improved visibility allowed the company to keep customers informed with accurate delivery estimates, resulting in higher customer satisfaction and fewer delivery-related complaints. The retailer could also scale their shipping operations efficiently as they expanded into new regions, without significantly increasing costs.

Case Study 3: International Vehicle Exporter

The Challenge:
An international vehicle exporter in the U.S. needed to streamline their cross-border shipping operations. With cars being shipped to multiple countries, the exporter faced difficulties in managing different transportation providers, dealing with fluctuating shipping rates, and ensuring compliance with international shipping regulations. Additionally, the exporter struggled with visibility, as they often couldn’t track the status of vehicles once they were in transit.

The Solution:
The exporter switched to managed transportation services, partnering with a provider who offered specialized international shipping solutions. The provider implemented a TMS that not only optimized routes but also took into account the complexities of international regulations and customs. The system allowed the exporter to track shipments from the U.S. to their international destinations in real time.

The Outcome:
The exporter saw a 25% reduction in shipping costs within the first year. The improved route optimization led to more efficient shipping, while the real-time tracking system gave the exporter and their customers better visibility into shipment progress. Additionally, the managed transportation provider helped the exporter navigate international customs, reducing delays and improving delivery reliability.

Case Study 4: Small Business Freight Management

The Challenge:
A small business selling specialty parts for cars had a limited shipping budget and could not afford to hire a full-time logistics team. They relied on a patchwork of freight carriers and were often faced with unpredictable rates, frequent delays, and a lack of transparency in their shipping processes. The business was finding it increasingly difficult to meet the growing demand without raising prices or sacrificing customer service.

The Solution:
The small business worked with a managed transportation provider that helped streamline its entire freight process. The provider used a TMS to automate shipment tracking, carrier management, and cost forecasting. The system also provided detailed reporting, which helped the business better understand its shipping costs and identify areas for potential savings.

The Outcome:
The small business saw a significant improvement in its logistics operations. With a more streamlined process, the company reduced transportation costs by 18% and improved delivery times. The ability to access detailed reports also allowed the business to make more informed decisions regarding shipping methods and pricing, ultimately helping them maintain competitive pricing for their customers without sacrificing service quality.

Case Study 5: Large-Scale Manufacturer Shipping Optimization

The Challenge:
A large-scale U.S. manufacturer of automotive parts had a complex supply chain, with multiple facilities across the country and international shipping needs. The company was facing escalating transportation costs, long lead times, and poor visibility into its logistics operations. The manufacturer wanted to improve its supply chain efficiency, reduce costs, and improve the on-time delivery of parts to customers.

The Solution:
The manufacturer chose to partner with a managed transportation provider that specialized in large-scale, multi-facility operations. The provider implemented a TMS to optimize routing, reduce empty miles, and select the best carriers for each leg of the journey. The system also allowed for real-time tracking, so the manufacturer could monitor shipments and keep customers informed.

The Outcome:
After implementing managed transportation, the manufacturer achieved a 30% reduction in transportation costs due to improved route optimization and better carrier management. The company also improved its on-time delivery rate by 20%, thanks to more reliable shipping and proactive tracking. The integration of the TMS allowed for better coordination across the manufacturer’s facilities, leading to a more efficient and cost-effective supply chain.

In conclusion, managed transportation offers a smart solution for optimizing your shipping processes, saving costs, and improving overall efficiency. By leveraging advanced tools and experienced providers, you can streamline your logistics and focus on growing your business. Ready to enhance your shipping experience? Register at ykfreight.com today and start benefiting from cost-effective, reliable transportation services tailored to your needs.

ASK YOUR QUESTIONS

*

*