With the increasing complexity in supply chain operations, more businesses are adopting managed transportation for better control and visibility of their logistics operations. Managed transportation denotes outsourcing your transport management to a 3PL provider that handles everything, including carrier selection, route optimization, and real-time tracking. Let’s explore managed transportation here.
Managed transportation is a service provided by many logistics’ companies. In this service, the company manages all the logistical requirements of a business, including supply chain management, transportation, and other related services. These operations require strategies such as planning, monitoring, and continuous improvement, which these outsourced companies take care of. Businesses often outsource their logistical requirements as that helps them save money on transportation and operate efficiently.
When outsourced, managed transportation is handled by companies that are well-versed with all the activities involved in such logistical operations. They streamline operations, optimize transportation, and manage all the hurdles that come along the way of smooth business operation. Along with it, they continuously monitor this process to ensure maximum efficiency.
Impact of Managed Transportation on Supply Chain Management
Over the years, with the advent of technology, supply chain management has also changed its way of operating. The main changes are high customer demand, increased cost of transportation, and continuously changing rules and regulations. Monitoring all the factors and ensuring smooth operation is a daunting task. This is where managed transportation comes into the picture; they are experienced and fully equipped to handle these issues.
When a company outsources its transportation, the outsourced service provider works diligently to reduce their overall cost of operation. They find the best transport provider at minimal cost. They review the supply chain, and any repetitive task that can be automated is changed to automation to reduce human error. All the transported goods are equipped with real-time tracking to ensure maximum visibility and transparency. To ensure compliance, these managed transportation service providers are always updated with the latest rules and regulations. Furthermore, they mitigate risks by planning better, anticipating, and handling risks.
Benefits of Managed Transportation
Outsourcing the managed transportation service to a reliable, experienced, and capable service provider has a myriad of benefits. Choosing the right service provider can rid a company of a big supply chain nightmare. These service providers help optimize the process, making it cost-efficient and more sustainable in the long term.
One of the major sources of expense for companies is shipping costs. A managed transportation service provider reduces this cost by checking and optimizing the delivery routes; they reduce unnecessary routes and negotiate lower rates with transportation providers as they use these services frequently.
The managed transportation also aims to automate repetitive processes to reduce the risk of human errors. These providers also make every step of the transportation process visible through continuous tracking, ensuring greater transparency. Ensuring the shipment complies with all the relevant standards and meets quality parameters is another crucial service they offer.
Managed transportation uses Artificial Intelligence (AI) optimally to check and analyze order history, and they then use this analysis to predict the demand for each product.
Components of Managed Transportation
So, how does the managed transportation work? When a company outsources its managed transportation, it hands over key aspects of its operation to external service providers. These providers, in turn, operate these key elements on a day-to-day basis to ensure that there are minimal glitches. There are five main aspects or components to take care of: transport, routes, carrier, risks, audits, and payments. Now, let’s explore each of these aspects carefully:
- Manage transport – A transport management system (TMS) is crucial for any logistic operations. A well-designed and implemented TMS can change the way transportation runs. When integrated with other aspects of logistics, TMS can do wonders to streamline the transportation and delivery part to ensure maximum effectiveness.
- Optimize routes – To ensure minimal wastage when running transport, the routes must be optimized for maximum utilization and minimal fuel wastage. When routes are effectively optimized, they ensure improved customer satisfaction, reduced carbon footprints, and improved overall efficiency.
- Handle carrier – To ensure the smooth running of transportation, businesses must choose their carriers wisely. The managed services often hone their relationships with these carriers over the years to get the best service. This effectiveness ensures compliance with all the relevant safety standards and regulations. A good carrier with years of experience can save a lot of hassle caused by non-compliance with these standards and regulations.
- Mitigate risks – Transportation of goods usually comes with its risks. These managed services help mitigate these risks by anticipating and planning for them. When met in the early stages, these risks can save companies from a lot of money, data, and reputational damage.
- Supervise audits and payments – The managed services monitor and audit freight services regularly, ensuring transparency in their cost. Such an audit often saves you from a lot of hassle later. They can also help optimize the cost of these transportation services, thus making them more cost-effective. Being up to date with relevant audits and payments can save business owners time and hassle.
Conclusion
Managed transportation can be a blessing, provided certain aspects of business operations are considered. For example, it is crucial to understand the goal behind outsourcing to managed transportation. The managed transportation company should meet all the goals required for the smooth running of a business. It is, therefore, crucial to get approval from all the company’s stakeholders and ensure they know and agree on all the aspects of what is required from such a service provider. Many such providers can tailor and customize their offerings based on these goals and requirements. That ensures that businesses get their maximum worth.
Contact XPDEL if you are looking for a professional 3PL partner to help you with managed transportation.
About XPDEL:
XPDEL helps eCommerce brands accelerate their growth, empowering them with multi-channel fulfillment, whether shipping directly to consumers, delivering to businesses, or selling through retail stores. We are founded and operated by veterans with experience from Amazon, FedEx, UPS, JDA, Walmart, Target, and other leading companies in eCommerce and Retail. Guided by these experts, we provide customer experiences that help you grow your business.
