An effective, future-proof Freight Management System is no longer something you “can” use in the TSL industry – it has become a necessity, something you need to have if you want your business to thrive and remain competitive. So, what can you expect from such software? What product should you choose?
Freight Management System – what is it?
We live in a globalized world, where both people and goods travel constantly all over the planet. Because of the way the economy is set up, the companies from the transportation sector need a complex infrastructure to operate – and it gets more and more robust as time goes on. Managing such a giant web of supply chains for the purposes of third party logistics can be quite a challenge, so using specialized software to make the task a bit easier is pretty much essential.
Freight Management System is one of the names for this category of software solutions (sometimes they’re also called Transportation Management Systems or Supply Chain Management Systems). Such systems are used to coordinate the process of transporting goods and/or people. You can manage supply chains and transport routes, deal with various logistical problems and oversee your operations in real-time, which helps streamline everything and therefore boosts the overall efficiency of your business.
It should be noted that TMS platforms are one part of a larger puzzle – they complement other kinds of information systems, such as ERP (Enterprise Resource Planning), OMS (Order Management System), WMS (Warehouse Management System), and RFID (Radio-Frequency Identification).
Biggest problems of the TSL industry
To see how a transportation management system can help companies in the TSL (Transport, Shipping, Logistics) industry, first, we need to define the problems they face every day. And there are many. Some of them have to do with various business factors, while other issues are directly connected to outdated, mismatched, and badly designed technology – or an IT department can’t maintain it properly. All in all, I guess that if you work at a TSL company, you’re probably familiar with many of these issues.
Issues caused by business factors
1. Costly delays
It’s quite obvious but has to be mentioned nonetheless: delays are often very costly for a transportation company. A package that comes late equals one unhappy client who can potentially vent their anger and frustration on social media. A delayed train opens up the possibility of travelers asking for refunds and compensation.
Some of these issues are random in nature and can’t be avoided. They can, however, be managed, and good software will make this easier to do. For example, you can’t make your trains always arrive on time, but analyzing the reasons behind the delays can allow you to make necessary changes, and avoid the bad scenario in future.
Mistakes and errors will occur, and that can’t be avoided. Sometimes they’ll be human in nature – for example, your employees might write down the wrong address. At other times, the problem will be caused by your system or its inability to properly work with software used in other companies and institutions (postal code errors can be one example of that). No matter what the exact reason is, a good TMS software is a great way to mitigate these issues and make sure they don’t happen very often.
You need a management system that is easy to use and offers your employees access to important information in one place – as both of these things can help reduce the risk of human error considerably. It should also be flexible enough to co-exist (i.e., integrate) with solutions used by your various partners and local regulators.
3. Low profitability
A transportation company, like most businesses, has to be profitable, and achieving that can sometimes be a challenge. In the TSL industry, the margins aren’t very high, so there’s often a thin line between profitability and competitiveness. You can’t set your prices too low, because you want to earn money, but you also can’t make them too high, otherwise your clients will go to the competition. And we know that with global TSL players entering local markets, the competition can be really fierce.
There are many reasons for possible problems with profitability, but the ever changing gas prices are one of the more serious and certainly most persisting among these. Depending on the economy and various political factors, your operating costs might change drastically from one quarter, month, or even week, to the next. Monitoring prices on different gas stations and optimizing refueling plays a key role in keeping your business in good condition and specialized software is the perfect way to do that.
4. Employment shortages
Even the best company won’t be able to do its job properly if it won’t have enough employees – like drivers, for example – on staff. In the transportation industry, employment shortages can become a very, very serious problem. As evidenced by recent events in the United Kingdom where lorry drivers shortage has become quite a crisis.
5. Employee and fleet management
No matter how many employees you have, it’s always important to manage their work properly, so that their time is never wasted (i.e., trips without cargo), every formality is settled (i.e., vacation times, medical check-ups) and everyone is treated fairly (monitoring of gas and phone costs, for example). You also need to take care of the fleet of vehicles (trucks, trains, ships, containers, etc.) – make sure they’re serviced, fully operational, have legalized tachographs, not to mention adequate and valid insurance.
These things seem easy at first, but when your company grows bigger, you have more and more different people on staff and maintain a sizable fleet of vehicles, the management of all these things starts to become problematic. And, where an Excel spreadsheet proves insufficient, a good software solution can really make the difference.
6. Problematic law differences
In the case of international transport, the law can be an important issue. Different countries have their own regulations when it comes to the time allowed behind the wheel (in a professional capacity), not to mention things like holidays or currencies. Also – most importantly – wages and various fees can vary widely across countries or even regions. It’s good to be aware of these local conditions, and better yet to monitor them and manage in such a way, that differences or changes of law never become a serious issue or a nasty surprise. It’s yet another set of data that can be gathered, organized and monitored, thanks to a complete FMS platform.
1. Outdated/badly designed software
One of the major tech-related problems many TSL companies face is outdated software. Sometimes the solutions in use are based on legacy technologies that really should’ve been retired a long time ago, but the people responsible for that decision are either unaware of the alternatives or consider the issue not important enough. Outdated software can result in problems with security, efficiency, compatibility with other systems, and more.
Yet another common scenario is having a system that was built from too many different parts that were slowly added and stitched together over the years. In many cases, such software is also badly documented and designed in a way that doesn’t take the user’s needs into account. The data is decentralized and everything just seems convoluted and hard to use.
2. Systems that don’t fit business needs
Sometimes the company uses software that is woefully inadequate to its business needs. Many companies use only a fraction of functionalities of a given off-the-shelf TMS system – which means you waste lots of money. In such circumstances using a more specialized, lighter custom software is a much better idea – I’ll cover the choice between off-the-shelf solutions and bespoke software in more detail later on in the article.
3. No IT department or bad organization
Many companies in the TSL sector don’t have specialized IT departments, which means they don’t have people who know how to maintain and improve their systems. In other cases, the organizations employ senior developers, who have worked with legacy software solutions (exclusively) for many years, and don’t really have that much motivation to keep in touch with what’s new in the IT industry – after all, such knowledge wasn’t required in their work. Often these people are also scattered across many different divisions, or generally badly organized. All of these scenarios can be problematic when it’s time to change things and introduce something new.
Cybersecurity is an issue for many different organizations nowadays, but using outdated software, and not having IT specialists on staff, can make this problem a lot more severe. And it’s important to remember that TSL companies deal with client data every day. It’s usually not overly sensitive (mostly names and addresses), but it still shouldn’t fall into the wrong hands, and getting hacked can turn into a real PR and legal nightmare.
5. High cost of maintenance and further development
Software – any kind of it, really – has to be maintained to work properly. Not everyone remembers that, and some companies prefer to cut costs, which is almost never a good idea. Further development, usually needed at some point in time, also costs money, and it’s worth emphasizing that outdated technologies can actually make adding new features more, not less, pricey.
Transportation Management System – what should it offer?
Most, if not all, of the issues mentioned above, can be alleviated to some degree by a properly designed transportation management system. Better information flow and organization can help avoid unnecessary delays, eliminate some of the mistakes, and make managing your employees and/or fleets much more efficient.
Higher efficiency translates into more profitability, and introducing automation into areas previously maintained by people can also help you save some money.
What exactly is “properly designed”, however? What do you really need in your software? How can you save time and money? The article “Information Systems in Logistics” by Gabriela Brela (published here) sheds some light on the topic.
To put things simply, FMS software has to be reliable, easy and fast to use, flexible, and open enough to integrate well with different technologies. It also should be economically feasible and efficient – after all, it exists to boost your company’s efficiency, and not drain money from it.
The trend that is very visible nowadays is to abandon on-premises solutions and migrate such TMS platforms to the cloud – thanks to this, they can be used on many different devices, allowing you to access necessary information pretty much anywhere, as long as there’s access to the Internet. Cloud-based approach is a necessity, and there’s no point investing in other options.
There are many off-the-shelf freight management systems on the market. Such solutions probably won’t fit every need perfectly, but might be a good choice for some companies. Here are a couple of examples. Some of them are available as a standalone product, others take the form of a managed TMS service.
Kuebix TMS is a cloud-based solution based on the Salesforce platform. It’s not overly powerful or feature-rich, but it’s still being upgraded, getting better and better as time passes. The cool thing about it, however, is that it has a freemium version, which is a very attractive option, especially for smaller companies. It’s primarily a standalone software product, but the company also offers managed TMS services.
Navisphere is a well-known FMS platform created by TMC, a division of C.H. Robinson – one of the largest logistic companies in the world. It’s a very robust, complex solution that can be used to good effect in most circumstances, from truck transport to freight shipping. TMC can be acquired both as a standalone product, but it’s better known as part of a larger system, in the form of a managed TMS service.
Transportation Management by Bluejay is a complex TMS platform that can be used both for domestic and international transport. It can also be customized for various particular needs using ready-made, plug-and-play plugins. The software won’t offer you the same amount of options as a custom solution, but it can be a good option for many companies. It should be noted that recently Blujay Solutions was acquired by the American software giant E2open. It remains to be seen how it affects the platform.
Custom Software – when is it a good choice?
Off-the-shelf products are a solid choice for some companies, but in many cases choosing custom software is the best option. When should it be considered? In general, the bigger the organization grows, the more it can gain from investing in a solution made specifically for it – sometimes trying to adapt an existing system to your needs can actually turn out more costly than creating something from scratch.
But creating something from the ground up isn’t the only option. In fact, when you don’t want to change your entire IT infrastructure, and you’re looking for something that could be integrated well with other systems used at your company, you should also consider a bespoke solution. Off-the-shelf programs usually have a very specific list of supported standards and frameworks, and while they can be customized and adapted to a certain degree, nothing will give you as much freedom as software created specifically for you. With a custom-made system, sky’s the limit. What’s more, some companies – like Pretius – are very good at identifying deeply hidden problems with software that have hindered your growth up until now. We can find them and propose solutions.
Scalability is another important factor – when you decide on custom software, you can make sure it’ll be ready for the planned growth and expansions.
Finally, if you have some IT-oriented people on staff, you might also be interested in cooperating closely with the chosen software development company, so that your employees can learn the ropes and later maintain and upgrade the new system.
For a more detailed look into the advantages and disadvantages of bespoke software and off-the-shelf solutions, check out one of the previous articles on our blog.
Examples of custom solutions made by Pretius
You might be wondering what’s our connection to the TSL industry, and experience with its unique problems and challenges. In fact, it’s quite extensive – we already have several projects for big TSL companies under our belt. Here are some examples.
A new system for an international transportation company
A well-known European company that specializes in overland transport of goods hired Pretius to modernize its IT infrastructure. They wanted to improve the system’s efficiency and change the architecture, but without turning everything on its head – it was supposed to be more of an evolution, than a revolution. We’ve collaborated with them closely and created a solution that allowed their employees to manage data and orders much easier. We’ve also upgraded their technology stack from Oracle Forms to Oracle APEX and taught their in-house team how to use the latter (we’ve also introduced the developers to the Agile methodology).
Cargo tracking software for a sea transportation company
A Swiss transportation company needed a platform that would allow it to reduce the amount of manual work (and, therefore, the number of human mistakes) to process sea freight shipments easier, thanks to shipment tracking data automatically downloaded from the Ocean Insights API. There were also other goals, such as improving the customer experience and making communication – with the clients, but also other organizations, such as government regulators, ports, and other TSL companies – more seamless. We’ve delivered a complex solution based on Oracle APEX, and also taught the client’s team quite a bit about APEX and Scrum.
Good transportation management software that is (or at some point will be) a must for most companies in the TSL sector. In some cases, an off-the-shelf solution is quite enough, but sometimes it’ll be either too robust or not specialized enough. That’s where custom software comes into the picture. An investment like that can give you a system that fits your needs – and the 21st-century business landscape – perfectly, allowing your company to really spread its wings and fight on the global market.
Do you need custom TMS software?
Pretius has worked with transportation and logistics companies in the past. Our developers know the challenges of that industry in and out, and can help you design a system that’ll fit your business needs as well as it possibly can. You can be sure that we will not change the processes in your company or interfere with the existing infrastructure, but we’ll find out areas for improvement and propose solutions for problems that hinder progress. If you want to find out what custom software can offer you, write to us at email@example.com (or use the contact form below). We’ll get back to you in 48 hours.