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?
Disclaimer: This article was refurbished and updated with new information on 02.03.2022.
In this article you’ll find:
- The definition of a Freight Management System
- A list of the biggest problems the TSL industry is currently facing
- A summary of characteristics of a good transportation system
- Several interesting off-the-shelf solutions
- Advantages offered by custom-made software
- Examples of software made by Pretius
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 – a Freight Management System – to make the task a bit easier and boost the efficiency of your business is pretty much essential.
Biggest problems of the TSL industry
To see how a transportation management system can help companies in the TSL indsutry (Transport, Shipping, Logistics), first, we need to define the problems they face every day. Some of them have to do with various business factors, while other issues are directly connected to outdated, mismatched, and badly designed software. I guess that if you work at a TSL company, you’re probably familiar with many of these issues.
1. Low profitability
The margins in the TSL industry aren’t very high, so there’s often a thin line between profitability and competitiveness (and the competition is even higher with e-commerce starting to use multi-carrier shipping). The ever-changing gas prices are one of the most serious factors here. Depending on the economy and various political issues, 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.
In the case of international transport, the law can be an important issue, too. 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 yet another set of data that can be gathered, organized and monitored, thanks to a complete FMS platform.
2. Mistakes
Mistakes 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, good TMS software is a great way to mitigate these issues and make sure they don’t happen very often (by being adequately new and flexible and providing access to important information in one place).
3. 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. In the case of B2B (business-to-business) transport, a truck that doesn’t arrive on time can spell serious trouble for your partners, who’ll most certainly take their anger out on you, and expect reimbursment of losses from your company. 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.
4. 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.
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.
5. Outdated software and systems that don’t fit business needs
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 – or built from way too many different parts that have been stitched together over the years – 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 cybersecurity, efficiency, compatibility with other systems, and more. In some cases, the data is decentralized and everything just seems convoluted and hard to use. In other scenarios, the software is woefully inadequate to the company’s business needs.
It’s also worth remembering that 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.
6. 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.
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.
Off-the-shelf solutions
It’s worth mentioning that custom software isn’t the only way – there are many off-the-shelf freight management systems on the market. Some of them are available as a standalone product, others take the form of a managed TMS service. Such solutions probably won’t fit every need perfectly, but might be a good choice for some companies. For example:
- Kuebix TMS – an interesting option for smaller businesses, with an attractive freemium version;
- Navisphere – a well-known, robust system by the TMC company (a division of C.H. Robinson, one of the largest logistics companies in the world);
- Transportation Management – a complex TMS platform by Bluejay that can be used both for domestic and international transport.
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).
If you want to know about this case study, you can read the follow-up article, in which I describe it in more detail.
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.
Conclusion
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. For more information on great Pretius projects check out the other articles on this blog:
- Courier API integration – How we optimized the shipment process for one of the biggest Polish telecoms
- Loyalty platform: A great investment for your FMCG company
- Freight cost management software: A chance for your road transportation company
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. You can be sure that we won’t 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. Write to us at hello@pretius.com (or use the contact form below) to schedule free consultations. We’ll get back to you in 48 hours.
