Most businesses that ship frequently have established contracted rates with LTL shippers (whether directly, or through a third party). Yet even with all of the third party research available today validating the benefits to using some type of application to manage contracted rates I find it interesting that many shippers have not adopted some type of transportation management software.

Time and time again I hear decision makers say… “our current process works fine”… “TMS’s are too expensive, we will never recoup the implementation cost” … “we’ve tried using a transportation software before and it didn’t work well with our current process” … “I have a million dollar freight spend budget , but can’t spend a penny on logistics software” … “freight management software is too difficult to deploy” … … … You get the picture.

So just what are the benefits?  Without taking my word for it, I thought it would be worthwhile exercise to sum up what logistics publications are saying about freight management software.

-“[Shipping companies] that are utilizing a contract management solution are garnering the subsequent benefits. Companies are able to better establish their carrier selection process thus reducing their transportation spend.” (Management Dynamics, Inc., August 2011).

-“The manual processes that once thrived in the stagnant pace of change in transportation costs are no longer adequate to keep up with today’s decision making process.” (Aberdeen Group, July 2008).

-“On demand TMS … have largely eliminated the cost and resource constraints companies have traditionally faced in implementing new technology and continuous improvement initiates. By eliminating these constraints, companies can break free from the status quo and implement best practices that result in significant cost savings and productivity improvements” (Logistics Viewpoints, May 2009).   

The intended take away from this little exercise is that shippers that are adapting to the ever changing transportation environment, by implementing transportation management solutions, are seeing improved productivity and significant cost savings coming out of their transportation department.