Leveraging Logistics Blog

Managed transportation services continue to be the #1 topic we talk with shippers about as they look to optimize their supply chain performance against the challenging backdrop of rising freight rates, tight truck capacity, along with changing and more challenging customer requirements.

The freight broker market continues to evolve its value-add proposition for shippers.  Technology has put this transformation process into hyperdrive transitioning many freight brokers into logistics service providers (LSP’s).

Managed transportation services is the #1 topic we talk with shippers about as they look to better manage their supply chain performance.  Surprisingly, there is very little information about how much managed transportation costs, who the largest providers of the service are in the market and what are all the options a shipper has with the types of services they can obtain through a managed transportation solution.  

People connect with us every day on our managed transportation services to ask various questions about how the solution can help them.  While the questions vary, the one question on everyone's list is how much it costs to bring a managed TM solution to their organization.

Outsourcing non-core competencies has been a long-standing business strategy, but for many shippers the decision to outsource freight activities brings on a number of anxieties starting with the perception of losing of control of what the C-Suite believes should be a core internal competency and continues from there.  While some shippers may be anxious over the decision to outsource freight activities, the larger market is not and the practice is far more common than others think.  Today's logistics technology and business processes within the managed transportation space makes outsourcing seamless to the shipper and its customer base, while providing significant value in price, capacity, market knowledge and overall supply chain performance. 

Outsourcing logistics services puts the day-to-day execution in the hands of trusted logistics experts that frees up a shipper's resources and capital to focus on their competitive advantage and growth.  According to a recent Armstrong & Associates report, ninety percent of Fortune 500 companies use third-party logistics providers (3PL) for outsourced logistics and supply chain services, which is a strong endorsement to the value in outsourcing to a logistics service provider (LSP).   

Inbound freight is typically the last frontier for many companies search for cost savings in their freight spend, as there is an abundance of complexities that are often outside the Logistics & Supply Chain Department's control. When talking about Inbound Freight Management a term often used is Freight Term Optimization (FTO), which is the process by which shippers strategically establish the most advantageous freight terms, while minimizing the total inbound landed cost.  The optimal freight terms are influenced by a shipper’s ability to consolidate orders across days, shipments across vendors / customers, order level-level service requirements and the shipper’s ability to plan and execute routing options like multi-stop LTL, static or dynamic pooling, zone skipping, backhauls, etc.