With the acceptance of cloud based applications by corporate America, enterprise class technologies are now more affordable than ever. When looking for the absolute best of class Shipping System you should find a system that allows you to do the following (these are easy to implement and give you a fast ROI):
Carrier Rating through Optimization Contrary to the early years of basic manifesting, modern TMS are now capable of not only rating "like" carriers and services, but also cross carrier rating. Shippers can now compare small parcel carriers to LTL and courier services. The technology can now factor DIM weight into the equation so as to make intelligent pre-shipment decisions.
In all, there are 200+ surcharges that are employed by UPS and FedEx. Reduction of these surcharges by having them in the rating schema can reduce shipping charges as much as 30%.
Post Shipment Auditing Because of the availability of industry APIs (Application Programmers Interface) these new surcharges are now being addressed from a refund standpoint. Many TMS now utilize the cloud to audit freight bills immediately, thus allowing for revenue recovery of mis-invoiced activity. Some of these activities include "manifested but not shipped" and extended area and residential surcharges. On average these refunds range from four to six percent off the total UPS and/or FedEx annual freight expenditure.
Another recent advancement of the new generation of TMS are dashboards. These easy to use intuitive tools allow for organized retrieval and reporting of supply chain activity. This allows for intelligent post-shipping decisions. Customer service departments can now route based on shipping profiles that are created from this analytical data.
SaaS Payment Options Long gone are the days of costly hardware investments to house and maintain "on-premise" TMS. So too are gone the costly investment and time consuming tasks of IT personnel to administer these solutions. State of the art hosting facilities now offer shippers more security and data integrity than ever before. Amazon, Hewlett Packard and IBM are just a few of the big names getting involved in this brave new world — and the cost of hosting has never been more affordable ($500.00 to $1,000.00/month complete with fault tolerance and redundant back up safeguards). This expenditure pales in comparison to costly IT staffs and constant hardware and software “upgrades”.
The most compelling aspect when evaluating applications available in the cloud as opposed to On-premise solutions is the paradigm shift away from licensing software and costly annual maintenance agreements. The new transactional model is based on buying transactions for actual usage of the system. This alone can save shippers roughly 18% of the total purchase price of traditional on-premise TMS in just the elimination of annual software maintenance agreements.
When purchasing a new best of breed TMS — in order to optimize your productivity and save $$ — you should be looking for the following:
- A hosted cloud based solution with operational cost containment
- A system based on the transactional pricing model, which offers purchasing of block transaction for a low cost per transaction regardless of the carriers used
- For pennies a transaction, look for a system that will rate, process and track UPS, FedEx, DHL and USPS as well as optimize against LTL and regional couriers with UNLIMITED domestic workstations and locations
- Look for a provider that offers automated freight auditing on a gain-share basis whereby the customer only pays when there are actual refunds or credits. The shipper pays on actual savings after the refunds or credits are received, and
- A system that gives you discount and markup capabilities, so that shipping charges can be passed on and still save the recipient money off the cost of their overall order.
Once you have a system with the above cost cutting technology, the shipper can turn their traffic department into a profit center.
Peter Christy is Vice President Enterprise Shipping Solutions for Window Book, Inc. Window Book can be contacted at 617.395.4585.