Why Logistics Companies are adding Managed Transportation Solutions & Services

November 17, 2022

Why Logistics Companies are adding Managed Transportation Solutions & Services


Port Jersey Logistics

Logistics companies cover so many areas in the shipping industry. They have to be on top of all of them all the time. Now more than ever, they are crucial to the supply chain and movement of goods from start to finish across the country and around the globe. Logistics companies are always on the lookout for any advantages that can help them continue to almost seamlessly cover all of those bases, please their customers, and stay ahead of the competition. Managed transportation solutions and services (MTS) is that innovative, broad-based advantage that logistics companies are looking for to provide help during every stage of the shipping process.

What Are Managed Transportation Solutions?

Managed transportation solutions enable shippers to outsource their freight and logistics processes to a 3PL. In its simplest form, it can help a company by taking over the daily concerns of moving freight. MTS can manage every stage of the operation "from procurement to planning to execution to settlement" or it can focus on a single step. MTS is usually more efficient and cost-effective than having company staff dedicated to performing the operation.

8 Benefits of Managed Transportation

The benefits of managed transportation are as numerous and varied as the many areas of operation it encapsulates. Here are some of them.

1. More Access to Capacity

Logistics service providers (LSPs) plug into the freight and logistics market daily. They're very efficient at finding capacity at the best price, which is much more difficult for shippers that don't have the same resource network. The connections to technology, industry relationships, and shipment volumes mean LSPs can get lower prices for their clients. Buying leverage usually accords them the ability to negotiate a reduced price of accessorials for things like liftgates, special inside delivery, and products that have particularly large dimensions. An LSP with an extensive range of clients means broader relationships and a volume that increases the LSP's market data. That data can be used to find ways to cut down the managed transportation client's freight cost.

2, Tighter Cost-Savings Structure

With the ability to balance work for multiple clients across a broad resource base, LSPs can offer a variable cost structure to their partners. Labor is one part of that variable cost structure, but so is technology. Stair-step costs and the need for updated technology can become cost prohibitive if a shipper operates solely within its own system. But with managed transportation solutions and services on board, a company can take advantage of the broader resources and grow without being hit by some expansion costs. Leveraging the industry expertise of the LSP staff can lead to even more savings. They can quickly and clearly assimilate data while keeping a close eye on the market to find better solutions and ways to be more efficient.

3. Shifts Focus to Core Processes 

With an LSP taking over the main functions of the logistics part of a business, that opens up more time and more resources so the shipper can shift focus to other facets, which can lead to a significant advantage over competitors. More core areas such as sales, marketing, and customer service can benefit from having more staff and greater attention paid to them. That can lead to more profits, better reviews, and a heightened company image.

4. Enhanced Risk Management 

This benefit probably isn't as immediately identifiable as the others, but it does directly affect any shipping manager it gives them peace of mind. With freight activities shifted to an LSP, the shipper's liability and cargo risk involved with the shipments usually transfers as well. However, the turning over of responsibility depends on the carrier agreement details. In addition, the systems used by LSPs continually check the legality of the trucking partner to ensure everything during the trip is legal and insured. This approach protects the shipper from penalties and fines.

5. One Point of Contact

Like risk management, this benefit can save you some headaches. If you are a shipper handling all your logistics needs, you must communicate with each party involved in shipping your product. Sometimes that can be a monumental struggle. With a 3PL using MTS, you only have to get on the same page with one contact--the 3PL handles the rest. And the parties on the other end of the shipping transaction know they are dealing with one person well-versed in each shipment and the industry. In the broader sense, it gives you total visibility across every part of your supply chain from one place with standardized processes and on-demand support.

6. Greater Supply Chain Flexibility 

With the added perspective that a provider with MTS brings, there is also the ability to be more particular. An added wealth of experience and expertise opens up more options to modes and carriers, empowering the shipper to find the best suitable choice. That flexibility combines with adaptability, a winning combination when competing against others in a highly competitive and decidedly complex industry.

7. Improved Return on Investment

Return on investment (ROI) is one of the quantifiers of whether your service is successful and profitable. Working with an MTS provider unlocks a world where you can raise your ROI by reducing costs and generating value. Acquisition and bidding have become faster and cheaper. Also, technology allows for more accurate models to develop better forecasts that can help you be ready for any unknown challenges that could arise.

8. No Back Seat Needed

There is a windfall of data that comes from TMS implementation. That data allows logistics to hold more cards. It no longer has to take a back seat to internal IT priorities because the LSP can perform the IT service functions. This new system can compile specialized reports, make data pulls, analyze, reconfigure a system to suit a customer, and even customize automatic emails.

Managed Transportation is All About the Tech Stack 

As logistics service providers have become more conspicuous in the shipping world, they have also become more competitive. One of the most intensely competitive facets is the quality of technology used to plan and execute shipments. Not only is it crucial to have the best or newest state-of-the-art technology, but making all those technologies work together as the perfect tech stack is also a significant factor.    

The two main tech choices are implementing a transportation management system (TMS) or outsourcing transportation to a provider. In the provider's MTS, there are planners in a control tower using a TMS and other technologies to plan and execute loads on behalf of their clients. MTS providers have two choices: build their own TMS or go with a solution from a software supplier. The build-your-own software can be modified. For instance, some companies have added robotic process automation, software designed for high-volume and repeatable tasks.

In other cases, companies look at freight capacity levels and spot market pricing to predict what freight prices might be in the following weeks. Another alternative is to use a cost prediction model to provide intelligence on pricing and market trends to create more dynamic information sharing between 3PLs, shippers, and brokers.

3PLs with MTS Give Shippers Other Services for Logistics Optimization 

The real value of managed services is in the value-added services. Operations like auditing, accounting management, billing, compliance record keeping, load matching, and big data analytics-driven insights can all benefit. Those 3PLs with MTS are constantly searching to maximize service and value without adding to shippers costs because those services mean more ways to have meaningful partnerships with carriers and improve supply chain responsiveness. Take drayage, for example: If a drayage company partners with a TMS for state-of-the-art tracking, it can offer solutions based on the shippers needs. Services like translating and handling heavy or oversized equipment become part of the overall plan.

When a 3PL with MTS offers real-time information online, it can empower clients, their customers, and suppliers. Everyone can experience the benefits of sharing the same information, leading to more extensive supply chain collaboration. They save money, improve customer service, and increase margins. So not only are 3PLs with MTS answering transportation concerns, but they are getting to the very heart of why companies want help to solve pain points.

Team With Port Jersey to Make TMS Magic

Incorporating managed transportation solutions and services into your logistics team can feel a bit like a cure-all. It can help remove many of the transporting headaches, increase efficiency, and boost your bottom line. If you want all that, team up with Port Jersey Logistics to put that in motion. With over 65 years of integrated logistics services, they can make the complicated world of MTS become your greatest asset. Visit our website today.

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