Freight Management 101: Key Concepts Every Business Needs

Yes, globalization is amazing 

But as we have seen, sometimes having to move your company’s goods to one place or another, can be a bit of a headache. 

That doesn’t mean, however, that things will remain steady; quite the opposite. Back in 2023, an analysis carried out by Emergen Research predicted some great numbers for the Transportation Management System market's growth by 2030.  So if you are wondering how to keep up with the changes in supply and demand and seeking the most efficient ways to transport your products, we need to talk about freight management. 

‍

A basic concept of any logistics processes? Yes

But one that’s completely necessary for your business 

‍

What’s Freight Management?

We could use only 3 words to describe what freight management is:  planning, execution, and optimization. 

Or we could expand a little and say that freight management is the process that you follow to make sure your goods are moved from one place to another without any issues or delays.  Hence the importance of planning a solid strategy in advance. 

Whether you’re dealing with inbound supplies or outbound deliveries, freight management works to make the transportation of goods as simple as possible for your company. 

‍

Key Stages of Freight Management

Planning 

You might have already an idea of what goods need to go where, but that’s less than half of the job. When you are in the planning stage, your company will need to answer questions like: What carrier is the best choice? What transportation method are you going to use? What’s the best route not only in terms of cost but also sustainability?

Execution

There’s a high chance you won’t be directly involved in this process, as it’s the work of the people in charge of the transportation, and while it’s certainly true that you don’t need to manage all the tiny details, you could save yourself from some problems by keeping an active monitoring of what’s happening with your goods. 

‍

Optimization

At the end of the day, every single business wants the same thing 

To be more efficient, to save resources and still keep making money…and well, to be better than your competitors. 

This is why it’s so critical to see freight management as a continuous process, something that can be improved along the way with the right tools, i.e.: automation. 

For example, if you notice that you could use some insights, you would benefit from having a digital freight management system that allows you to gain full visibility into the process.

‍

Stakeholders in Freight Management

Shippers

Hello yourself, in this category, you’ll find businesses that need to move goods from one location to another. They define the requirements, such as delivery timelines and shipment volumes, just like your company would do. 

Carriers

The people or companies your business partners with to physically transport the goods. This usually includes trucking companies, rail operators, airlines, and shipping lines.

Freight forwarders

Acting as intermediaries, freight forwarders arrange and coordinate shipments on behalf of shippers, often handling documentation and customs clearance.

Receivers

Also known as consignees, these are the final recipients of the goods, typically customers or retail businesses.

Customs authorities

For international shipments, customs authorities ensure compliance with import and export regulations.

Technology providers

Last but not least, we have everyone who provides and maintains freight management systems and tools that enhance efficiency and visibility.

‍

The Role of Transportation Management Systems (TMS)

Just like we mentioned at the beginning, it’s kind of impossible now to talk about freight management without mentioning TMS, after all, they provide you with essential tools to manage all the possible challenges that your logistic operations might face regarding transportation. 

But let’s see that in more detail

• Automation: Tasks like scheduling, billing, and documentation take time so why not rely on automation to save those precious hours and reduce errors? You could even get ahead of possible issues by using a procurement system for your procurement processes.
• Data insights: Detailed analytics can help you identify patterns and make better decisions just in time.
• Integration: Many systems integrate with other tools you might use, like inventory management or ERP software.
• Scalability: As your business grows, a TMS can scale with you, handling increased shipment volumes with ease.

‍

Okay, what about the features you’ll need to look out for in a freight management system?

‍

Excellent question

4 Must-Have for a Freight Management Software

Real-time tracking

This is the kind of feature that can give you a better understanding of your transportation procedures as it monitors shipments at every stage of their journey.

Route optimization

Let’s not kid ourselves, we live in a world where everything can change overnight so learning how to choose the most efficient paths is the best way to save time and resources.

Cost control tools

Who doesn’t want to save money? Look for tools that can help you to analyze expenses and identify cost-saving opportunities.

Scenario analysis

To follow what we mentioned above, and to develop a more resilient supply chain, consider playing around with what-if scenarios so you can see how certain problems could impact your operations. 

‍

Sustainability and Freight Management

And, no, we couldn’t stop mentioning the role sustainability is expected to play in your logistics and the way you handle your transportation activities. It’s not a secret that going green has long stopped to be just a trend to become a must-have not only because our planet demands it but also because that’s what your customers care about. 

Adopting eco-friendly technologies such as fuel-efficient vehicles, optimizing routes to minimize travel distances, consolidating shipments to maximize load capacity, and monitoring carbon footprints, gives you the chance to reduce your environmental impact, satisfy your client’s requirements, and actually become more efficient.

Sounds like a good deal

‍