It’s no secret that trucking industry is in the midst of a labor shortage, with drivers in high demand. According to the American Trucking Associations, “the industry struggles to find enough qualified drivers … [with a] current shortage of roughly 25,000.”
Some of the factors playing a role include changes in regulations, relatively low pay, and the fact that fewer young people are interested in the profession. There is no quick fix to this problem, and many companies are already starting to think outside the box [or wa-a-y-y-y-y outside the box, suggesting driverless vehicles, for instance] to try and address this issue. One of the obvious and more realistic solutions is also much more immediate: good software.
One of the options for both carriers and shippers is to look at using software like a Transportation Management System (TMS) to assist in reducing the need for so many drivers. How? Well, by opting for a TMS, you’re unlocking a mountain of data that you can then use to make better decisions and optimize your transport needs—ultimately cutting down on the number of vehicles and drivers needed to properly transport the same amount of—if not more—goods.
Not only is it important to have a software solution like a TMS, but having it connect to a large network of shippers and carriers also is key so information can be shared and companies can truly collaborate in ways that aren’t possible in a manual, disconnected business environment.
Let’s explore some of these opportunities from two different viewpoints:
•The carrier that moves goods to various locations on behalf of shippers.
•The shipper that fulfils customer orders by delivering the goods.
Options are slightly different for both parties, and not all may apply to each of the businesses in the market today. So let’s walk through potential options to exemplify a TMS in action:
1. Carriers—Maximize Exposure. In a capacity-constrained market, the value of constrained commodities naturally rise. However, it’s always best to have the highest amount of exposure to the marketplace to ensure you are getting the maximum return for your services. By connecting to a carrier network that is used by a large number of shippers you are able to offer your services to a higher number of bidders and therefore maximize your opportunities of selling available capacity.
2. Carriers—Speed of Payment. By being electronically connected to your customers, you can ensure you have an environment that is conducive to speedy payments. By delivering your invoice electronically to a shipper using a TMS that allows for automated freight match and pay capabilities, you can see your invoices paid almost immediately, eliminating the need to chase down invoices.
3. Shipper—More Carriers to Choose From. Many shippers use a select group of carriers to move their goods from A to B. However, there are thousands, if not hundreds of thousands, of potential carriers in the United States to do business with. For example, one additional carrier may have capacity open on a backhaul leg that could provide the perfect solution for the shipper. If you are in the market for a new TMS, make sure you have connectivity to the broadest network of carriers possible to maximize your ability to find available capacity for your shipments.
4. Shipper—Private Fleet Utilization. If a shipper runs its own fleet, why not consider maximizing utilization by collaborating with another shipper to share capacity or selling the excess capacity to other shippers via a collaborative carrier network? There is a significant amount of spare capacity in the US road market today. Collaboration among shippers is where the development of today’s modern TMS solutions began, but the dynamics then never drove that opportunity to a successful conclusion in the marketplace. Today’s market dynamics are aligning to make collaboration between shipper private fleets more likely.
5. All–Big Data/Information—By connecting to a TMS and shipper/carrier network that is transacting a high volume of shipments between shippers and carriers, a large amount of data can be converted into information that can help users better understand and then react to market trends and dynamics.
While it is true that there are issues in a capacity-constrained market, challenges always present opportunities. Those businesses that have the knowledge and agility to react to and take advantage of these opportunities can benefit most. Is yours one of them?
Evan Puzey is the chief marketing officer of Kewill. With nearly 20 years’ experience in the supply chain industry, he has assisted enterprises and logistics service providers in more than 30 nations, across five continents, with their supply chain initiatives. Originally a demand forecaster and planner for Castrol in the Asia Pacific region, Puzey moved to a solution implementation role with Mercia (supply chain planning) and then progressed to sales, pre-sales, marketing, and global product management roles with Mercia and then Finmatica (supply chain management). He has been with Kewill since 2004 in senior marketing and product management roles, most recently as chief operating officer for Kewill Asia Pacific.