As part of our October series on the Banyan Blog, we will be preparing for the spookiness of Halloween by taking a look at the scariest parts of freight management.
In this week’s installment—the first in the series—we discuss one of the nightmares for operations managers: not getting the most out of every department. We revisit one of our favorite blog posts to discuss what operations managers can learn from 3PLs to improve their shipping processes.
Keep reading, if you dare!
Overseeing an organization’s shipping operations is a complicated and time-consuming job. No matter who is in charge of any given organization’s operations—in-house or out—the lessons learned from the technology used by the top 3PLs will improve any businesses’ bottom line.
Specifically, over the past several years, the top 3PLs have all turned to one game-changing technology to improve shipping functions: Live connections, including application program interface (API) technology, enable 3PLs to ship quickly, on-time, and cost-effectively every time.
So, what can operations managers learn from the top 3PLs?
Here’s the Magic
First, the best 3PL managers are experienced professionals dedicated to hiring quality, knowledgeable staff that can pull a last-minute “truck out of a hat” on a Friday afternoon of a holiday weekend. That comes from deep relationships and an even deeper contact list. But what’s loaded in their wand to help process the day-to-day activities isn’t magic: it’s live connections with carriers. Direct and instant connectivity to carriers creates the framework to instantly exchange information between all parties of the shipping process.
Consequently, the top 3PLs get the information they need to choose the best carrier for every shipment. That translates to lower annual shipping costs while gaining visibility to deliveries. As an operations manager, having the ability to choose the lowest cost from a group of preferred carriers would be a large step forward in the direction of saving your company money.
With live connections directly synced to their carrier base, the top 3PLs can:
- Compare the most up-to-date pricing information across all their carrier contracts.
- Require an exception code any time the lowest cost carrier isn’t selected for better team accountability.
- Reduce assumptions and estimates based on averages (like routing guides and static rate tables).
Another Trick Up Their Sleeve
The top 3PLs can instantly tender a load with live connections. The instant they book a load, live connections provide an instant confirmation number letting you know within a few seconds that the carrier received the order and are en-route to pick it up. Traditional EDI 204s, which can take hours, only reveal that they received your request.
Better data delivers better carrier performance metrics, and better conversation when it’s time to negotiate.
Clearing Out the Smoke and Mirrors
With the magic of live carrier connections, one thing the top 3PLs make disappear is the classic annual RFP process, especially if it’s built on a single rate base.
When 3PLs are always connected to their carriers, they can collaborate monthly on pricing – which may sound like a task, but with the data from live connectivity, it’s a snap. Live connections provide the data to create feedback loops to let carriers know what they missed and by how much. And as businesses and their networks change, the carriers can offer lane-specific adjustments that are instantly available and become part of the updated contract. That means you can start saving money, sooner.
The bottom line is that without live connections, even the best 3PLs miss opportunities for cost-savings and increased efficiencies. As an operations manager, this missed opportunity to find savings, that would increase your bottom line, is too big of an opportunity to pass up. In today’s business climate, every chance must be taken to save your company money. Without the benefits of live connections, you’re leaving a lot of money on the table.
But this magic isn’t just reserved for 3PLs. All the same benefits apply to individual commercial shippers who connect directly with their carriers too, including manufacturers, distributors, wholesalers, and more. If you’re shipping more than 200 LTL loads a month, average cost savings is in excess of 16% on freight spend.
If you are in charge of operations at your company, it would make sense to use the latest technology to save money. And, commercial shippers can use the Banyan TMS, or you can plug Banyan’s live connections into the current TMS you already know and love.
To request a demo and learn more about why the top 3PLs depend on live connections, contact us today.