The relationship between shipper and carrier is at the heart of a logistics program. To deliver the goods to the end customer at the right place and at the right time, you as the shipper depend on the carrier. At HorizonGo, we use the term “carrier” to include logistics service providers (LSPs) and third-party logistics providers (3PLs).
Shippers often work with multiple carriers to transport goods to multiple destinations, sometimes worldwide. To grow your business and stay competitive, you need optimized carrier management systems.
Definition of Carrier Management
Carrier Management is a transportation department that allows companies to monitor and manage carrier performance through carrier scorecards, contract and rate management, and claims management. It provides visibility through analytics, helps make critical business decisions, and improves collaboration with carriers. Carrier management software is a modern way to view critical data and ensure customer satisfaction.
Maturity In Carrier Management And Transport Cost Management
As industry experts, we see carrier management as a key component of HorizonGo’s Transport Spend Management (TSM) maturity model. This model is a framework that provides large, global companies with a roadmap to move from a lack of visibility and control to a fully optimized and accurate data-driven transport supply chain.
Efficient Carrier Management
Effective carrier management helps you manage the performance and relationships of your carriers, both reactively and proactively, with greater confidence and less disruption to your business objectives. If your primary mission is to streamline operations from contract negotiation to on-time delivery, you need a carrier management system. It gives you a flexible supply chain that’s future-proofed and better able to respond to transportation problems as they arise.
The Importance of Carrier Management
It’s important to assess whether your carrier management system can scale to meet the growing needs of your business. Freight carrier management software supports this important function for companies that need more than freight audit and payment (FAP) solutions for their wider operations.
A freight audit and payment system includes invoice processing and payment automation, elimination of duplicate invoices (and covers several other critical data points), accumulation of received but unpaid invoices, etc. Basically, the freight audit helps to find and report disputes.
However, as a business matures, the needs go beyond basic FAP services alone. For experienced companies, it is crucial to move to more comprehensive and efficient freight management and financial management. This ensures that your team meets relevant customer service standards, avoids negative consequences such as hidden freight damage, maintains best practices, and does all of this using the latest tools and technology.
Freight carrier management encompasses three critical functions that will improve your organization’s efficiency and offer significant opportunities for cost savings.
Scorecard for carriers
The Freight Carrier Scorecard is a tool that allows you to distinguish between qualitative and quantitative characteristics of your freight carriers so that their performance can be assessed against pre-defined KPIs. The KPIs selected by your company, aligned with business objectives, will help you evaluate your transport companies on a monthly, quarterly, or annual basis.
Examples of KPIs include:
On-time pick-up and delivery, invoicing accuracy, and data quality. By using the data from the haulier scorecards, you can build strong relationships with hauliers and gain insight into your own and your hauliers processes. At HorizonGo, we believe in the adage “you can’t control what you can’t see”, which means that data and visibility can be used to increase efficiency, optimize and directly impact the bottom line.
Contract and Price Management
Comprehensive operator management also focuses on contract compliance. HorizonGo helps optimize processes and ensure contract compliance to better manage transportation costs. Invoicing according to the terms of the contract is key; fees and other costs that don’t comply with the contract are wasted money. Since each company’s needs and transportation logistics are unique, customizing a transportation management solution is key. For example, HorizonGo consults with our clients on the relationships they want to build with carriers to maximize efficiency, improve the customer experience, and minimize costs and risks.
Claims Management
Claims handling and resolution is often more important than companies realize. To ensure a good customer experience, disputes, and claims must be handled efficiently. For example, when a customer orders a product and doesn’t receive it, the company sends it back to customer service. This, however, leaves your company with an arduous claims resolution process: finding a shipping notice, an invoice or other documentation to prove the cause of the error, sending everything out for review, etc. Typically, such cases recorded as losses, resulting in additional costs for your company. Over time, such a situation leads to large financial losses.
A more mature company, on the other hand, will file a claim and then appoint specialized staff to compensate for such losses. However, this often turns into an operational efficiency problem. Now consider a company that is fully mature and optimized in managing transportation costs.
Such a company eliminates errors and increases the accuracy of verification processes. At HorizonGo, we pride ourselves on providing this level of maturity to enable faster and more successful claims resolution. This frees up resources and resources for other tasks important to your business and helps you continue to prioritize excellent customer service.
Managing Operators With Horizongo
At HorizonGo, we are industry experts who facilitate the maturation of transportation cost management for global organizations. Our clients are leading operators across all industries, and our solutions are best-in-class and support success on all fronts.
TSM with HorizonGo is a holistic effort, and we provide end-to-end support to ensure you get the maximum benefit. This includes absolute visibility into every process, absolute understanding of your strengths, weaknesses, and opportunities, and skillful implementation of a platform designed to facilitate sales and service.
This process doesn’t happen overnight, but when you reach maturity in managing your transportation spend, you will have the right solutions in place to support your business goals. TSM tools streamline transportation operations management across all industries.