It’s no secret: Forwarder executives have known for decades that millions of dollars have been slipping from their bottom lines, little by little, almost every time they do business with trucking companies. The reason is simple: They haven’t had the tools to manage trucking processes as closely as they do their airline and shipping line expenses.
But a handful of leading forwarders have changed the game. They have employed newly available tools, and they are leading the industry’s truckers, en masse, to full participation. The truckers are playing ball.
Here are 10 key areas where a few forwarders are leveraging these new tools to save money, save time and improve service:
1. Choosing the right trucker — rates.
- The way it has been: There isn’t time to make the best choice for each truck move. That would require multiple phone calls, or multiple calculations from paper tariffs, with fuel surcharges, accessorial and other charges. So this is the way decisions are usually made:
- Who do we use for pickups in Springfield, Mass.?
- We use Big Bob’s …
- With the new trucking tools: In about 10 seconds, any employee can enter the basics of any truck move (port or airport, ZIP Code, weight or container type) and then view the comparative rates from the private tariffs of each trucking company you have approved, including fuel and any accessorial charges. It’s that simple, and the savings will often be 5, 10, 20 percent over “Big Bob’s.”
2. Choosing the right trucker — service.
- The way it has been: When shipments have special requirements (hazmat, bonded, perishable, overweight, rollabed, etc.), the result may be a series of phone calls to trucking companies seeking out those with the right equipment, licenses or specialties to handle specific shipments.
- With the new trucking tools: Your people simply click and can view the licenses, fleet, authorities of hundreds of trucking companies that you do business with.
3. Consolidating orders to reduce cost.
- The way it has been: Five deliveries and three pickups for the same company may all be dispatched separately — and billed to you separately. Tools don’t exist to view all activity and consolidate multiple shipments into logical single loads at lower cost.
- With the new trucking tools: Your employees can view all open orders, group them together into a single load and create consolidated documentation for the trucker who agrees to do the move for a flat charge. The trucker enters the point(s) of delivery (PODs) and billing for the load — and that data flows back into your tracking system at the file level, while the charges flow into accounts payable, accurately pro-rated by the weight of each individual file.
4. Gathering PODs.
- The way it has been: Paper pours out of the fax machine or comes stuffed in envelopes with invoices, and your people are kept busy entering what they get and chasing truckers by phone for what is missing. Despite all the work, it is too little, too late … POD data is rarely timely or complete.
- With the new trucking tools: Truckers automatically provide POD data that flows into your tracking system — and it is more than 99 percent complete. All forwarder labor for gathering PODs is eliminated.
5. Auditing charges.
- The way it has been: Trucking invoices are reviewed one-by-one, but get only an eyeball audit: “We charged $145 and they are billing us $135 … looks OK to me!” Your people don’t have the time to calculate precisely each individual charge to identify overpayments.
- With the new trucking tools: When a trucker enters $135, the system tells him immediately that this charge is more than his tariff — and he corrects his error, billing the correct charge ($127.14) before you have even seen his charges. The audit is automatic, so your employees only view the cases where the trucker is billing you more than the tariff or your expected charge.
6. Resolving disputes.
- The way it has been: If your people think they are overcharged, they either short-pay the trucker (and often deal with a second invoice later when the trucker objects), or call the trucker and request a revised invoice. Either procedure takes time, requires reconciliation and keeps files open on desks.
- With the new trucking tools: If a trucker is charging more than tariff or more than you agreed, the trucker must provide the explanation, up front. Your people review that explanation with the billing, and can click to reject or accept. If they accept a higher charge, they can re-bill your client — because the dispute process happens within days of service, not weeks or months afterward.
7. Coding the invoice and data entry.
- The way it has been: Your people spend hours preparing stacks of invoices, and the biggest task is ensuring that each charge is matched against a valid reference number for processing the charge into your A/P system. Then they key in each transaction, key-stroke by key-stroke.
- With the new trucking tools: Every trucker billing is tied to a valid reference number from your system — and the audited, approved invoices flow automatically into your accounts-payable system without any labor whatsoever.
8. Metrics — measuring and managing trucker performance.
- The way it has been: Trucking company performance is determined by hearsay and word-of mouth. No meaningful data exists to manage and improve quality.
- With the new trucking tools: Up-to-the minute records on average time of delivery, dispute history, timeliness of POD entry, etc., are available to your managers at a click. Trucking companies can be held accountable — and rewarded with business — for helping you meet your service goals and reduce your costs.
9. Negotiating the best deal.
- The way it has been: Tariffs arrive by paper, in formats such as Microsoft Word or Excel — with different weight breaks, different accessorial descriptions and different formulas for calculating dimensional weight. Trying to determine which is the best deal for your company is a complex task.
- With the new trucking tools: Trucking tariffs come in more consistent formats that enable meaningful comparison of costs. Tools enable you to compare the total costs for various truckers to handle a large market-basket of shipments.
10. Managing Compliance and Risk.
- The way it has been: Corporate staff chase trucking vendors for insurance certificates, driver qualifications and other documents — and then repeat the process over and over as the documents expire or regulations change. Managing compliance typically requires several hours of labor per year for each trucking company a forwarder does business with.
- With the new trucking tools: The information you need — copies of insurance certificates, bonds, hazmat certificates, driver-level credentials is maintained by the trucker and available for your review at a click. Any time a trucker updates information, the appropriate people at your company are alerted by e-mail.
Sound futuristic? It’s not — it’s all available today.