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Transport Management – Strategies to Improving Transport Processes in 2024

by Jill Quijano,
Feb 15, 2024
ultimate guide to transport management
ultimate guide to transport management

Table of Contents

Transportation is an important aspect of the supply chain. It ensures the smooth flow of goods across borders, ensuring it reaches its destination.  

With an efficient transport strategy, businesses get to tap into new markets, manage costs, and boost their reputation. 

Transport management, however, has become a more complex undertaking as the integration of new tech and customer demands continue to reshape its landscape. Not to mention key challenges such as labour shortages, the pressure to cut costs, rising fuel prices, the list goes on. 

To ensure you’re staying ahead of the curve, we’ve prepared a guide to understanding these complexities and creating smart solutions to tack them.

What is Transport Management?

Transport management isn’t just about planning the movement of goods. It’s an entire cycle of its own: 

  1. Order management – The transportation process starts with a shipment order.
    It involves various tasks, including capturing orders, processing, scheduling, and generating necessary documentation to ensure compliance.
  2. Selecting the mode of transportation – Engaging with transportation providers, including trucking companies, shipping lines, airlines, and the like.
  3. Route optimisation – Analysing the best routes by considering factors like distance, traffic, and fuel efficiency.
  4. Fleet managementTransport management also requires an operational angle. You’ll need to ensure your fleet is properly maintained and deployed to meet your transportation goals.
  5. Regulatory compliance – Another operational aspect of transport management is compliance. There are laws that govern transportation at local, national, and international levels.  

The Role of Transportation in the Logistics Process

It’s worth noting that transport and logistics are not the same.

Logistics encompasses a broad range of activities, including storage, distribution, and transportation. The goal of logistics is to deliver the right materials to the right customer at the right time and place.  

Transport plays a critical role in the logistics process. Basically, without a means of transport, the wheels – literally and figuratively – won’t start spinning.  

Efficient transport management provides a competitive advantage. This is why more companies are investing in solutions that provide efficient and error-free service to end customers.  

In-House vs. Outsourced Transportation Management

Businesses with freight management expertise may choose to handle transport internally. A clear benefit of keeping your transport in-house is the control it provides. You get a complete overview of your operations and ensure you fulfil deliveries efficiently.  

While this all sounds enticing, the cost of maintaining in-house transport operations might hold you back. Owning and maintaining a fleet will only cost you more in the long run. Not to mention you need to constantly hire and train new staff as your business grows.  

Consequently, it’s extremely helpful (and cost-efficient!) to outsource your transport needs. You pay a fixed rate that largely depends on the type and frequency of your transport requirements.  

As you scale, you can flex up or down, depending on your customers’ demands.  

Key Challenges and Opportunities in Transportation Management

key challenges and opportunities in transport management

It’s hard to name an industry that has yet to feel the brunt of the supply chain crisis. Transportation is what drives most industries to move and work. Not to mention rising consumer expectations catapult the industry to new levels of complexity.  

Understanding these challenges help you proactively address them head-on: 

1. Driver shortage

Truck driver shortages have been rampant since 2018 and the numbers are still looking bleak.  

In 2023, more than three million truck driver positions across 36 countries remain unfilled. If you think that doesn’t sound so bad, the shortage is predicted to double by 2028! 

There are various factors contributing to driver shortage, among them are: 

  • High turnover rates from working conditions;  
  • perceived safety concerns; 
  • training and licencing requirements; 
  • And alternative employment opportunities aggravate driver shortage worldwide. 

The solution: Invest in your drivers 

Let’s face it, truck drivers do not have it easy. There are a lot of health and safety risks tied to the job.  

Investing in better pay, benefits, and training will get new drivers behind the wheel.  

While these strategies entice new recruits, you’ll also need to improve the driver experience to retain your workforce: 

  • Ensure driver safety: Maintain trucks in excellent condition and schedule regular inspections.
  • Communicate with your drivers: Let them know that you value their feedback by asking about their on-road experience. Reciprocate by providing constructive feedback on their performance.
  • Recognise top performers: Like any employee, drivers that go above and beyond deserve recognition. It’s also essential to establish key performance indicators so you’re working towards a shared goal.
  • Leverage technology: GPS devices and transport management systems help drivers optimise routes, take safer roads, and minimise any delays.  

Investing in engagement is a more cost-effective solution than recruiting new drivers. When your employees feel valued, they’re more likely to stay and exceed their targets.  

2. Infrastructure Constraints 

Now here’s a challenge that Australian businesses can relate to.  

Australia’s vast geographical area and population distribution poses several logistical challenges, especially for long-haul transportation. Not to mention Australia’s infrastructure, including its roads and ports, hamper the movement of goods.  

While the Australian governments has launched initiatives to improve road and rail infrastructure, including the Inland Rail project, there are also steps businesses can take to overcome infrastructure roadblocks today.  

The solution: Efficient route planning 

Hire skilled route planning experts to find the best paths for transporting cargo. Also, consider surveying common routes to check for any obstacles and make changes as needed. 

Route optimization software helps you maximize transportation efficiency. Instead of personally surveying areas, a robust system provides you with route details in real time. It also helps you find alternative routes amid infrastructure disruptions.  

3. Managing transportation costs 

Transportation costs are consistently rising. Fluctuating fuel prices, labour and equipment costs, and liability premiums contribute to the never-ending budgetary pressures.  

For companies, reducing transportation costs is always a top priority.  

Now, there are several ways to lessen logistical expenses, a chunk of which tie into investing in the right solutions. 

The solution: Leverage transportation software 

As with any industry, tech plays a crucial role in driving efficiency. It’s no different for transport.  

Technological advancements, for example, allow shipping companies to improve customer relations. Many of them leverage real-time tracking visibility, allowing customers to conveniently track their packages. It also automates otherwise tedious manual processes, resulting in better shipping accuracy.  

When scouting for tech to reduce freight costs, consider the following features: 

  • Route optimisation to reduce fuel and vehicle maintenance costs. 
  • Eliminate paper processes and reduce the risk of costly delivery errors with sign-on glass technology (proof of delivery).  
  • Load planning to maximise delivery runs.  
  • Scheduling features to plan transit times. 
  • Invoice automation to improve cash flow. 
  • Customer self-service portals to improve communication. 
  • Fuel levy to cover the variance of rising fuel costs. 
  • Advanced analytics to help you forecast demand and make data-driven decisions that improve operational efficiency. 

In summary, the right tech and solutions partner are essential to sustainably reduce costs in the long run.  

4. Changing consumer expectations 

In the age of the internet, customers expect instant gratification.  

They want faster delivery timelines, real-time updates, and better service quality. They’re also willing to pay extra to expedite freight delivery, such as same-day shipment services. 

 Businesses like Amazon already offer one-hour delivery in certain locations, amping the pressure for companies to keep up.  

All these call for a need to innovate and optimise every step of the transportation process to meet consumer needs.  

The solution: Flexible delivery options and proactive customer service 

Give control back to your customers by offering flexible delivery options.  

For example, 90% of shoppers are willing to wait longer for a delivery in exchange for free shipping. Similarly, consumers would spend more to qualify for free shipping. These numbers tell you that shoppers want better control over their shipping options.  

Flexible delivery options may also pertain to the time and date of delivery or alternative pickup points. Providing flexible options helps you cater to diverse consumer preferences.  

Of course, even the most robust transport strategies are prone to unexpected roadblocks. So, make sure your team is equipped to handle them.  

Train your customer service representatives to actively identify and solve problems before they escalate. Also, provide customers with various communication channels, including phone, email, chat, and social media. 

What are Transport Management Systems (TMS)?  

transport management systems

A transport management system or TMS is a platform designed to facilitate the incoming and outgoing movement of goods. It automates transport processes and provides insights to help you optimise routes and reduce spend on future shipments.  

Now, there are several moving parts in the shipping process. A TMS removes these siloed processes by providing a detailed overview of your operations and allowing you to manage them in one place. It also helps you stay compliant with transportation regulations and industry requirements.  

Why do you need a TMS?  

Here’s the thing: All the features we mentioned above, from route optimization to load planning are achievable with a good TMS.  

The broad and minute details provided by a powerful TMS leads to more efficient transportation planning, execution, and documentation. This all leads to greater customer satisfaction and business opportunities, improving your bottom line.  

Transportation Planning 

Transport management systems provide order information to key stakeholders, including managers, drivers, and customers. It captures details such as the item’s weight, current location and destination, and commodity type.  

Planners and drivers can then utilise a dashboard to access created orders, routes, and assigned transports. This allows them to evaluate their workload for the day.  

As drivers update order statuses during transit, managers receive real-time insights into schedule changes and fleet locations.  

Transportation Execution  

Fleet management is central to optimising transport operations. While not all TMS providers offer advanced fleet management features, a dedicated platform enables you to manage dispatch, monitor fuel consumption, record maintenance, and handle financial settlements in one place. 

Additionally, a TMS can integrate with other platforms like a Warehouse Management System or Yard Management System, giving you further insights into warehouse and transportation constraints.  

Furthermore, a TMS automates tasks such as generating digital bills of lading and invoices. These features reduce administrative burdens that come with transportation management. 

Transportation Visibility  

Transportation doesn’t end with a successful delivery. A TMS supports businesses by showcasing fulfilled and ongoing orders on predefined reports.  

TMS also provides real-time analytics that anyone from the transportation team can generate for their needs. For example, you can look at DIFOT performance to measure the efficiency of your overall supply chain. You can also get a cost analysis by carrier, helping you get the right service at the best price.  

What Does the Future of Transport Management Hold? 

Transport management often gets skewed by several factors, from freight volume to environmental factors. To satisfy demand and comply with regulations, businesses need to abandon complicated and time-consuming processes. 

Simply put, shippers and carriers must automate to survive. The good news? The technology is readily available and is rapidly evolving.  

If you’re in the market for a reliable TMS provider, look no further than TransVirtual. With a proven track record in Australia’s logistics sphere, our advanced transportation solution offers unparalleled reliability and performance. Talk to our experts to assess if we’re a best-fit partner for your business today.  

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