What is Carrier Management?
A shipper-carrier relationship is at the core of a logistics program. To make things available to the end customer at the right place and the right time, you—as a shipper—depend on a carrier. At Trax, we use ‘carrier’ as a term that also encompasses logistic service providers (LSPs) and third-party logistic providers (3PLs).
Shippers often work with several carriers to transport goods to multiple destinations, sometimes even globally. You need optimized carrier management systems in order to grow your business and remain competitive.
The Definition of Carrier Management
Carrier management is a division of transportation that enables businesses to monitor and manage carrier performance through carrier scorecards, contract and rate management, and claims management. It offers visibility via analytics, aids in critical business decision making, and improves collaboration with your carriers. Carrier management software is the modern way to see critical data and ensure customer satisfaction.
Carrier Management + Transportation Spend Management Maturity
As industry experts, we view carrier management as an important component of the Trax Transportation Spend Management (TSM) Maturity Model. This model is a framework that provides a roadmap for large, global enterprises to go from a lack of visibility and control to a fully optimized and accurate data-based transportation supply chain.
Effective Carrier Management
Effective carrier management helps you to both reactively and proactively manage your carriers’ performance and relationships with greater confidence and lower disruptions to your business objectives. If your primary mission is to streamline operations for everything from contract negotiations to on time deliveries, you need a carrier management system. With it, you get an agile supply chain with enhanced future-proofing and better response to transportation issues that may arise.
Importance of Carrier Management
It’s crucial to assess your transportation spend management scalability in order to accommodate your business’s growing needs. Carrier management software supports this essential function for companies that have grown beyond needing more than just freight audit and payment (FAP) solutions for their broader scope of operations.
A freight audit and payment system includes invoice processing and payment automation, eliminating duplicate invoices (as well as uncovering various other critical data points), accruals on bills received but not paid, etc. Basically, freight audit helps to find a dispute and report it. However, when a business has matured, the needs extend beyond just the basic FAP services. It’s essential for seasoned businesses to grow to more comprehensive and efficient carrier management and financial management. This enables your team to meet relevant customer service standards, avoid negative outcomes from things like hidden freight damage, maintain best practices, and do it all leveraging the latest tools and technology.
Carrier management encompasses three critical functions that fortify your business with better efficiency and significant cost-saving opportunities.
A carrier scorecard is a tool that helps break down carriers’ qualitative and quantitative attributes to evaluate performance through predetermined KPIs. The KPIs that your company selects to align with your business objectives help assess carriers on a monthly, quarterly, or yearly basis. Some examples of KPIs include: on-time pick up and delivery, invoice accuracy, and data quality. Using insights from carrier scorecards helps build strong relationships with your carriers—you gain visibility into processes for both you and your carriers. At Trax, we believe that “you can’t control what you can’t see”, meaning that data and visibility aid in improving efficiencies, achieving optimization, and directly impacting the bottom-line.
Comprehensive carrier management also focuses on contract compliance. Trax helps you optimize your processes and ensure contract compliance for better control of your transportation costs. Invoices that align with your contract terms are crucial—fees and other charges that don’t align with your contract are money wasted. Because every company’s needs and transportation logistics are unique, personalization of your carrier management solution is vital. For example, Trax consults with our clients on the types of relationships that you want to build with shippers to maximize performance, boost your customers’ experience, and minimize costs and risks.
Claims handling and resolution are often more important than businesses realize. Efficiently handling disputes and claims is necessary for your customers to have a good experience. For instance, when your customer orders a product and doesn’t receive it, your company ships it again in favor of customer service. But, that leaves your company with the tedious process of claim resolution: finding the shipping notification, bill, or other documents to prove the cause of error, submit it all for review, etc. Often, such instances are written off as a loss, which is an additional cost for the company. Over time, it adds up to major financial losses.
A more mature company, on the other hand, would file the claim and then have dedicated staff to recover such losses. However, that often becomes an operations efficiency problem. Now take a company that is fully matured and optimized in transportation spend management. Such a company eliminates mistakes and increases accuracy in the verification processes. We pride ourselves at Trax in being able to offer this level of maturity so you have faster and successful claims resolution. This frees up your resources and funds for other tasks important to your business, and also helps you to continue prioritizing a great customer experience.
Carrier Management With Trax
At Trax, we are industry experts in facilitating transportation spend management maturity for global organizations. Our clients include leaders across all industries, and our solutions are best in class, supporting success on every front. TSM with Trax is a holistic endeavor, and we provide end to end support to ensure you get max benefits. This includes absolute visibility into every process; absolute understanding of strengths, weaknesses, and opportunities; and skillful implementation of a platform that will makes sales and service easier.
This isn't an overnight process, but, once you achieve maturity in transportation spend management, you will unlock the right solutions to support your business goals. In any industry, carrier management is improved with TSM tools.
To learn more about the right technology can catalyze your business toward transportation spend management maturity, contact us today.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.