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Guide to Effective Transportation Management

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Transportation management is more complex today

than ever before. In order to get products from Point

A to Point B, shippers must navigate tight capacity,

an on-going driver shortage, retail compliance

issues, growing expectations for fast and affordable

deliveries… the list goes on.

At the same time, manufacturers, retailers and

ecommerce companies alike face relentless pressure

to control costs – an increasingly difficult task since

transportation expenses represent almost two-thirds

of total logistics costs.

To succeed in this challenging environment, shippers

need to thoroughly understand these complexities

and develop strategic transportation solutions to

address them. The following guide is intended to

offer support for this process.

Guide to Effective Transportation Management

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Distance

The distance your freight must travel is a key consideration when determining the best mode of transportation.

Typically, options are as follows:

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When planning for an optimal transportation management solution, it can be helpful to consider the following factors.

5 Factors to Consider for Effective Outbound Transportation

There are many variables to consider, but, as a rule of thumb, the longer the distance, the longer the time in transit and the higher

the transportation costs. (Learn more about the current trend toward shorter lengths of haul on page 4.)

The need for final-mile services also impacts shipment cost. With the growth of ecommerce and omnichannel, demand is

increasing for store deliveries, home delivery, white-glove and haul-away services. While the distance varies, these services

cover the last leg of transportation and usually take place closer to the consignee.

I N T E R N AT I O N A L

ocean, air, rail, parcel

C RO SS-CO U N T RYtruckload (TL), multi-stop TL, less than

truckload (LTL), rail/intermodal, air, parcel

R E G I O N A L (<250 M I L E S)

truckload/LTL, parcel

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Location

The point of origin for your shipments also plays a critical role

in transportation decisions, so it is important to choose your

distribution nodes carefully. For some companies, it can be

beneficial to be located near a manufacturing plant. However,

a growing number of companies are positioning distribution

centers in close proximity to their end customers to help reduce

transit time and cost.

When selecting the exact location of your distribution facility,

look for sites that offer convenient access to ports, rail hubs

and/or major interstates as well as readily available labor. For

full truckload or less-than-truckload shipping, it is also wise

to consider ease of backhauls to make your shipments more

appealing to carriers.

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5 Factors to Consider for Effective Outbound Transportation

Transportation Trend: Shortening Length of Haul

Today, many companies are reevaluating their distribution networks with an eye toward shortening their length of haul. Pressured

by expectations for fast, low-cost deliveries and increasingly tight capacity, they are looking for ways to reduce transit time and cost.

Instead of servicing customers across the country with just one or two DCs, they’re moving to multi-node distribution networks

that put products closer to their customers. This enables them to provide one- or two-day deliveries utilizing more cost-effective

ground service.

In addition to reducing transit time and cost, this strategy can make it easier to find carriers – particularly in today’s tight freight

market. Short-haul loads are usually easier for carriers to cover because they don’t require drivers to be on the road for days or

weeks at a time.

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Freight Shipping Patterns

Frequency and average shipment volume also play an

important role in transportation decisions. Significant spikes in

volume can make freight management especially difficult. It can

be helpful to analyze historical shipping data. Understanding

your typical usage patterns and trends will make it easier to find

a transportation solution that meets your needs.

For example, if you routinely send truckload shipments cross-

country, intermodal shipping may be effective. If you’re shipping

a significant volume of small packages to the same destination,

LTL could be a better option than parcel. If long-haul, multi-

stop loads are routine, it might be time to consider utilizing a

transload option to split up the line-haul and deliveries.

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5 Factors to Consider for Effective Outbound Transportation

Transportation Technology

Today, there are a wide variety of tools available to optimize transportation. Following are a few of the most common:

› Transportation management systems (TMS): A robust system can provide real-time visibility, route optimization and shipment

tracking as well as reporting capabilities.

› Parcel analytics software: If you send a high-volume of parcel shipments, reviewing historical data can help you identify

opportunities to increase efficiencies and better manage your parcel spend.

› Rate-shopping software: A function of multi-carrier shipping software, this tool can help to identify the most economical solution

to meet transit expectations.

› Load-optimization software: By planning and building loads strategically, you’ll make the most of available trailer space

and maximize cube efficiency.

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Shipment Specifications

Think about the nature of your typical shipments. Do

they require refrigeration or special handling? Are

they time-sensitive? Is shipment tracking important?

Do you need to consider retail compliance issues?

You’ll want to communicate this information to your

carrier up front.

You also need to consider the size and weight of

your shipments. If you are shipping truck or container

loads, your goal is to fit as much cargo as possible

in a trailer or container without exceeding its weight

limit. Take into account irregularly sized items, limits

for stacking height, etc. Online cube calculators and

load optimization software can help to maximize

cube efficiency.

If you are shipping small parcels, such as individual

ecommerce orders, you will most likely use parcel

shipping or LTL. Keep in mind that dimensional weight

rates are commonly used to determine freight rates

for lightweight shipments. DIM weight is calculated by

multiplying the length, width and height of a package

and dividing by a predetermined divisor.

Desired Speed

It’s no secret that expectations for faster shipping are

growing at warp speed – for both B2B and B2C shipments.

Thanks to Amazon, same-day, one-day and two-day

shipments are quickly becoming the gold standard. For

long-distance shipments, air or parcel service is required

to achieve this service level, and those rates can quickly

erode slim profit margins. As discussed earlier, local

delivery service is an option if your distribution nodes

are in close proximity to your customers.

It is important to balance the need for speed with cost.

Shipping every order with expedited service is simply not

economical for most companies. In many cases, receiving

an order when expected is just as crucial as speed. The

key is to provide the level of service your customers

expect – reliably and at the lowest possible cost.

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5 Factors to Consider for Effective Outbound Transportation

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Why It Pays to Be a Preferred Shipper

The more loads a carrier can haul in a day, the more

productive and efficient they can be. In a tight freight

market, carriers can be selective about which loads

they take. They are more likely to choose your freight

over others’ – and may even offer you better rates – if

they know you’re easy to work with.

“Preferred shippers” (also called “shippers of choice”)

help carriers to be more efficient and better utilize their

assets. Want to achieve this status? Consider adopting

a few basic strategies:

› Tender loads in advance whenever possible

› Be flexible when arranging appointment times

› Utilize drop trailers if possible

› Keep the lines of communication open

› Facilitate quick loading and unloading

› Make drivers feel welcome

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Once you’ve identified your transportation needs, you can begin

to determine the best transportation solution to meet them.

In-House vs. Outsourcing

If you have consistent freight needs and a knowledgeable

transportation department, you may opt to manage transportation

in-house, using your own fleet or establishing relationships

with carriers. This option gives you complete control over

your shipments, but it can be time-consuming and costly.

More often, shippers look to third-party logistics providers for support. They’re likely to utilize a 3PL for some or all of their

transportation needs. In fact, 74 percent of shippers outsource domestic transportation, according to the 2021 Third-Party

Logistics Study.

What drives so many shippers to outsource transportation services? As a rule, third-party providers offer the benefits of a

transportation department without the overhead investment.

Thanks to economies of scale, 3PLs give you greater buying power and the flexibility to accommodate fluctuations

and navigate capacity issues. An experienced provider with established resources can also offer top-tier technology

solutions (see page 5) and the ability to support multiple distribution nodes. 3PLs that provide integrated services, such as

warehousing and fulfillment, allow you to have a single point of contact for all your logistics needs.

What is My Best Option for Managing Transportation?

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If you choose to outsource, you’ll need to determine the best transportation solution to meet your needs. The most common

options include:

Fleet Services

Asset-based 3PLs have their own fleets available to handle

regional shipments as well as short-haul and shuttle services.

This resource can be particularly valuable when the freight

market is tight. If you routinely ship full truckloads, it may

make sense to look for a provider that can offer committed

capacity or a dedicated fleet.

Brokerage Services

3PLs can also work with other carriers to find the best options

for your shipments, via ocean, air, or land. They can handle all

of your freight or just occasional shipments. Qualified 3PLs will

typically offer route optimization, track and trace, reporting,

auditing and bill pay services.

Parcel Services

Shippers with a high volume of small packages often look

to 3PLs for help with parcel management, including carrier

management, information support, technology resources

and more.

Total Transportation Management

An expert 3PL can manage your entire transportation portfolio,

overseeing everything from strategic planning to carrier

selection, rate negotiation, route optimization and more. This

can be an effective option if you have limited resources or

transportation is not your core competency.

What Kind of Transportation Solution Do I Need?

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3PL Checklist

Before selecting a 3PL for transportation services, it is important to research your options carefully. Ensure that your

preferred provider offers the following:

Asset– and non-asset-based options – Having

access to a fleet as well as brokerage services will

give you flexible capacity to handle any shipment.

Established carrier relationships – With strong

relationships already in place with carriers, your 3PL

will be better able to find available capacity when

and where you need it.

Multiple fleet locations – With a growing trend

toward multi-node networks, it is important to have

fleets in position to transport products to customers

as efficiently as possible.

Top-tier technology – Make sure that the provider

you select offers robust systems and software to

ensure optimal performance.

Range of service offerings – A 3PL that offers

warehousing and fulfillment services, as well

as value-added capabilities, can streamline

your supply chain and increase efficiencies.

Stability – A provider with longevity and a solid

reputation in the marketplace is more likely to

be a long-term partner you can trust.

Satisfactory on-time performance and

safety ratings – Confirm that your provider’s

fleet and/or other carriers consistently

demonstrate strong performance.

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sales@sclogistics.com sclogistics.com

3010 Saddle Creek Road Lakeland, FL 33801

863-665-0966 Corporate866-668-0966 Toll Free

Looking for a Transportation Partner?

At Saddle Creek Logistics Services, we provide full-service transportation solutions

you can rely on. We take pride in getting your products where they need to be –

quickly, accurately, and cost-effectively. Contact us today to learn more!