GUEST COLUMN TMS INSIGHTS BY JIM LEROSE
Leverage TMS to Increase Profits he days of single carrier shipping strategies are now considered ancient history. If your company isn’t leveraging multi-carrier TMS (Transportation Management Software) to increase profits, it’s probably missing the boat. Instead of investing in a TMS solution, however, many shop for one based only on price, and that’s a big mistake. Better yet, more advanced TMS solutions are designed to make money (so much that even Jordan Belfort would be envious) and help a company grow. Therefore, it’s best to consider the ROI and investment potential vs. the start-up costs as the dominant purchasing factor. Executives charged with evaluating and implementing TMS solutions on behalf of their companies can be categorized into two groups: the prudent or the investor. The prudent guard their company’s cash box as if it were their own and take great pride in doing so, while the investor lays the groundwork for a shipping solution that practically prints money. The mistake I often see? Executives charged with implementing TMS shop for a solution as if they were shopping for a car. They research it for months, check the features, get confused or frustrated and end up buying the cheapest one. They are the prudent, and they will have their reward, but they are simply not leveraging TMS’ inherent ability to continually beat the competition and increase profits. Rather, they are just looking to save on the purchase price. The next group, the investor, views TMS for what it is: an income-generating machine that 16
MARCH-APRIL 2014 | www.PARCELindustry.com
pays dividends for a generation or more. They are creating a seemingly endless stream of cash flow and contributing toward corporate growth. The problem is philosophical. The first type views TMS as a system required to perform perfunctory tasks such as print carrier compliance labels, international forms and BOLs. They wait too long to get a system and then lament for years because their system can’t deliver the functionality required to properly run their business. Conversely, the second type spends more time and money designing a system that whips the competition, provides endless ROI and possesses an untethered capacity to deploy business rules and functionality that help run their e-commerce business. A high growth e-commerce company has a solid TMS solution. How you view multi-carrier TMS will have a tremendous impact on your company’s bottom line. Here are 10 ways one can be leveraged to help drive revenue, beat the competition, and increase profits: 1. Automated selection of least cost, day definite delivery services among all carriers/all modes — Quicker delivery is an expectation. Heck, the USPS is delivering orders on Sundays to meet changing consumer demand. Better keep up with the changes whether you like it or not. If your company can’t deliver by yesterday, customers will find another e-commerce store that can. One carrier can’t do it all! TMS will help achieve desired delivery objectives and rate shop all carriers/modes including: TL, LTL, regionals, UPS, FedEx, DHL, USPS, couriers, messengers and many more.
A good TMS can quickly add new services that help a business grow. Here are two examples: International Bridge will help increase business in places few consider important such as Alaska, Hawaii, Puerto Rico and US Territories. Vanguard Global saves money and delivers faster while increasing sales into Canada. With TMS, all classes, such as SurePost, SmartPost, DHL Global Mail, CWT, MWT and many, many others, are included in the rate shop. Expect transportation costs to decrease 8-15% or more immediately after a system is in place. 2. Ship from stores — Does your e-commerce company have brick and mortar stores? Can they ship from a single enterprise-shipping platform from those stores while adhering to a company’s business rules or do they use carrier provided disparate systems? Is the critical shipping information visible throughout the organization? Are business rules enforced? Omni-channel commerce is driving growth in this area. A good TMS solution eliminates disparate systems across an entire enterprise, increases shipment accuracy and helps delight customers. 3. Enforce S & H policies — It’s one thing to create shipping policies, it’s yet another to enforce them. Companies lose four to eight percent of shipping spend by not deploying automated enforcement tools inherent in a well-designed TMS solution. 4. Avoid Fees — Accessorial fees account for 30% or more of small packager carrier invoices. Due to the great recession, LTL carriers got serious