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What is a Carrier Management System?
A carrier management system (CMS) is a subset of cloud-based TMS systems.
More specifically, it is a Software as a Service (SaaS) platform that allows users to manage the entirety of the carrier process from a centralized dashboard. From selecting the carrier that meets all their needs to negotiating the best rates for various other things.
It is through this dashboard that users can enter shipping information, bid and schedule pick-ups and document negotiated discounts and quite a lot more. Additionally, users can access fuel surcharges, contracts, rate comparisons, and insurance information.
Once all of this data has been aggregated, it provides the shipper with a way to monitor benchmarks in various carriers. Furthermore, it gives the shipper the knowledge to determine which carrier to consider for any given shipping task based on their performance and other customized criteria.
What are the Benchmarks That a CMS can Review?
Arguably the best feature of a CMS is its customizable reporting features. While they are designed to provide shippers with benchmark reporting functions for their carriers, they can be configured to display multiple other types of valuable reports as well. This is not an exhaustive list by any means and it does vary slightly from one platform to the next, but they generally include:
Order Management
Anytime you place an LTL order, the CMS will document all records and vital details of the individual shipment. This includes critical data such as the destination, carrier used, and the individual rates or negotiated surcharges.
Carrier Selection
Once you’re ready to set up an LTL shipment, the carrier selection portal connects to a cloud-based TMS that displays multiple carriers. These carriers are qualified to move your LTL shipment based on the criteria you entered. This unique function gives you the power to determine which type of carrier you’d like to work with. Better yet, it separates them into a pool of qualified candidates!
Financial Review
When the shipment has been delivered, and you’ve received the freight invoice, the CMS has the capability of reviewing all documented charges against the stored data on the CMS cloud. If errors or discrepancies show up, the CMS notifies you. This proactive approach reduces billing errors and can save you a tremendous amount of time and money.
On-Time Delivery Performance
Another measurable metric that helps shippers keep carriers accountable is that of delivery performance. The CMS notes the time of delivery of each shipment and compares it against the estimated or expected delivery window. When late or missed deliveries are found, the profile of each carrier is annotated with this information. Users can then download and review the carrier’s performance records at any time.
This ability is especially useful when it’s time to review contracts for the new year!
Final Thoughts
One of the best attributes of today’s modern CMS is that they are more affordable than ever. They provide shippers with detailed reporting functions, and a robust CMS also helps shippers achieve that perfect load balance.
However, working with an experienced 3PL provider to help you build a stellar CMS is always a smart idea. And if you are looking for a reputable, well-rounded 3PL to help you get your footing in the CMS arena, reach out to us here at Redwood Logistics. Let us put our 20+ years of experience to work for you!