Why Should You Use a Carrier Management System?

We all tend to roll our eyes when we hear the phrase “the good old days”.

There is a culture shift happening right now, and it is one that is significantly impacting our daily lives. However, it has also changed the way we do business.

Not too long ago, logistics operations majorly relied on paper files, printed reports, and carbon copies to review the performance and billing of carriers.

Thankfully, technology has revolutionized the way we maintain these files, collect data, and review the performance of those who represent our companies.

One of the most essential audits that any shipper can perform is a performance review of their carriers.

Whether you use parcel shipments, LTL, multimodal, intermodal, or FTL, every carrier makes an impact on your ability to serve customers. If they do not maintain a level of service quality that matches your expectations or provides you financial return on investment, it's essential to make changes before your customers begin working with one of your competitors.

At its core, this is the power that carrier management systems provide shippers today.

In this article, we will explain what carrier management systems are, their uses, and why it is so vital to work with a proven 3PL to help anyone in the logistics arena create a CMS for their supply chain operations.

What is a Carrier Management System?

A carrier management software solution (CMS) is basically an extension of the modern transportation management system (TMS). Its primary mission is to assign, manage, and review the benchmarks and KPI of carriers that shippers often utilize.

This platform is suitable for every industry, specific business types, and generally features customizable dashboards and reporting features that are both convenient and user-friendly.

These platforms make it easy to keep track of fuel surcharges, contract negotiations, on-time deliveries, and various other critical data.

Some of these platforms can even gather instant data from customers or receivers of your shipments. This includes information about hidden freight damage, driver courtesy, professionalism, and other relevant customer service standards.

The CMS is essentially a secondary tool within an existing TMS. This allows a shipper to use one, easy to access, software solution for all their shipping needs. It can be linked with a company's existing transportation management software; allowing them to receive instant rate quotes from multiple carriers. With this information in hand, they can then review those carrier performances with the CMS.

This technology provides a competitive advantage for the shipper, by ensuring they picked the right carrier for the right job. No beating around the bush and no need for last-minute changes.

Today's modern CMS can review multiple key performance indicators (KPIs) for carriers. Some of these indicators include:

Carrier Performance

When you hire a carrier to deliver products to a customer, certain performance indicators are important. Ensuring that the delivery arrives on time is the most important performance indicator.

The CMS Receives input from the customer and the carrier about on-road performance. It then compares the data to ensure consistency. If discrepancies are found, it can notify you through email or other customized communication preferences. This allows you to perform an accurate follow up with the customer.

Shipping Delays

Most carriers utilize GPS tracking to allow shippers to review the status of their deliveries in real-time. The CMS can collect this data and review any shipping delays – whether it’s related to traffic, the elements, or driver restrictions.

A CMS only records the facts. However, if the information provided to you does not match the data from your CMS, this is a red flag, and it is a cause for concern.

Freight Bill Auditing

One of the most crucial carrier performance indicators is that of accurate billing.

Each carrier is assigned with specific, negotiated contracts including fuel surcharges, delivery rates, and other items.

If the information noted on an invoice is not accurate in comparison, the carrier management software alerts you to this. This alert allows you to determine whether the mistake was indeed an error or an intentional change.

Final Thoughts

A carrier management software solution can be optimized for a specific business type, industry, and type of carrier. The best resource available for the customization and implementation of a carrier management system is an excellent 3PL service.

Redwood Logistics has years of experience creating customized CMS for logistics companies, those involved in the supply chain, or anyone needing to keep their carriers accountable. Our real-world experience and up-to-date technology give our clients a competitive advantage for monitoring the performance of carriers who represent their brands.

Contact the experts at Redwood Logistics today and let us help you integrate a CMS for your supply chain!