In the fast-paced world of logistics and supply chain management, efficiency and accuracy are critical to the movement of goods.
Transportation management systems (TMS) are at the forefront of ensuring that freight logistics and transportation processes run like well-oiled machines. However, one of the key benefits of a TMS lies in the analytics it provides. Data offers businesses a powerful tool, both for managing day-to-day operations — and strategically planning for the long haul.
TMS analytics can be harnessed to improve strategic planning and drive operational efficiency. Whether you’re already using a TMS or considering its adoption, understanding its strategic potential is critical to staying ahead in the dynamic world of logistics.
Understanding TMS analytics
Many TMS solutions come standard with an analytics dashboard. This dashboard takes raw transportation data gathered within the TMS from the normal course of rating, booking, tracking, and communicating with carriers and converts it into actionable insights. These metrics may relate to a range of areas, including real-time statuses, carrier performance, historical costs, and more.
Analytics dashboards often track various key performance indicators (KPIs) that are essential for monitoring and managing transportation operations. These KPIs could include on-time delivery rates, load acceptance rates, costs per mile, and inventory levels. Often, they’re customizable, and entirely bespoke reports can even be crafted with the help of the TMS vendor’s support staff.
How accessing data in a TMS works
World-class TMS platforms will have dedicated reports and dashboards accessible within the same login as the routine rating, booking, and tracking capabilities. It will provide a seamless experience for logistics professionals to move from their everyday operations to a strategic view of their entire transportation operation.
In addition to the expected charts and tables of data, including information like dates and shipment identifiers, you may also get data visualization within a TMS. These visualizations can take the form of heat maps and geographical maps, making it easier to see insights at a glance rather than needing to manipulate tables to understand the message.
To ensure that a TMS platform’s dataset is as robust and complete as possible, many shippers will opt to connect their various other internal systems, such as an ERP or WMS. This will bring a comprehensive view of the entire logistics network from the time an order is placed to when it is delivered. More data connected to the TMS enables better insights on the analytics end.
Streamlining transportation with data
By leveraging actionable reports and dashboards, businesses can pinpoint inefficiencies, understand root causes, and implement strategic changes to optimize performance. Here are some ways TMS solutions help shippers make strategic improvements with data.
Identifying cost drivers
Detailed reports on transportation costs help shippers understand where they are spending the most on freight, with which carriers, on which lanes, and to which customers. This insight can be pivotal in identifying cost drivers and inefficiencies inflating operational expenses. It can also be used to better quote a customer on future transportation costs.
Carrier selection
Data-driven analytics help shippers choose the most cost-effective carriers based on past performance and historical data. This set of analytics enables the assessment of how each carrier is performing against set service agreements. They help you track delivery times and ensure that carriers are meeting their service level agreements.
By continually reviewing this data and conducting new RFPs via the TMS when carriers are not performing adequately, businesses can save significantly on transportation costs while also improving delivery times and service quality.
Negotiating better rates and contracts with carriers
It’s much easier for shippers to enter contract negotiations with carriers when they have a clear understanding of their transportation needs, the average industry benchmarks, and the historical performance of the carrier in question. This informed approach can often help yield more favorable rates and terms with transportation providers.
With data at their fingertips, logistics professionals can go to their carriers and ask for lower rates or improved service based on historical trends and industry averages. This saves money and helps to facilitate easier conversations with strategic partners.
Mode selection
The ability to analyze which routes and transportation modes have historically provided the highest efficiency and lowest cost allows for intelligent mode selection. Many TMS platforms also help shippers by providing real-time benchmarking data on rates to help them make better choices on which mode to book. When a shipper can see the big picture, they can make the strategic choice to change modes or add services. This could mean increasing LTL transportation or adding managed transportation services for route optimization.
Best practices and challenges
While the potential for transportation management system analytics in strategic planning is significant, there are several best practices and challenges to consider for their effective use.
Best practices
- Set clear objectives for data analysis
- Establish relevant key performance indicators (KPIs)
- Engage in ongoing data analysis and interpretation
- Provide regular training for staff on data analysis
- Stay updated on the latest best practices in data interpretation
- Ensure insights derived from analytics remain actionable
Challenges
- Ensuring high-quality data sources
- Overcoming data integration challenges across different systems
- Avoiding inaccurate insights due to poor data quality
- Obtaining buy-in and support from all organizational levels
- Implementing strategic changes based on analytical insights
Get started with a simple-to-use TMS
Interested in getting your own data-backed insights directly within your own TMS? Check out ShipperGuide TMS for end-to-end visibility and control of your carrier network. Get reports, dashboards, and visualizations of your logistics network directly within ShipperGuide alongside the daily functionality you need. Contact Loadsmart to learn how ShipperGuide TMS can start your journey toward more streamlined logistics management.
FAQ
Data analytics in transportation is used to gain insights into carrier performance, mode utilization, costs, and lead times to help shippers manage resources efficiently and improve the decision-making processes. It involves analyzing large data sets from various sources to identify trends, patterns, and areas for improvement.
A transportation management system (TMS) is a software platform that helps companies plan, execute, and optimize the physical movement of goods. It streamlines processes such as RFPs, carrier selection, shipment tracking, and analytics.
Analytics is transforming the transport industry by enabling data-driven decision-making, predictive maintenance, real-time tracking, and improved customer service. It provides valuable insights into supply chain performance, helping companies reduce costs, increase efficiency, and enhance overall operations.
