STORY INLINE POST
The global logistics industry is still facing the aftermath of what many call the “Great Supply Chain Disruption” from the pandemic — strain from cross-border shipping delays, looming driver shortages (in international and domestic flows), fluctuating consumer prices and more. A recent survey of freight brokers showed they are pessimistic about acquiring and retaining customers for the remainder of 2022 due to facing ongoing challenges regularly.
In a time when the industry is stretched beyond capacity, service level requirements keep increasing, and transportation spend is rising, implementing a Transportation Management System (TMS) and Managed Transportation Services (MTS) with a logistics partner is essential.
TMS and MTS providers are revolutionizing important tools for shippers that will allow them to achieve real-time visibility into shipment tracking and offer access to performance data and analytics. This next wave of TMS technology is designed flexibly, able to suit the needs — both in terms of capabilities and costs — of different-sized shippers. Logistics vendors will also give their customers access to a broader freight network which, in turn, could improve collaboration among shippers and carriers and boost overall business performance.
Working with providers that have these solutions under one platform will be key for shippers that need to integrate and deploy TMS technology efficiently and effectively. As shippers adopt TMS solutions, they will need to seek vendors with access to a large network of shippers, carriers and freight, as well as knowledge of shipping pain points and the operations side of a shipping business.
To successfully implement these solutions in Mexico, shippers should focus on the following areas:
Aligning Shipper and Logistics Partner Visions
Commitment must be at the heart of the relationship to create long-lasting partnerships between shippers and their logistics partners. This allows complete alignment on projects across departments and functions. It’s also important to align with what’s in and out of the shipper’s scope. This reduces friction and resistance internally, and with the logistics partner for implementation and ongoing work. Lastly, clear communication from the organization’s leadership of their vision, goals, and expectations when implementing the TMS and MTS is key to avoiding and reducing internal resistance to change.
Taking Time to Ensure a Logistics Partner is the Right Fit
Shippers want to ensure they select the most cost-effective, reliable, and trustworthy choice for moving goods and exceeding the expectations of their customers. To find the right partner, shippers must invest in the right resources and allow ample time for partner selections. A deep-dive review of the provider’s current operating system is a crucial step — including their business rules, processes, expectations, and execution team — to understand the vision, mission, culture, and values at hand. They should also have an up-front understanding of connectivity points among their systems, such as the information flow between their TMS and ERP.
Creating a Checks-and-Balances Mechanism
The shipper-provider relationship starts with creating a contractual agreement with clear conditions and alignment. Establishing a master agreement as the baseline of the contract’s general terms is crucial, including the scope, fees, service, and clearly defined KPIs (Key Performance Indicators). This will provide an agreed-to starting point to make operational adjustments over the life of the contract. It’s paramount to have a correct and fair balance between service and savings and to implement an operational framework that encourages continuous improvement.
Developing a Comprehensive and Inclusive Implementation Strategy
When implementing a logistics platform and partner, the shipper must involve subject matter experts and project managers with the business knowledge and skills to guide the company successfully. They will be critical to resolve conflict, reach agreements, and build effective teams to accomplish objectives.
Additionally, clear communication and transparency of technical data, business rules, and operational and financial requirements will ensure that the current state of execution is fully understood and that the future state can be designed correctly. This involves mapping the supply chain to visualize and design appropriate hand-offs between stakeholders.
Lastly, training of the new TMS needs to be exhaustive and inclusive of primary users, vendors, suppliers, and carriers to ensure successful adoption in the initial stages. A logistics partner with a deep bench of cross-functional expertise can help bring a unique and valuable perspective to streamline the learning curve and increase project adoption and success.
Nurturing an Ongoing Relationship
Conducting monthly and quarterly business reviews to manage projects and initiatives can help nurture and grow the relationship between shippers and their partners. Having open, honest, and constructive conversations ensures both parties are heard while identifying what’s working and what’s not within systems, processes, and teams. The goal is for shippers and logistics partners to continue learning from one another and growing so they can better face the challenges ahead.
As global shippers continue managing through the “Great Supply Chain Disruption,” these recommendations will enable them to develop long-term partnerships with their logistics partners and create a more resilient supply chain for the future.