The Business Value of Managed Transportation Services
Shippers are turning to managed transportation services (MTS) to help address logistical challenges. Here are the advantages.
The mantra of today’s freight market is "survival of the fittest," as driver shortages, capacity imbalances and government regulations continue to impact transportation costs. These challenges are further being complicated by consumers demanding greater product variety and availability at the lowest price, which puts pressure on an organization’s already strained supply chain. That’s why many organizations are turning to managed transportation services (MTS) to help address their logistical challenges.
MTS + TMS = A True Logistics Solution
By partnering with a third party to plan and execute freight moves on its behalf, a shipper can leverage the provider’s team of logistics experts to manage those moves instead of using its own internal personnel. They can also leverage the provider’s entire network as well as its investment in emerging technologies without having to make internal investments.
An MTS partner can provide additional value by offering its own proprietary transportation management systems (TMS) and other advanced solutions. Combining transportation management, strategic capacity and other trade services can give shippers greater control over transportation operations, enhance shipment visibility and improve supply chain performance. According to ARC Advisory Group, MTS can save shippers between 2% and 10% on transportation spend.
Bringing Clarity to Cloudy Visibility
Companies want to secure capacity at below-market rates while delivering high service levels. They need to know where their equipment is at all times and whether loads will arrive on time. An MTS provider can also address the visibility challenges many shippers face today in order to achieve those goals.
MTS removes the guesswork through advanced technology that automates previously manual processes. With the digitization of the logistics industry, shipments are monitored by algorithms; capacity is secured via online automated auctions; and scorecards and KPI reporting are distributed automatically each day. An MTS provider also has logistics experts ready to intervene and manage the logistics process to help ensure quality service, provide greater predictability and lower total costs.
Benefits for Each Member of the C-Suite
MTS is beneficial for all stakeholders—from logistics managers to CFOs to CEOs. Here are some of the benefits to each:
- Logistics Managers – Shippers save time and money by leveraging the MTS providers’ transportation networks, prices, technology, capacity and economies of scale. Instead of juggling activities across 75 different carriers—plus their own network providers—logistics pros simply have to work with a single partner.
- CFO – As transportation becomes a larger line item in a CFO’s budget, an MTS provider combines world-class technology and freight management to take over the management of those networks and deliver ROI within a year or less.
- CEO – With an eye on the bottom line, partnering with an MTS provider alleviates many of the business performance and operational headaches associated with transportation that were formerly handled in-house, draining time, staff resources and budget.
The Time for MTS is Now
MTS will continue to play an increasingly important role in the manufacturing and distribution industries, both of which have been hit hard by government regulations, capacity issues, rising fuel costs and ever-shrinking delivery windows. Now is the perfect time to engage with a reliable MTS partner.