As a consumer, it is helpful to know when a package you order will arrive. For instance, if it is a last-minute gift, it could be essential for the order to arrive on time exactly as promised. Your freight shipment arriving when you expect it to is no less important, and having your finger on the pulse of your shipping network will result in a multitude of benefits.
Tracking your freight shipment through the many avenues and obstacles on its way to its final destination is a complex procedure, but avoiding the time and attention it requires could lead to many frustrating and costly predicaments. Not knowing the exact location of an expected inbound freight is a lonely feeling, and unforeseen setbacks could possibly force a shutdown of your production line or delay your orders to your customers. Your business relationships could suffer as a result of a surprise delay, and those relationships are often hard to mend when there is so much competition out there.
Many larger companies track shipments by implementing a Transportation Management System, or TMS. As you will see, having a solid TMS in place will allow you to not only track your freight, but you will be able to evaluate your shipping routes, handle receipts and audits, project ways to cut expenses and eliminate costly mistakes. The data compiled from a complete transportation management system will supply you with valuable information to optimize your shipping procedure and enable you to remain competitive.
Transportation Management System (TMS)
A TMS is a subdivision of a company’s supply chain management. Many businesses that use Less-Than-Truckload (LTL) shipping or other freight services to transport products typically have logistics departments that rely on a TMS to improve efficiency and reduce shipping costs.
A successful TMS will allow you to foresee delays and find alternate routes and modes of transportation that could save time and money. At the very start, you will be able to plan your freight shipping using the most effective strategy based on your needs; finding shorter lead-time, the fewest stops and transfers as possible, and lowest cost. When executing a shipment, a TMS will incorporate Electronic Data Interchange (EDI) and/or Application Programming Interface (API) which allows the software programs of the involved parties to communicate throughout the process.
Electronic Data Interchange (EDI)
EDI was implemented in the 1960’s as a way to send cargo information electronically and eliminate the need for human processing, which is labor intensive and mistake-prone. EDI allows documents such as purchase orders, invoices, bill of lading, and shipping status to be automatically sent between businesses. Unfortunately, this type of technology is designed to send information one-way, and so to respond to a piece of information, the recipient has to send a separate confirmation back to the sender. Also, all parties must have the correct computer format being used or the documents will look like a foreign language. Finally, and maybe most importantly in this day and age, the data using EDI is only updated every few hours or so. This could be frustrating when coordinating or when an issue needs immediate attention.
Application Programming Interface (API)
Simply put, API is an exchange of information between two programs. Unlike EDI however, communication is two-way between the parties, usually through a cloud system, and allows shippers, exporters, importers, freight forwarders, brokers, and your business to all communicate in real-time.
Using an API system has many useful advantages. For instance, an API can be used to:
- Seek pricing quotes from multiple carriers.
- Dispatch carriers for pick-up request, and then respond with confirmation.
- Apply freight tracking by sharing the freight tracking number with all parties.
- Receive global transit times.
- Using the carrier’s tracking number, documentation can easily be requested and provided.
- Issue status updates of the shipment.
Throughout the transportation of your freight, you may receive status updates to keep you apprised of the location and state of your cargo and allow you to be proactive if any delays should occur.
Some common updates you may receive are:
- Dispatched for Pick-Up. This is to let you know that the carrier has acknowledged your request and will arrive usually that same day for a pick-up.
- In Transit. Your product(s) are en route to the carrier’s destination terminal.
- Out for Delivery. The freight has been picked up from the terminal and is on its way out for delivery.
Some negative updates you may receive:
- No Carrier Response. The shipper has not received your request for pick-up, either the EDI or API system never received the request, or they are not able to fulfill the request at the time.
- Shipment Delayed. This could happen for any number of reasons, but an alert will allow you to prepare and inform the rest of your supply chain.
- Refusal by Consignee. There could be several reasons for a refusal when your freight is delivered. For instance, it could be that a lift-gate was needed and not provided, or the drop-off was inaccessible, or the product was damaged and refused.
Delays and other negative factors cost money, but being connected through an API system, information can be accessed by the web in real-time, getting you as close to your shipment as if you were personally on the freighter halfway across the ocean.
The only downside to API is it can be costly, is open to security risk, and takes a sophisticated programming team to operate. This is where a 3PL (Third-Party Logistics) can come in handy.
Most likely, your business will have multiple shipping operations going on at once, and it takes a dedicated logistics team to analyze the data, file the documentation properly, routinely perform audits, and provide maintenance and updates to the program.
Having a Shipping Strategy
There are many benefits to using a TMS or a 3PL to help handle your shipping strategy. And despite what you may think, an affordable solution should be available to any sized business. The industry is interconnected and if you are left looking from the outside-in, you will be taken advantage of. Mistakes, accessorial up-charges, stolen, lost, or damaged goods, delays and several other negative factors are all possibilities when your freight shipment begins. Visibility is the most important and insightful tool you have to gain an advantage.
Using a well-thought-out TMS under the guidance of your supply chain management provides many advantages, such as:
Simplify data entries and reduce mistakes. Several factors go into developing a freight rate, so you don’t want to leave anything to chance. Fuel surcharges, accessorial fees, appeal or refund requests, and any other essential data is filed electronically to be pulled up at any time. Human error is inevitable when taking on this task without an automated unit, and the risks are plenty.
Manual data errors can tax your company through redundant payments, improper freight classification, incorrect rate, omitted agreed upon discount, or a multitude of other oversights in this complex arena. Having a system that continually audits your freight invoices is essential to stay afloat in shipping waters.
Theoretically, you should be able to access your freight’s location at any point in the journey. Alerts can be programmed to inform you if a problem arises. Relaying this information to your customer establishes a well-earned trust as you can paint the most accurate time for delivery. If there is a delay, your customer can be notified immediately, tempering an otherwise damaging customer service situation.
Having a constant location of your goods also builds your relationship with your shipper, as expectations and accountability become transparent.
With so many moving parts, you need to be able to coordinate your orders. Warehouse space must be available and shipments must be prepared and ready for pickup at the designated time. Having a shipping company wait while you prepare your order will cost you money, as will needing storage space to wait out a delay. Loss, theft, and damaged goods received must all be accounted for and documented, allowing you to file claims on time and take preventative measures in the future.
If you are electronically gathering all this information, why not use it? Analytics is not only a convenient by-product of your TMS, it is a necessity in today’s business world. By managing a department of well-trained data evaluators who meticulously observe the shipping industry and trends, you can make informed decisions about transportation routes, carrier efficiency, and cost projections. There may be hidden or new freight opportunities that become apparent when looking closely at the data.
Complete visibility allows you to see the whole picture, down to the finest detail. Using a proactive and predictive strategy, you can help boost productivity and efficiency across the supply chain. It pays to make business decisions based on concrete knowledge and numbers rather than by your gut.
Example: Container Tracking
So now that you know why tracking your shipment is important, let’s look at how it is done. A common practice when shipping freight is to fill a truckload container, either fully (FTL or full-truckload), or as part of LTL (less-than-load) cargo. The shipment is driven to a central hub, and re-dispatched to the port, where it is loaded onto a freighter. Before reaching your destination, the freight might make a stop and offload containers. But by mistake, your container gets offloaded as well. If the carrier doesn’t detect the error and leaves port, the delay of retrieving the misplaced container could be months. With an electronic tracking system, you can be alerted, and measures can be taken immediately to plan for the delay and notify the rest of your supply chain, including your customer.
The shipping company also benefits from keeping track of hundreds of containers on behalf of several shipping companies, as they have a responsibility of their own. If they realize the mistake of a sea freight or air freight off-loading the wrong container, they will want to correct the blunder before leaving port.
GPS Container Tracking
Most commonly, carriers use a GPS device to send the containers location to a satellite. Because a radio wavelength cannot penetrate the walls of the container from within, the GPS must be placed on the outside of the container. There are two standard practices to applying a GPS device onto a shipping container.
- A magnetic device is placed safely between the structural ribs of a container. They are never fixed to the top, as containers are frequently stacked.
- Or they are locking mechanisms that fasten the doors of the container. These GPS devices are usually set after the goods are originally loaded.
With either application, the device can be set to “wake up” when the container begins to move with the use of an accelerometer. This device sends out its location through cellular waves or to a satellite and then is relayed to all attached parties.
Benefits of GPS Tracking
- GPS tracking devices are readily available to consumers and require very little setup.
- The GPS system is self-contained and easy to use. Add GPS devices to any number of containers and monitor your shipments from one simple program.
- GPS is highly accurate and provides real-time data.
The Downside of GPS Units
- GPS container tracking can be expensive. Hardware will need to be purchased equal to the scale of your operation, and monthly fees will be charged per unit.
- GPS needs a clear view of the sky to operate properly. Shipping containers are often stacked on a freighter and without a direct line of visibility, most likely your GPS signal will be lost. Therefore, you may only receive a signal once the container is moved.
- Because it uses so much power, a GPS unit must be carefully calibrated to only broadcast its location when necessary. If it is simply left on with no “sleep” function, you can’t expect the battery to last more than a few days. Also, because GPS units download ephemeris constellation data from satellites to obtain its global location, it takes time and battery juice to download it every time it is started up cold.
Why You Should Be Tracking your Freight Shipments
It is important in today’s business culture to have a clear understanding of your shipping matrix in detail. Having an effective shipping strategy is an important facet to grow your business, remain competitive, increase efficiency, and curtail mistakes. Managing your freight shipments will lead to greater profit margins as accurate records are kept, deliveries are made on time, and audits are conducted on schedule. You will be able to provide accurate quotes to your customers and exhibit personalized customer service as you communicate the progress of each shipment.
Tracking your freight shipment should not be overlooked, or deemed unnecessary. A solid implementation of a shipping strategy should be the heartbeat of a successful supply chain.