Shipping is typically one of the largest spends that businesses need to balance. Intermodal transportation, specifically the combination of shipping and over-the-road (OTR) transportation, can help bring freight spend down to an extent, however, freight spend management is still a formidable challenge. Consider that:
In short, shipping consignments from one end of the globe to the other is complex and expensive – which is why shippers are increasingly relying on DFM (Digital Freight Matching) platforms to help manage and control their freight spend.
A DFM platform is similar to a marketplace of shippers and carriers. It allows shippers to match their consignments to load capacity of carriers available on the platform. Carriers, on the other hand, are able to secure loads from shippers. Thus, both parties are able to easily and efficiently secure their operations. However, the effectiveness of the DFM platform is based on its portfolio of shippers and carriers.
When shipping and logistic operations were carried out manually in the past, there was a serious dearth of transparency. Shippers did not always have access to the carrier’s data and load capacity and, as a result, often had to incur additional expenses to ensure timely delivery of a consignment. Conversely, carriers also lost out on opportunities that were best suited to their load capacities.
DFM removes these hurdles by infusing Digital technologies like Big Data and web-based collaboration. The use of digital technologies reduces errors and lag in the decision-making that accompanies manual processes. It also ensures that there is enough transparency in shipper and carrier data resulting in several advantages.
A digital freight matching platform is modern-day technology that enables shippers to achieve several efficiencies:
A DFM platform enables the shipper to collaborate with not just one but several carriers at the same time. It enables them to find the right carrier with the right load capacity that can help deliver a consignment. Additionally, the shippers can also be filtered based on geography, safety practices, insurance cover, customer service, and so on.
In the past, shippers had to engage 3PLs on a contractual basis for the long-term to ensure that there was a steady availability of load capacity. However, this proved to be a burden on the finances when there was no proper pattern to the consignment size.
DFM helps avoid that situation. It enables shippers to identify shippers easily through a collaborative platform. Carriers can be chosen based on the load capacity they offer, geographical coverage, even customer ratings. The end result is dynamic scaling of load capacity without having to enter into long-term contracts.
DFM introduces immediate and visible efficiencies into the freight planning system. It replaces manual-based processes with a single-touch web-based process that works on a real-time basis. The digital platform saves a lot of human effort and time which has a positive impact on the bottom line. For example, DFM eliminates spreadsheets, recurring phone calls, paperwork, and its distribution.
One of the key benefits that a DFM platform provides is the ability to match carriers to the exact load capacity of the consignment. In an alternate scenario, the shipper might have to work with a carrier with more load capacity which might cost more, resulting in a higher freight cost. DFM also provides market intelligence and predictive pricing that helps match the right load capacity to the right carrier.
One of the prominent challenges that a shipper has to confront is the volatility of the demand and supply forces. Access to historical data can help with this situation. It can give a shipper the foresight into when demand can shoot up or when it will diminish. A fair idea of the load capacity required can also be obtained which will make the planning more accurate.
Transportation is a collaborative effort, especially shipping and freight management. Older methods of communication and collaboration are no longer effective for its smooth functioning. Telephone calls and spreadsheet calculations are ineffective and make the whole process unproductive.
With its comprehensive approach to shipping management, DFM delivers several cost and operational benefits. Unlike other digital initiatives, DFM is not complicated or time-consuming. It can easily migrate all shipping and freight operations to the digital mode and start providing the benefits to shippers immediately.
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