Explore what Least Cost Carrier insights powered by Transware enabled for a large shipper of industrial packing and supplies to optimize in their workflow.
Sometimes simple decisions around questions like “which carrier should I use for this shipment?” are more difficult to make than they need to be.
Every TMS system is different, and most do a sufficient job of collecting and organizing your shipping data. But virtually every client we talk to says their TMS system has big gaps when it comes to the rating capabilities they need. These gaps range from outdated maintenance of rate agreements, to the lack of any usable rating capability at all. And these gaps make it difficult (or impossible) to make sure your team is choosing the most cost effective carrier for every shipment.
In this success story, we explore how VTM:
Leverages the Transware platform to find savings before and after a shipment leaves your warehouse
Drills through savings and spots trends with Transware’s Advanced Analytics dashboards
Offers solutions for both inbound receivers and outbound shippers
Configures Transware’s Rating Engine to support multiple, complex, rate agreement types across several modes
Incorporates business rules to comply with scenario-specific requirements
Recently, after a suggestion from their Dedicated Success Manager, a large shipper of industrial packaging and supplies that had been a VTM client for several years decided to start taking a closer look at their carrier mix and how their fulfilment team selected the carrier to use when tendering a shipment.
The client was using several disconnected systems at their fulfillment centers, and each of those systems had different capabilities. Some of these systems did not have rating capabilities at all, and the systems that did support shipment rating suffered from outdated and/or missing rate agreements with carriers. Having already enjoyed the benefits of Transware’s Rating Engine for ad-hoc rating, it quickly became clear that extending their services to include Least Cost Carrier functionality and integrating it into their workflow was the ideal solution for enabling this type of analysis.
Additionally, the client wanted more control over costs related to shipments from their vendors inbound to their warehouses. They wanted vendors to use the carrier with the best rate, but to avoid revealing sensitive rate information unnecessarily. Our solution had to be flexible enough to be accessible to many external users and give them exactly the data they needed.
The client had a feeling there was a lot of opportunity to optimize their spend if they could:
Consolidate all of the latest rates in a single source of truth rating system
Ensure the carrier with the best rate for the shipment was always selected for outbound shipments
Integrate the least cost carrier determination into their TMS system
Implement a solution that would also help their vendors make the most cost effective carrier selection on inbound shipments
The Process & Solution
Transware’s Rating Engine was the perfect solution to solve this client’s rating challenges. Out of the box, Transware’s Rating Engine was ready to start crunching the numbers. However, to fully achieve the client’s goals, there were several distinct tracks to a project on the client’s side that required close coordination. Their Dedicated Success Manager helped setup an implementation plan that clearly divided and tracked the tasks so it was easy to follow along.
This project had several key tracks that their Dedicated Success Manager helped implement:
Gathering and validating current/active carrier rate tariffs
Integrating rating calls from their TMS systems to Transware
Designing and communicating a solution for inbound shipments
Defining business rules for carrier determination
One of the biggest challenges we hear from our clients is that they have so many carriers, and so many different types of rate tariffs that it is difficult (if not impossible) for them to keep up with maintaining their rates in their TMS systems that support rating. This client was no different as they had rates with more than 25 LTL and Truckload carriers.
A few years ago, when the client got started with VTM’s audit and payment services, the client had little control or visibility into their rate agreements, with each carrier relationship being handled by someone different. To support our audit services, we worked with the client’s team members to get each rate tariff and worked directly with the carriers to keep them updated in our system as they were updated.
When it comes to LTL and Truckload rate tariffs, one size does not fit all! Different carriers, rate bases, discounts, and tariff types can leave seasoned industry veterans scratching their heads trying to compare and make sense of the variation. Leveraging Transware and the team of expert Rate Analysts at VTM to keep your rates up to date simplifies the entire cycle:
Fully managed rate maintenance
Load new rates in minutes, not weeks
Proactively connect directly with carriers or your logistics team before rates expire
Side by side comparison rate studies available
Transware’s rating system is already set to handle the most common LTL and Truckload rate types, like cost per mile, cost per pound, flat rate, cost per tier and several others. Also, different service levels like hazmat, refrigerated, flatbed, and many more are supported out of the box.
We have been challenged many times by clients with unique goods and materials that require special methods of rating and calculation. In these situations, VTM’s Rate Analysts ensure we have full understanding of your requirements to build a solution around. We also work with your carriers to quote rates in accordance with those special requirements.
Bonus: everything you need for a rate study
Transware’s Rating Engine makes it simple to see the impact of new proposed rates.
When you need to know if your new rates are a good deal or too good to be true, Transware can rerate previous shipments and provide a side-by-side comparison so you know exactly what to expect:
Integrating with Transware
Integration is typically a pain point during an implementation. Between system constraints and lack of IT resources, most shippers require flexibility on integration to keep making progress. This client’s implementation was no different, and we were happy to support multiple iterations of integration until we got to real-time solutions.
Depending on the resources you have available, VTM supports utilizing one or more of the following methods to integrate with Transware’s Rating Engine:
Email shipment data file to VTM and receive an email response with carriers and rates
Push/Pull shipment data file via SFTP and receive response with carriers and rates via SFTP or Email
Directly connect your TMS system(s) to Transware with REST APIs
When utilizing SFTP or an email shipment data file, our solutions are set to continuously monitor for your files, enabling you to send the file on a schedule or manually as time and resources allow. Our response files are generated instantly and output in any format needed. Additionally, our solutions support any input file type, like Excel, CSV, TXT, XML, JSON, etc.
Solutions for inbound shipments
Outbound shippers generally have the flexibility to choose the best carrier for their shipment (there are exceptions, more on that in a minute). However, some of our clients have been able to leverage their vendors into using their preferred carriers and their rates.
This is a great advantage for our client because it gives them control over the cost they end up paying, and also allows them to consider this inbound volume in their rate negotiations with their carriers. One of the key prerequisites to pulling it off, however, is ensuring your vendors have quick and easy access to knowing which carrier to choose.
All the integration methods outlined in the Integration section are available for your vendors as well. Plus, a special version of Transware’s Rating Engine is available for your vendors without any integration capabilities.
Your vendors can get access to the Transware ad-hoc rating engine and enter the shipment details (origin, destination, mode, weights, classes, etc). We will crunch the numbers with your carriers and return a clear carrier selection that is the lowest cost, based on your business rules (if applicable).
The results displayed can include or exclude the rated amounts depending on what you want your vendor to see.
Business rules for rating scenarios
Like other parts of the Transware platform, the Rating Engine and logic used is totally customizable based on your unique needs. Sometimes, the best carrier to use for a particular lane is not always the cheapest because of reliability or consistency issues. Or, perhaps getting a shipment to a customer sooner is more important than saving a few dollars on the freight cost. These decisions sometimes need to be made by people, but often can be accounted for as business rules in Transware’s Rating Engine.
With Transware’s Rating Engine, you can define rules around:
Your customer’s preferences (only consider a subset of your carriers when shipping into a particular customer)
Lane-based exceptions (exclude the least cost carrier from consideration in a lane due to poor performance)
Shipment-characteristic specialties (prefer a certain carrier when shipping specific products, service levels, weights, etc)
Time-based rules (exclude a carrier not accepting shipments in a lane for a period of time)
Putting it all together
This client, like many others, now rely on VTM to bring our industry expertise, tools, and analytics to their freight workflow. Experience the difference that always having access to accurate rates can make for your shipping costs. When you leverage VTM’s Least Cost Carrier analytics as part of your workflow, you can see the real savings from Day 1 in your Least Cost Carrier Dashboard.
Selecting the right carrier for a shipment manually is complicated, and when left to your fulfillment centers, can be costly. In this client’s workflow, their fulfillment center team and TMS systems are making an initial carrier selection based on the information they have available. However, before tendering the shipment to the carrier selected, the TMS system is reaching out Transware to check for the least cost carrier.
Transware immediately responds to the TMS with the least cost carrier to use (considering the business rules configured) and updates the shipment in the TMS system with that carrier. The shipment is then tendered to the correct carrier.
This dashboard is keeping track of all of those changes to the carrier selected and reporting the savings between the manually selected carrier (that would have gotten the shipment without Transware), and the least cost carrier Transware selected. Also, the client’s logistics team can track the trend of savings, drill into the carriers, customers, fulfillment centers, and lanes to get a clear view of the savings no matter how they want to slice it.