How to Choose the Right 3PL TMS Software for Your Business

by | Feb 28, 2020 | 3PL, Transportation Management

Third party logistics providers (3PLs) focused on business growth make it a priority to deliver exceptional customer service and onboard new customers quickly and easily. The right 3PL transportation management software (TMS) is essential to supporting this strategy.

Differentiating with 3PL TMS Software

Today’s  shippers expect a higher level of shipping visibility, efficiency and response times from 3PLs, which is leading these logistics service providers to replace traditional business processes with new technology. Furthermore, a focus on replacing manual procedures with automation is no longer enough.  As Armstrong & Associates noted,

It is our opinion that many data entry and manual processes will be eliminated by artificial intelligence and machine learning, improved transportation network systems and application interfaces, and improved data mining and analysis. With so many innovative solutions available, the real question for [non asset-based domestic transportation management] providers is, “What is your digitalization strategy?”

Logistics service providers, when reviewing transportation management solutions, have a broader scope of functionality to consider. Transportation planning and execution is a core requirement, but the 3PL TMS platform they choose must also enable them to keep pace with customer demands, integrate with a broad collection of internal and external systems, and monitor and maximize the thin profit margins at every step.

Critical TMS System Requirements

Many in the 3PL industry cite these four categories as requirements of their preferred TMS software platform:

1. Multi-mode optimization

A transportation management system’s algorithm considers everything to move freight – all modes, carriers, multi-stop and pool distribution – providing comprehensive rating and pricing management.

Furthermore, a TMS with both optimization and execution native to the same platform can achieve what older TMS systems, which often have a bolted-on optimization engine, cannot: the ability to model results that can actually be executed in the real-world environment, and change dynamically as needed.

2. Routing optimization

A TMS manages complex routing, including multi-stop, multi-leg and pool points for 3PL logistics. To respond to customer needs while adhering to tight delivery windows, an effective TMS can consider routing constraints that cover both the 3PL and shippers’ requirements. In other words, a 3PL can build in constraints into the TMS, and the TMS will take those into account. This drives savings for the 3PL and reduces the rework needed after a load is built. If a customer changes an order at the last minute, the TMS will allow the 3PL to make those changes and factor them in.

3. Transportation Visibility

Transportation management systems have traditionally struggled with true visibility because of the complexity around translating and sharing data. For example:

  • There are different data sources: ERPs, portals, EDI, WMS, etc.
  • There are different languages: Customers talk in orders and POs, carriers send data in shipments and loads, finance needs invoices and vouchers
  • There are different data relationships: Many orders to a shipment; many POs to an invoice; many carriers on a single route
  • Internal systems (ERP, OMS, WMS, Finance) and external parties (3PLs, carriers, vendors, customers)

Managing this complexity has markedly improved in recent years as some TMSs have gained the ability to gather data from internal and external sources, integrate and interpret that data, and give 3PL customers the power to react faster and smarter. This type of unique visibility platform enables 3PLs to leverage a single point of full visibility into the flow of data and the tools to act on that data. In addition, innovative an integration hub can streamline customer connectivity costs and implementation times to further enhance visibility and save time with simpler and faster set-ups.

4. Customer and Carrier Portals

The more you can give a customer access and control over their needs, the more collaborative and beneficial the relationship is for both of you. TMSs that are designed on older architectures still struggle to offer truly configurable portals, but more modern Tier 1 systems can offer fully configurable portals with true visibility that are tailored to the needs of 3PLs and their customers. Portals can become a very powerful tool in the hands of 3PLs, allowing them to empower the shipper with clearer information and deliver faster response times – all of which contributes to improved revenue for everyone.

How a TMS System Can Drive Business Growth

The 3PL industry knows it must continue delivering new ways to make customers’ lives faster, easier and less costly. Equipped with a TMS, a 3PL provider can streamline business processes, improve efficiency, boost revenue per employee, broaden visibility, maximize margins and control costs. The ultimate result: Exceptional service that drives customer loyalty and organizational growth.

Gain Customers and Revenue

With 3Gtms’ transportation management system platform, the RedStone Logistics has attracted larger clients because of its ability to handle more complex and varied logistics requirements.

For example, when a client had a unique savings opportunity that involved multi-stop truckload combined with pool distribution throughout the southeastern U.S., RedStone managed that challenge successfully. “The 3Gtms optimization considers more possibilities than any other TMS on the market, which helped us drive down costs for this client and markedly improve their service,” explained Duncan Hopwood, director of engineering at RedStone.

“Many TMS products struggle using optimization in routing and executing freight. We’d heard about the problems of some products showing optimization results that look great, but stumbling when the organization tries to run the loads that were built. 3Gtms produced results that allowed us to win some big accounts.”

For Mohawk Global Logistics, getting the right 3PL TMS software meant finding a system that could be configured to the 3PLs specific needs, as well as provide better visibility and superior responsiveness to clients. With 3Gtms’ flexible transportation software backed by a collaborative partnership approach, Mohawk Logistics has the TMS platform it needs to increase shipment visibility for clients, invoice clients faster, and provided custom reporting automatically without users spending hours putting together reports. “We’re pushing process improvements and that’s translating into serving our clients better,” said Gerry McDevitt, vice president of domestic services at Mohawk. ­­­­­­­­­­­­­­­­­­­­­

Learn more about how you can accelerate your growth – and your customers’ – with the right TMS!

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