Did you know that each year the United States transportation system moves roughly 51 million tons of freight? It’s hard to imagine how the logistics side of the industry stays organized and keeps track of all of these goods.
So, what’s the secret? The answer lies in a freight management system. This piece of technology is making it much easier to use the infrastructure that makes modern eCommerce possible.
But, what exactly is an FMS? And what does it do? If you want to learn the answer to these questions, and more, then you’re in the right place. In this article, we’ll teach you everything you need to know about freight management systems. Let’s get started!
What is a Freight Management System?
A freight management system is a type of software that’s used to manage freight forwarding operations in a way that’s both more efficient and more effective.
As any freight forwarder knows, you handle a lot of different data when you’re in this industry. Just some of this data include things like:
- Various customer information
- Different jobs and bookings
- Details associated with each shipment
- Documentation for each shipment
In the past, this type of data was recorded on Microsoft Excel spreadsheets, and before that, in workbooks and physical spreadsheets. And while this method might be tried and true, it’s not very efficient.
This becomes immediately apparent when your freight operations begin to increase in size. Without some sort of centralized system to organize everything it can seem next to impossible to organize the logistics of which employee is assigned to which customer.
So, if you’re tired of your operations is in shambles, then it’s time to invest in a freight management system. This system automates a lot of the less intensive tasks that need to be done.
Typically, freight management systems are cloud-based. They should also be customizable. After all, no two freight forward operations run the same way. As such, the software should be able to conform to whatever system is currently in place.
What Does a Freight Management System Allow You to Do?
Now we know what a freight management system is. But, what are some of its practical applications for those involved in freight management? Each FMS is different.
However, most of them all offer a similar array of functions. In this section, we’ll give you a brief breakdown of what they are.
Allows You to See Freight Rates
If you’re a shipper, then you know that cost is one of the main areas of concern with the profession. Without a freight management system, this typically involved calling up multiple carriers while asking for rates.
After you get a few estimates, you would then pick the one that best serves your needs. However, with FMS in place you automatically get hundreds of different estimates. Because of this, you’re sure to get the best rates possible with minimal effort.
Pick-up and Delivery Scheduling
Not everything can be automated. Once you pick an estimate your freight management system will then ask you for a few details. This includes things like the pickup schedule, expectations, and service levels required.
Once you input this information the system will handle everything else.
Prepares Documents and Printing
Typically, you have to badger the shipper to fill out all the necessary documents, then print them out and send them back to you. However, the freight management system makes it easy by sending all of the necessary documents to the individual in one easy-to-find place.
They might still drag their feet on filling it out. But, at least it’s made easier by the fact that it’s all in one location, instead of spreading out and hard to find.
Tracks the Shipment
Once your delivery leaves the warehouse you’ll be able to track it on its journey using the freight management system. What’s more, you’ll receive notifications when it reaches its location.
This improves the experience for yourself, and your customer, by providing complete transparency.
Benefits of Freight Management System
We’ve seen what a freight management system can do. But, what are some of the tangible benefits that come with installing a centralized FMS? Well, for one thing, there’s the improvement inefficiency.
Many forwarders reported a 70% increase in efficiency when they switched from spreadsheets to an FMS. You also get improved communication with your employees and carriers.
That transparency means fewer disruptions in the supply chain. After all, you’re kept up to date on anything by your FMS. Finally, there are also the business insights that a freight management system provides.
With an FMS you can see which routes or carriers might not work as efficiently and adjust your business accordingly.
Why Should You Consider Automating Your FMS?
Just because you have a freight management system doesn’t mean that it’s foolproof. If you’re entering data into it manually, then there’s still a chance that it could be wrong due to human error.
As such, we recommend automating certain parts of your FMS. That way, it both makes your life easier and it’s more accurate. For starters, we recommend beginning with your data entry.
That way, you get instant up-to-date reports. Then you can move on to things like driver routes, invoicing, customer updates, and rate cards. Make sure to check out this guide to learn more about automating your freight management system.
Want More Content? Keep Reading
We hope this article helped you answer the question, What is a freight management system? It’s hard to imagine how logistics companies stayed organized before this piece of software came onto the scene.
However, what’s important is that this piece of technology is here to stay. It makes life both easier for the industry and saves people money.
Did you enjoy this article? If the answer is yes, then you’re in the right place. Keep exploring to find more topics that you’re sure to love.
