Automating processes leads to better transport performance

In these turbulent times, companies need more control over their transport flows. But how do you achieve that when transport is decentralized and outsourced? During Webinar Wednesday, Elmer Spruijt of Descartes explained that a Transport Management System (TMS) not only results in better performance and lower costs, but also offers plenty of opportunities for automating those processes that are often still done manually.

By Marcel te Lindert

The tipping point is around a thousand shipments a year. Anyone sending more shipments than that needs a tool. ‘At least, you do if you want to automate and optimize as much as possible to stay competitive,’ says Elmer Spruijt, who as Vice President Transport Management is responsible for Descartes’ TMS solutions in Europe. ‘Today, we still see many companies where transport management is a largely manual process involving lots of phone calls and emails and multiple systems with self-built interfaces. A TMS can help support that whole process from start to finish.’

The precise added value of a TMS differs from one company to another. The needs of an online retailer dispatching thousands of parcels cannot be compared to a company that has to ship a thousand sea containers. ‘But major savings are almost always possible by eliminating and automating manual processes, reducing transport costs and improving customer service. In addition, we can speed up processes by significantly reducing the time for booking and rescheduling shipments. This makes supply chains more flexible and resilient.’

Global Logistics Network

The biggest challenge is collecting all the necessary data. Getting a container from China to Europe can easily involve ten different organizations, from local carriers to port and customs authorities. If companies themselves have multiple branches with different systems and processes, the complexity increases further. ‘Not to mention all the mini-disasters that arise when someone makes a typo or forgets an update. Getting data from all those parties into one system in a structured way without delay is a big challenge. However, it’s crucial if you want to automate processes,’ Spruijt claims.

Sharing data with transport partners forms the basis of Descartes’ vision of transport management. That vision consists of six pillars, from planning and shipping to freight forwarding and customs management. As the foundations, all those six pillars are built on what Spruijt calls the ‘Global Logistics Network’. ‘We have been building this network for 30 years, and thousands of carriers are added every month. Every day, 140,000 trucks hit the road thanks to this network, and sea and air freight carriers are also connected to it.’

Freight consolidation

Spruijt cites several examples of processes that can be automated, including freight consolidation. ‘Many companies have a standard way of working, often with a preferred carrier. If they have a transport order, they execute it as quickly as possible without thinking carefully about optimization possibilities. A TMS makes it possible to analyse all transport orders and identify opportunities for consolidation. Think of combining multiple orders with the same delivery address into one shipment. Or bundling shipments from multiple locations into one truck. You can let the TMS calculate what the best scenario is.’

Another example is carrier selection. Based on the nature of the shipment and the carriers’ rates, among other things, the TMS can indicate which carrier is best suited to execute a transport order. The proposed result from the TMS is displayed on the planner’s screen for approval. ‘We often see that, after a while, companies no longer need to see that screen. They trust the system’s proposals and check the data at most once a week or once a month.’

Calculating carbon emissions

One hot topic is the need to collect carbon data for the sustainability reports that companies have to prepare under the Corporate Sustainability Reporting Directive (CSRD). ‘Ideally, to determine emissions, you should use the same calculation rules for all your shipments. In the case of sea freight, it helps if you know the weight of the container, which ship it is on and the ship’s emissions. When it comes to trucks, we often know their engine type and what type of fuel they use. If you have all the data, you can calculate emissions for all carriers and all modalities relatively easily in a standardized way.’

As a final example, Spruijt mentions real-time visibility. Based on data from carriers, the TMS closely monitors all shipments. ‘From the experiences of our customers, we know that transport departments can sometimes manage with 20-60% fewer people thanks to process automation. We also see that consolidating shipments, among other things, reduces transport costs by 2-20%. And by sharing data and proactively informing customers about the status of shipments, we see a drop in the number of phone calls. This immediately leads to improved customer satisfaction.’