Over the last few years there has been an unprecedented “capacity crunch” in the US and global shipping industries. The reasons for this crunch are varied and complex but the results of the matter are simple: there is not enough carrier capacity on the market to meet demand. With e-commerce order volumes climbing to an all-time high, and a general reduction in the number of trucks on the road each day, the freight industry is being squeezed from both directions – especially in peak season.
So, what can be done about it? If you’re a carrier, then it’s all about increasing your capacity. There are various ways you can do this. You can onboard more drivers or increase the size of your fleet. These are both valid responses and will surely help you to boost your capacity. But increasing fleet size and bringing in new drivers is both expensive and not always as easy as it should be – as you probably already know. But there are ways you can boost capacity without investing heavily.
It’s all about maximizing your transport management system (TMS). Below we’ll take a closer look at some top tips for utilizing TMS features to your advantage. But before we do that, let’s take a closer look at exactly what we mean by carrier capacity and what challenges this can create.
A carrier’s capacity simply means the amount of freight or product that a carrier can transport at any one time. The carrier capacity can vary according to a number of key factors including e-commerce demands, driver availability, supply chain bottlenecks, and more.
At present, the US freight market is experiencing something widely known as the “capacity crunch”. With the carrier network experiencing surges in demand over the past year, often as high as 30% or more, carrier capacity management is extremely challenging. Fleets, terminals, and docks simply can’t cope with the increased demand brought on by an increase in e-commerce. The capacity crunch is being exacerbated by one of the worst driver shortages in history, which has led major industry players such as FedEx to suspend services. This in turn has a ripple effect through the industry as shippers are left scrambling to find new carriers, transportation options, and shipping channels.
In most instances, this is leaving carriers with maxed out capacity. But is there something that can be done to reduce carrier capacity constraints through a smarter use of existing transport management systems? Let’s take a closer look.
Not all TMSs are the same, with some offering a more extensive range of features and capabilities than others. However, no matter what system you use there are generally ways you can make it work harder for your business and boost capacity. Below are some key TMS solutions and features to look out for.
Data is more important than ever in these times of stretched capacity. Use your TMS to collect and consolidate data about the entire supply chain process. More accurate data can help you to make more informed and intelligent decisions about the supply chain, and specifically, your capacity - leading to a significant increase.
As with most economic models, pricing will need to be dynamic in order to effectively regulate capacity. Use your TMS to help create a dynamic pricing model that is fair and easy to understand so that shippers can make informed decisions.
There are various communication features of TMSs that can be used to increase the speed of information flow between you and your shippers. This includes tools such as automatic quoting, dispatching, and tracking. These can all help to streamline the flow of information and help prevent bottlenecks. It can also help to collect useful data in a faster and more reliable way.
Human error is often the root cause of supply chain blockages and capacity concerns. By automating more of the process through your TMS you can help reduce the risk of an error occurring, through misunderstanding an email, writing the wrong number in a box, or something equally simple. With a greater degree of technological processing, errors are flagged quicker helping to speed up the supply chain.
Integrate your accounting software with your TMS and you can instantly create, send, and track invoices, helping to keep your financial records up to date in real time.
You may need to consider the different shipping solutions required throughout the supply chain, such as the need for HVAC elements like cooling capacity or heat pumps. This can help to optimize multi-carrier shipping strategies.
It may also be possible to leverage your TMS to a freight broker platform, which can have a number of major advantages. For example, this can help you to find compliant carriers and engage an audience of drivers and dispatchers. You can also make greater use of automation in freight booking, data analytics and insights, as well as utilizing options that may be outside of your TMS. Traditional load boards may not be the solution to help ease the strain of capacity challenges, but using a freight broker platform or third party logistics that gives you more access to visible carrier data could make the difference.
The carrier capacity crunch has made the market tighter than ever before, so in order to meet these challenges it is necessary to work in a more efficient way. Using your existing TMS capabilities in a more streamlined and effective manner can help to ease some of the pressure. That means using data and analysis to eliminate empty miles and increase service levels. Establishing effective round trips, identifying complementary lanes, and understanding the impact of factors such as seasonality can all help to improve capacity in these trying times.
If you are a freight broker and need help finding truckload capacity, then FleetOps is the perfect solution for you. Since 2017, we have helped countless freight brokers discover unique carrier capacity using their existing TMS. We are a certified integration partner with top TMS providers including McLeod, Mercury Gate, Turvo, Aljex, and others.
FleetOps lets you access new carrier capacity right inside your existing TMS in just a few taps. Simply connect your TMS with FleetOps and get your loads covered.
Our goal is to aggregate the right data to make operating your freight brokerage as easy as possible. That’s why we have become the USA's fastest growing capacity finder and digital freight matching platform, supporting more than 227,000 drivers in our network. If you would like to know more about how FleetOps can help you find new carrier capacity inside your TMS, get in touch with a member of our team or try a free demo of our services.
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