Freight Management: Selecting and Managing Vendors and Carriers

By Logistics Tech Outlook | Wednesday, January 06, 2021

The relationships with brokers, carriers, and forwarders are typically handled using a transport management system.

FREMONT, CA: Freight management is part of the distribution phase, including the whole supply chain operation from warehousing to supplier partnerships to inventory tracking. As a shipper, one can perform any of these procedures or outsource some of them, such as freight management.

Depending on the objectives and resources, firms can handle freight activities in several ways.

Having a Private Carriage

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A few businesses conclude that the easiest or more efficient way to transport their goods is to buy their own fleet and manage their drivers. This aspect is essential for brands with large inventory volumes or for less traditional final destinations. Besides, the model primarily concerns ground transport, while large corporations may own their own aircraft or ships.

Using Third-Party Carriers

Most corporations use 3PLs to carry out their transport activities. They may be common carriers or contract carriers. Popular carriers offer transport services to the general public. In contrast, touch carriers operate only with particular contract-based shippers. Often known as Dedicated Contract Carriage (DCC), in this prevalent model, one pays a flat rate per day and per truck and can ship goods at any time or daily.

Freight Officers

One may also employ intermediaries to communicate with carriers and help organize transport: freight brokers and freight forwarders. Freight brokers do not work for freight; they help shippers connect to carriers and locate the right offers for them. Freight forwarders, however, have a more active role—packing, warehousing, and documentation planning. Often, they own a boat of containers, and they ship on their own bills of lading. Unlike other freight traders, they also handle international freight.

The relationships with brokers, carriers, and forwarders are typically handled using a transport management system (TMS)—a software mechanism for organizing and conducting transport operations, linked to an ERP from the inside and attached to a carrier or 3PL system from the outside.

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