SCDigest Editorial Staff

SCDigest Says:

Netting it all out, we typically see companies reducing transportation overhead between 10-30%, depending on factors related to centralization. We also see a reduction in freight spend of between 5 to 15%. What do you say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Transportation Management Systems (TMS) have long been generally considered to produce strong payback, especially for those with significant opportunity to consolidate shipments, such as from LTL to multi-stop truckload, or through use of inbound or outbound pools.

In general, the level of savings opportunities from TMS are driven by three main factors:

• The current level of a shipper’s transportation technology/automation.
• The level of shipment consolidation opportunities, generally represented by the amount of LTL moves inbound and outbound.
• The current level of centralization, and plans for centralizing currently decentralized transportation functions. Many TMS initiatives are driven by a move to centralization (often termed the “load control center”), and often savings in manpower and carrier spend can be generated from centralization programs.

Below, we list some of the key areas of savings from TMS implementations, along with some typical percentages of savings. When reviewing these numbers, please keep in mind that there are some redundancies, meaning you won’t realize savings from all the areas – otherwise, you would be just about shipping for free.

Netting it all out, we typically see companies reducing transportation overhead between 10-30%, depending on factors related to centralization. We also see a reduction in freight spend of between 5 to 15%.

(Transportation Management Article - Continued Below)