Managing Ocean and Air Freight in a TMS

The definition of transportation management systems (TMS) continues to evolve. In the early days of TMS solutions, the primary goal was to manage truck-based freight. Over time, point solutions were developed to support particular modes for particular industries such as ocean and air freight.

At the same time, traditional TMS providers began to incorporate basic multi-modal capabilities into “truck-centric” solutions. Migrating from a truck-centric solution to a truly multi-modal solution is no small task and many vendors have chosen to rewrite solutions or “bolt on” other point solutions to bring multi-modal capabilities into their platform.

As more companies seek to take advantage of lower labor costs in developing countries, the need for multi-modal transportation systems has become imperative. Many industries now depend on ocean and air freight as natural and vital links in the supply chain. Industries such as apparel and automotive keep the ocean carriers humming, while pharmaceuticals and high-tech keep the air freight industry busy.

The right TMS can make help multi-modal shippers and logistics companies manage the supply chain more effectively and efficiently.  Some recommendations follow:

  • Consider the schedules:  Ocean and air freight differ from truck freight in several ways, but one in particular is the scheduled nature of the movements. When considering which carriers to use, cost and capacity alone are insufficient. Sailing schedules and flight schedules need to be integrated into the TMS to enable logistics practitioners to make informed decisions.
  • Submit bookings: Choosing the best carrier is important, but if that carrier does not accept the freight, it’s vital to quickly locate alternatives. The TMS should also have real-time integrations with ocean and air freight carriers to submit booking request and process booking responses.
  • Generate Documents:  Document generation may not be the most exciting part of the process, but it is very important. A truly multi-modal TMS will provide document generation capabilities that can support all the appropriate documents such as the Ocean Bill of Lading, Master Airway Bill, Commercial Invoice, Certificate of Origin, Delivery Order and Arrival Notice, among others. Ease of customization of these documents is also important to minimize total cost of ownership of the TMS.
  • Submit Electronic Bills:  Once the booking is confirmed, the ocean carrier will be expecting the shipper or forwarder to transmit the Shipping Instructions. Similarly, the air freight carrier will be expecting the transmission of house and master airway bill information. Transmitting the data electronically reduces the opportunity for errors and may help speed the process of clearing shipments through customs.
  • Track and Monitor:  While many of the major air and ocean carriers provide web-based tracking portals, logging into different portals to manage the supply chain is not optimal or effective. Take advantage of those TMS’s that can accept electronic feeds from the carriers to provide real-time status tracking of your shipments. This data can be used to facilitate an exception management process, monitor carrier performance against KPI’s and proactively notify clients about potential supply chain problems.
  • Perform Settlement:  Maintain good working relationships with carriers by paying non-disputed invoices quickly. A truly multi-modal TMS can automate the process of auditing and paying invoices to keep the flow of goods moving.

Trade is becoming increasingly global. Traditional supply chains are now working in non-traditional ways. Use technology to seamlessly integrate all modes of transportation into your transportation center of excellence to help meet the demands of this complex, global environment.

Doug Surrett is the Vice President, Global Logistics at MercuryGate.

Doug began his career at UPS in 1988. He worked in Operations, IT and Customer Automation. In 1997 Doug joined RedPrairie as Project Manager. He later became Project Director and then VP Global Consulting for TMS. Doug left RedPrairie in 2007 and founded Raelen Consulting, a consulting practice focused on TMS, Global Trade and WMS software selections and implementations. In 2012 he joined MercuryGate.

Comments

  1. Great blog Doug! Do you predict the abbreviation TMS should change as well? For Shippers I would rather speak about Freight Management Systems. At Eyefreight we see our customers really gaining a lot of Freight Spend Optimization using the Eyefreight solution, the only true multi-modal Freight Management solution. For the LSP market I tend to agree to leave the name TMS for the Transport software used by LSP’s due to their other functional needs then Shippers. Read more at http://www.eyefreight.com/freight-spend-management-or-optimization-that-is-the-question/

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