What is Freight Management?

22 November 2021

Freight management is the process of organising inbound and outbound goods for transport.

There are a number of tasks or components that make up the process of sending goods across this stakeholder network. Some of these include comparing freight prices, consigning freight jobs, printing freight labels and manifesting paperwork, tracking jobs, reconciling carrier invoices and reviewing carrier performance. Combined, these tasks are what we refer to as freight management.

Why is Freight Management important?

The ability to transport freight on time, in the right quantity, free from damage, and at the lowest cost is vital for a lot of businesses. In today’s competitive environment with rising costs, the growth of e-commerce and consumer expectations, businesses require the utmost efficiency to manage their goods as they move through the supply chain before arriving safely at the right destination.

The logistics industry in Australia is growing increasingly complex and fragmented with multiple third-party transport providers (carriers) to choose from, each with complex rate structures and a vast number of service types to choose from. Ensuring the right products get to the right place in the right time frame is typically a very manual and inefficient process requiring the coordination of multiple stakeholders – senders, carriers and receivers.

Businesses usually rely on staff to organise and manage freight activities with insufficient technology support. Coordinating freight manually is a labour intensive and repetitive process. Additionally, business and senior management have very little visibility of freight movement and accurate costs associated with carriers. This can lead to inaccurate business assessment and poor decision making.

An introduction to Freight Management Systems

Australian businesses can greatly benefit from utilising robust freight management systems to make freight and logistics processes efficient and cost-effective. Utilising a Freight Management System is suitable for all business sizes regardless of how simple or complex their logistics operation may be.

The difference between a Freight Management System (FMS) and a Despatch Platform.

There are a wide variety of software solutions on the market and it’s often confusing which one is suitable for your business. These solutions vary in features, integrations and pricing.

Before we dive into what a market-leading freight management software should look like, first, it is important to distinguish the difference between Freight Management Software (FMS) and Despatch Platforms.

The most important differentiator between an FMS and Despatch Platform is that FMS manages the entire freight task, whereas the despatch platform takes care of only one part of the holistic freight management system. Usually, Despatch Platforms are known as label printing platforms that assist warehouse personnel with their day-to-day job. Here is an example:

Despatch Platform:

Warehouse personnel can create quotes, compare prices, create consignments, print labels and send out tracking information to the customer.

Freight Management Platform:

The system can accommodate multiple sending locations, business units and cost centres. Various levels of staff from picking and packers to senior managers have different levels of access depending on their job needs and requirements.

FMS has a significantly broader mix of carriers to select from with greater visibility of where your freight is and when it arrives. Additionally, FMS abilities don’t stop after the freight has been despatched. It identifies carrier invoice discrepancies and reports on late consignments and carrier performance. Sales and customer support staff can access all tracking and customer information in a single view. In addition to this, senior management can analyse freight data and make better business decisions.

In summary, Freight management platforms are richer in functionality and go beyond manifesting consignments and warehousing related tasks.

What should a good Freight Management Software look like?

When selecting a freight management software solution, the following are the must-have features for choosing the best possible solutions for your business:

Integrates with at least 30 common carriers, including local courier services in order to maximise costs, efficiencies and a broader range of shipment types; i.e. cartons, pallets etc.
Integrates with leading e-commerce platforms such as Shopify, Woocommerce, Magento, Maropost (former Neto).
Ability to compare prices, book jobs, print shipping labels, track consignments, carrier invoice reconciliation and reporting across multiple carriers – all done in one platform and one set of label printers.
Confidently choose the best freight option across multiple carriers and carrier services without guessing.
Ability to bring your own carrier accounts with your own rate cards.
Perform invoice audits of all carrier freight invoices across every billing period.
Manage fuel surcharges and rate changes with easy access and accurate up to date rates.
Provide a centralised point for consignment tracking for your sales or customer service teams.
Provide your customers with a detailed, uniform and updated freight tracking messaging system and portal with your company’s branding.
It should be a logical and easy to use system for all your staff allowing for fast adoption.
An ability to seamlessly integrate with your existing Warehousing and Order Management Systems and any label printing equipment.

How can Freight Management Software help your entire business?

Unlike Despatch Platforms which we discussed earlier, Freight Management Software not only benefits warehouse and logistics personnel but also benefits other departments of the business regardless of whether you have a team of five or a team of a hundred.

Warehouse and Logistics

FMS removes uncertainty and poor judgement by providing warehouse and logistics teams with a comprehensive, detailed and robust freight management platform that allows users access to better freight rates, different carrier options and real-time tracking for better supply chain management.

Finance Team

In addition to cost savings, finance teams can easily reconcile carrier invoices and find discrepancies with the majority of the work done by the system and not the other way around! The structure of the FMS can also be set up with appropriate business units and cost centres minimising time spent allocating costs which reduce the manual and repetitive work for the finance teams.

IT Team

A good FMS should provide an API so that any workflow can be accessed via API, so there is no need to bring another software on top of other multiple solutions that businesses use. Fast and easy integration is crucial for any IT department which can easily be done with a market-leading Freight Management System.

Customer Service

Customer service has to be equipped with the most up to date tracking information all in one view for easy access. This not only empowers customer service teams to provide a seamless customer experience but also minimises the time spent on the phone using a single view of all relevant customer information.

Senior Management

A good freight management system provides tangible cost savings through improved freight rates and carrier providers to drive further efficiencies which benefits the entire business. Additionally, senior management has reporting and analytics tools of their entire freight and logistics operations to enable better decision making.

Final words

If you are not sure if you need to upgrade or change your system to a fuller freight management experience, ask yourself the following questions:

How long is it currently taking you to create consignments across your carrier mix?
How many systems and/or touchpoints are involved in the dispatch process?
What is the cost to your business of not selecting the right carrier for the job – both in terms of money and customer experience?
How certain are you that warehouse personnel are selecting the right carriers?
How much visibility have you got on your Carriers performance? How much negotiating power have you got with your carriers?
How long does it take your team to manage Carrier data – such as rate cards and fuel surcharge changes?

About MachShip

MachShip has been built specifically for Australian business and developed by a team of transport and software specialists. Our mission is to enable greater efficiencies in the way organisations facilitate their logistics operations.