Analyst Insight: Commodity industries, made up of the metals, forestry, chemicals, energy, mining, cement and agricultural markets, are like every other industry today, with the need to reduce supply chain costs, proactively improve customer service, increase employee satisfaction and improve sustainability. These industries will need to continue reducing costs and improving operations in 2024 and beyond.   

Commodities industries have unique challenges. First, companies are far removed from the consumer. This means that orders can be challenging, with cancellations and alterations. Second, production of products never stops, which means outages in supplies, equipment, and labor have a more significant impact than in traditional industries.  

When it comes to transporting these products, rail and truck carriers handle the largest volume, but it comes at a cost. Rail service is the most economical and environmentally sustainable of these modes. However, rail service can be inconsistent, which drives shipments to trucks.  

The mentality around staffing in the industry is usually "do more with less," and labor has historically been seen merely as a cost center. Staffing changes as economic conditions change and, when recovery happens, staffing levels rarely return to prior levels. Staff teams often move from one emergency to another, and are rarely able to work on process improvements that would markedly improve business operations.  

These challenges require a different type of TMS than other industries. With so many order changes and dynamic variables, an optimization engine within a TMS cannot keep up. The industry often has difficulty adhering to detailed volume commitments. Carrier diversification helps with service levels and pricing, so there is an increased need to diversify the carrier base as much as possible.  

A traditional TMS will have challenges executing and scheduling commodities transportation operations. The best way to lower supply chain costs and improve efficiencies in the supply chain is to utilize technologies like a multi-modal TMS with shipment visibility and analytics. 

Why is a TMS valuable? A TMS can:

• Automate tedious work, improving productivity by 35%, and employee satisfaction, as people want to work at companies that automate manual processes.
• Manage by exception, helping employees focus only on the shipments that need attention.
• Reduce costs. Shippers see a cost reduction of 3-10% and savings of over $110 per load.
• Improve service. Real-time data is available for customers to help themselves, and on-time deliveries increase by 20%.
• Manage cash flow. Automated systems verify every invoice, so shippers only pay what they owe. 

When all the above key features are available in the TMS you choose, shippers can achieve a saving of 10% of freight spend through process automation. Using optimization and tendering, shippers will receive a demonstrable impact on freight spend. Scheduling functions enable shippers to reduce on-site dwell and associated detention fees by up to 77%. Auditing and payment capabilities may reduce total line haul spend by 2-4%. 

Outlook: The rapidly changing conditions of the market are in the shipper's favor. But think about two years ago. Do you wish you had been better prepared and done something beforehand? Take action now while the market is favorable. Use a TMS that reduces tedious work for employees, allowing them to focus on shipments and issues that really matter. With self-scheduling, give carriers the flexibility to pick up or drop off when they want to.

Resource Link:

www.intellitrans.com