TMS Solutions for Freight Brokers: The Myth of the Tier One System
Shippers want their freight brokers to have top-notch transportation management systems (TMS). When evaluating brokers and their systems, some shippers will look to see if the broker has one of the well-known, tier one TMS systems. If they do, the shipper assumes that the broker has a leg up on most other brokers, who lack the name-brand systems.
Big mistake. Shippers perceive off-the-shelf, tier one TMS systems as having sophistication that is simply not there.
These TMS packages can manage the movement of goods from point A to point B, and allow you to track shipments along the way. But there is very little intelligence built into these TMS solutions specifically for freight capacity management. And that is, after all, the exact kind of data you want your broker to have.
Dig Deeper on a Broker's TMS Solutions
When evaluating brokers, dig deeper on the systems side. Here are some questions you can ask to determine if their systems are capable of delivering real value:
How can your system help match my freight with the right carriers?
Instead of the brand name systems, many advanced brokers have sophisticated proprietary systems that include a database of available capacity in the market, including the backhaul capacity of regional carriers and private fleets. These brokers can compare your lanes against this available capacity to create a win-win match. The carriers fill empty backhauls on their regular runs and you, in turn, get an aggressive backhaul rate and an experience that is more like working with an asset-based carrier.
Can your system exclude my existing carriers?
Brokers like Redwood Logistics can build these exclusions into our matching logic so that we are not reaching out to your current partners. Off-the-shelf TMS solutions are not built to do this.
How can you reduce my risk?
Again, it goes back to the core function of a broker to match demand with the right capacity. The system should have real-time data on carriers, such as safety record, years in business, average fleet age, and insurance liability limits. This data can be used to eliminate certain carriers that do not meet your safety and liability standards. Tier one TMS solutions can rate and route your freight, but they don’t maintain this detailed carrier data.
The Myth of the Tier One TMS
Tier one TMS solutions have solid transportation management functionality, but very little built-in intelligence. You want both and should demand both from your freight broker. Don’t fall for the marquee names. Brokers who lack the intelligent systems to help match your freight with the right carriers are not getting the job done.