Freight Management and How It Works: Main Processes and Software

What is freight management?

See the role of freight management in the whole supply chain ecosystem
The overview of freight management processes and corresponding software

Selecting and managing vendors and carriers

  1. When you have an order that needs to be delivered, the system creates a pickup request. Some requests are scheduled up front, some work on a one-off basis.
  2. The system then pulls out the list of suitable and available carriers depending on chosen parameters. You then choose the carrier manually or allow the system to auto-pick the cheapest or best performing option. If you’re using a freight broker, they will do this for you using the same method.
  3. A broker, a TMS, or a shipper can then check if the carrier is available and schedule the load and pickup time.
  4. A shipper/broker receives information about the load distribution, assigned driver and vehicle, confirms it, and the driver signs the (digital) bill of lading.
  5. A shipper can track and trace the package en route and provide this information to the customer as well.
  6. After the consignee accepts the shipment, the carrier is invoiced for their services.

Route, load, and transport optimization

Route and schedule optimization

OptimoRoute’s interface for planning routes

Load planning

Documentation and regulations management

Example of a template-based freight document management system
Source: Transcount

Claim management

Tariffs and regulations management

  • waybills,
  • bills of lading,
  • packing lists (also called customs invoices),
  • certificates of origin,
  • dangerous goods notes, and so on.

Accounting

  1. Receiving freight quote and freight cost — the rate of shipping provided by the carrier.
  2. Receiving a freight invoice — the bill rendered by a carrier that contains all basic information about the shipment. It should match the bill of lading but it’s similar to any other invoice.
  3. Auditing freight and transportation invoices — the process of verifying invoice validity after they’re entered into your accounting system. After auditing, the bills are paid.
  4. Freight payment — accounts payable service for transportation invoices.
  5. Consolidating freight invoices — when invoices are consolidated to make payments once a week instead of every day. Often done by freight brokers and forwarders.
  6. Freight in and freight out — the shipping costs of bringing goods into the company and delivering them to customers.

Tracking and tracing shipments

Vehicle tracking via GPS

  • fuel consumptions,
  • driving style,
  • temperature inside trailers,
  • toll records,
  • open door sensors, etc.

Package tracking using barcodes and RFID

Maersk provides end-to-end visibility on your cargo via EDI

Data collection and analytics

  • track their carriers’ and partners’ KPIs and choose the better performing ones,
  • understand consumer patterns and adjust schedules according to them,
  • allocate warehouse bays based on GPS data from arriving trucks,
  • compare the costs of different transport modes and select the right ones.

The power of automation and outsourcing

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AltexSoft Inc

AltexSoft Inc

Being a Technology & Solution Consulting company, AltexSoft co-builds technology products to help companies accelerate growth.