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Why Freight Visibility is a Leading Concern for Shippers

Posted by Mihlfeld & Associates on Feb 11, 2019 9:50:00 AM

Is Ignorance Bliss?

“Ignorance is Bliss”

So goes the old adage; however, nowhere could this little saying be less true than in shipping. When you are a shipping manager who is responsible for millions of dollars worth of freight, ignorance is the least blissful state you could possibly be in. Ignorance is the opposite of bliss.

Year-after-year, Truck tonnage keeps blowing past previously set records and Intermodal Freight keeps steadily climbing in volume. Freight of all shapes and sizes is on the move all over the world in record breaking numbers.

With supply chains becoming exponentially more complex every year, knowing the exact status and location of the freight within a shipper’s care is quickly becoming one of the leading concerns for shippers all around the world. In fact, according to a recent study, 75% of shippers rank freight visibility as a chief concern in their supply chain, second only to cost reduction.

Why is freight visibility becoming such a hot topic in the world of logistics and supply? What are the effects of freight visibility and the lack of it? How does it apply to your company? We’ll explore all of those questions here.


Avoid Unreported Delays and Accidents

The most basic reason why shippers need to focus on visibility is to know what is happening with their shipments. There are few things more disruptive to a supply chain (and nerve-racking to a shipping manager) than losing track of an en route shipment.

The shipment could experience delays, accrue unexpected charges, or worst of all, have an incident of some kind. Carriers losing a shipment at a dock is a common occurrence in shipping that often goes unnoticed until it causes a problem. In the worst case scenario, having a truck drive off the road is a literal nightmare for any shipper and being unaware and out of control of the aftermath is even worse.

According to the American Trucking Association, approximately 70% of all freight shipped across North America is transported by truck. Without the proper systems in place, losing your freight in the sea of trucks and shipments can create ripple effects throughout your organization and your supply chain.

By focusing on the visibility of your supply chain you ensure that you are always on top of anything that happens to your freight between your warehouse and the destination.


Potential Business Expansion Opportunities

Every year, companies lose business because of their lack of visibility across their supply chain. In a recent study by American Shipper, 54% of businesses said they lost business or were in the dark about whether they had or hadn’t lost business due to poor supply chain visibility.

Companies are combining their advanced tracking and visibility with big data analysis. This combination allows them to not only predict when to schedule new shipments, but also where they should concentrate future business.

In a way, this means shippers want more than 100% visibility.

In the realm of predictive analysis, freight visibility opens up many opportunities for businesses to take advantage of beyond seeing their freight in real time; it allows them to target geographic regions for future sales and forecast potential sales for certain customers.

In this regard, freight visibility becomes not only a shipping tool but also a valuable sales tool.


Visibility is a Core Service for 3PLs

The growing complexity across all supply chain networks has raised awareness in both shippers and 3PLs to the importance of freight visibility. In fact, a reported 61% of shippers and 90% of 3PLs label freight visibility as absolutely critical to the success of a supply chain.

The advancement of such technologies as TMSs, Cloud Computing, and Big Data have increased the usability and utility of freight visibility software. 3PLs are on the forefront of these advances and now offer freight visibility as a core service to their clients.

With the direction the logistics industry is headed, software development has become a top priority for 3PLs. In the coming years, shippers should expect to see continued improvements in freight visibility across all modes of transportation.


Your Competitors Have Freight Visibility

When you want to do something, most of the time giving the reason: “everyone else is doing it” is not a good reason. However, once it comes to business advantages that leave competitors in the dust, “everyone else is doing it” becomes a statement that managers cannot ignore.

In a global survey of shippers, 6% claimed to have “full visibility” of their supply chain. For smaller companies, this may indeed be the case, but for larger the companies, this is never the case. For most companies, in the current shipping environment, full visibility is not yet possible.

Companies who claim to have full visibility are most likely referring to track and trace methods. In the modern shipping landscape, solutions to the blind spots left by track and trace are being demanded by shippers.

Companies now demand minute by minute, mile by mile status updates throughout the entire shipment life cycle. As stated above, one delay can cause ripples through an entire supply chain and have consequences far into the future of the company. Full visibility has the potential to save the U.S. economy billions of dollars annually.

Reportedly, as of 2017, 71% of shippers outsourced to 3PLs for freight visibility software and services. This number is projected to continue growing as visibility software continues advancing. 

Don’t let your company fall behind. Connect with a 3PL who offers the best solutions for your company.


Why Isn’t Total Freight Visibility Possible?

As stated above, full 100% freight visibility is yet a thing of the future. Why is that? Is the technology not available yet? Is the cost too high?

Freight visibility has been a looming issue for years and has only recently become an issue 3PLs and shippers are focusing attention on. Software development in this area has experienced a large bump in recent years to provide shippers real-time insights on their freight.

A deciding factor in implementing real-time freight visibility is cooperation between the shipper, carrier, and 3PL. Having every party work together to adopt the same systems and follow the same procedures is the primary difficulty in creating a sustainable freight visibility system. There will inevitably be pushback from at least one party, and the rise of intermodal makes the process that much more complex because that invites additional parties into the system.

As of early 2019, the actual ROI of total freight visibility is unknown because the processes are still only theoretical. As more processes are introduced and adopted across various modes and supply chains, the true value of total freight visibility will become clear.


The Future of Freight Visibility

The increasing complexity of our supply chain environment necessitates the growing prevalence of freight visibility. Total visibility is unexplored territory but some things are certain:

  1. It will reduce delays and make shipping incidents more manageable for shippers
  2. It will create opportunities for business expansion and improved supply chain efficiency
  3. More 3PLs offer freight visibility software than ever before
  4. More shippers use freight visibility software than ever before

It is an exciting time for shippers, carriers, and 3PLs. Total freight visibility offers many new opportunities in the world of logistics and shipping and it is looming on the horizon.

Topics: Logistics Technology

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Mihlfeld & Associates

Logistics & Technology 

We specialize in custom solutions for transportation management, software, cost reduction, invoice processing, and much more. In short, we exist to save your company money on transportation and logistics. We hope this blog helps you in your journey toward better transportation practices.

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