Managing freight transportation is a complicated and demanding job. Managers are required to have a number of different talents, from effective communication and interpersonal skills to impressive logistical capabilities.
If you are new to the role of managing freight transportation then you are likely intimidated by the unique set of responsibilities. This guide is here to help you learn all you need to know about managing freight transportation.
What is Freight?
The term “freight” is used to describe the commercial transportation of goods in bulk. These goods can be transported via road, rail, aircraft, or ship. Freight differs from shipping because the former involves the transportation of a larger quantity of goods, whereas shipping can involve moving singular products. The list below outlines the basic information you need to know about the different types of freight transportation.
Trucks are the most commonly used form of freight transportation because of their cost and accessibility. However, if freight is coming from abroad it is likely you will have to use an “intermodal” freight system. This means more than one form of transport will be involved in the delivery of freight.
The most effective way of transporting freight by road is to use a full truckload. This means that the goods are under the supervision of one driver throughout the entirety of their journey, which keeps them safe.
Rail is also frequently used to transport freight across the country, but there are some distinct disadvantages. Namely, it is a less direct mode of transportation than road and the goods are not under such strict supervision. However, the main reason why rail is used is because of its relative low cost.
Sea freight is the most dominant form of global freight transportation. Freight is packed into shipping containers and transported in bulk on large ships. The price of transporting freight using shipping containers will vary on the currency that is being used, the destination it is coming from, and the season.
Although sea freight is the most commonly used form of transportation for global freight movement, airfreight is still used in some circumstances. Airfreight is most typically used when there is a high-value cargo being transported or a time-sensitive deadline.
Airfreight is much faster and more reliable than sea freight shipping, but it is also much more expensive. Now that you understand a bit more about the basics of freight transportation it is time to focus on what is involved in managing the freight transportation process.
The Logistics of Freight Transportation Management
Managing freight transportation is much more demanding than simply making sure that the vehicle gets from point A to point B. The skill and logistics involved in managing freight transportation are numerous and complex, and there are three main areas that are involved in successfully managing freight transportation logistics. These are order fulfilment, warehouse management, and transportation management.
Order fulfilment is the process of receiving, handling, and delivering goods to customers. Order fulfilment begins when a customer makes an order and ends when that product is delivered to the customer. Order fulfilment can also extend to managing the returns process if the customer is dissatisfied with the product they receive. The steps involved in the order fulfilment process include:
- Receiving shipments
- Storing inventory
- Processing orders
- Processing returns
Order fulfilment is one of the most critical steps involved in managing freight transportation. The most obvious reason why order fulfilment is so important is that it will directly dictate the nature of your relationship with customers.
If you are unable to supply your customers with the right delivery at the right time, then they likely end up returning the order. Research has found that customers who receive the wrong order or a damaged product are highly unlikely to shop with the business again. Order fulfilment can be a logistical nightmare.
With so much to manage, from receiving shipments to processing returns, it is easy for managers to get overwhelmed. When a manager loses control of the order fulfilment process then every other aspect of the freight transportation will suffer. You must find ways to stay on top of the order fulfilment process in order to retain control over all other processes.
The role of a freight transportation manager extends beyond order fulfilment to warehouse management. Not only will you need to focus on the delivery of goods to the customer but also on managing the physical storage space. Tasks and processes involved in warehouse management include:
- Arranging a warehouse and its inventory
- Maintaining equipment
- Managing new stock
- Managing warehouse performance
There are many reasons why warehouse management is one of the most important tasks on your agenda. Firstly, as manager of a warehouse, you are responsible for one of your company’s most valuable assets. As the company has likely invested the majority of its working capital into the stock, poor warehouse management can have server and potentially devastating consequences on the long-term health of the business.
Poor warehouse management can lead to an excess of outdated stock, which in turn will take up valuable space in your warehouse. This can also lead to issues surrounding productivity, as your employees find it increasingly difficult to navigate an overcrowded and messy warehouse floor. Problems with organization can unfortunately, have other serious consequences, as poor organization in a warehouse increases the likelihood of workplace injuries.
Poor warehouse management can also lead to low-quality output, which increases the likelihood of customer dissatisfaction and returns. When you are managing the warehouse you must have a very clear system in place. You need to be completely aware of what stock you have, where it is located, and who is in charge of managing each specific section. There is software on the market that can help you more effectively manage your warehouse to avoid potentially very costly consequences.
Transportation management is viewed as the final stage in freight transportation because it involves the delivery of a product to its destination. As Truckstop.com explains, there are many steps involved in transportation management, including:
- Choosing the most efficient mode of transportation
- Assigning vehicles and drivers to stock and destinations
- Managing a driver’s journey to a destination
- Monitoring progress
As the authority on transportation management, it is your duty to ensure that goods are being transported to their destination as efficiently as possible. That means that you are responsible for getting goods delivered on time and for ensuring that labour time is used as productively as possible.
It is also your responsibility to make sure that you are receiving the highest return on your investment in transportation costs. To ensure that you are managing transportation delivery as effectively as possible it is important to monitor the key performance indicators. This might include expected delivery times, fuel efficiency rates, maintenance costs, and loading and unloading times.
Your role is not only to organize the fastest and most efficient stock delivery; you are also managing a team of individuals. You are responsible for the health and safety of all the workers in the warehouse and on the road. There are rules on road safety, especially when it comes to heavy freight delivery. You need to ensure that your drivers are always maintaining a safe schedule and taking regular breaks.
As a manager of freight transportation, you hold important role. When you perform well, you safeguard your team members, improve customer satisfaction rates, reduce returns, and boost your company’s turnover. Far from being a cog in a larger delivery machine, you play a vital part in determining the long-term potential growth and success of your company.
Managing freight transportation is a complicated job, but luckily there are technologies on the market that can help you manage processes and workloads. You should take advantage of all the technology on the market to help you more effectively and efficiently manage freight transportation today.