Total Cost of Visibility for Freight Brokers & 3PLs

Measuring your Total Cost of Visibility for 3PLs and Brokers

For nearly all businesses, supply chain disruptions have costs and consequences which impact the company’s ability to serve its customers and maximize revenue. To offset the impact of late loads or unreported delays, shippers are increasingly requiring 100 percent, real-time visibility of freight location and status. According to American Shipper’s 2016 Visibility Benchmark Study, 90 percent of shippers who embrace load tracking solutions now indicate that freight visibility is viewed as a core service offering. Thus, they are using visibility capabilities as a key factor when choosing brokers, 3PLs, and carriers to haul their loads.

By using Descartes MacroPoint’s Total Cost of Visibility (TCV) calculator, you can see how implementing a visibility solution gives you the ability to improve your own operations and in turn provide your customers with better service.

The True Value of Freight Visibility

Rising demand for increased freight visibility includes requirements for tracking loads, including arrivals and departures and in-transit updates, as well as dynamic ETA’s. The technology in use is also called upon to provide proactive load management capabilities so shippers can focus on loads that have the potential to disrupt operations.

Realizing the value of visibility, shippers are willing to incur the cost of real-time, accurate and actionable load monitoring information. In fact, a recent Inbound Logistics industry survey indicated that most supply chain decision-makers rank visibility second only to cost reduction.

The Demand for Visibility

Not too long ago, it was virtually impossible to have real-time visibility into load location, dynamic ETA’s, and status across a supply chain. Today, the industry is trending toward 100 percent visibility. Descartes MacroPoint’s own Visibility Demand Index indicates a threefold increase in requirements by companies for real-time information on freight status. Shippers now expect 3PLs and brokers to let them know as early as possible when there are disruptions in the supply chain so they can focus on managing by exception to enable corrective action.

• The True Value of Freight Visibility - Unexpected cost savings opportunities
• The Demand for Visibility - No longer a luxury, now an expectation
• Total Cost of Visibility (TCV) - How much do you spend on manual check calls?
• Adding It Up - How will visibility benefit you?

Total Cost of Visibility (TCV)

Because the rapid growth of freight tracking is meeting a distinct need, and providing for higher supply chain productivity and efficiency, it is essential to accurately calculate and determine the Total Cost of Visibility (TCV) of any solution.

Cost Factors for Freight Visibility Solutions

• The number of loads to be tracked
• Network Effectiveness - average acceptance rate of automated tracking vs. all load tracking requested
• The number of loads being tracked with an automated solution
• The cost per load for automated tracking
• The number of loads being tracked manually
• The cost per load for manual tracking

Using these factors, a simple set of calculations will provide a clear picture of the real cost of load tracking and the TCV.

Adding It Up

The ability to meet the freight visibility requirements of shippers can mean increasingly higher levels of customer satisfaction. Calculating freight visibility effectiveness can mean the difference between securing their business or losing out on hauling opportunities. MacroPoint’s TCV is unmatched in the industry. Based on our research, a medium-sized 3PL moving 100,000 loads annually could reduce its operational and administrative costs by nearly $440,000 simply by automating the majority of their check call process.

The Descartes MacroPoint automated freight tracking solution offers a single point of integration for shippers, 3PLs, brokers, and carriers. Integrated with every major TMS system, its control tower style freight visibility software provides automated monitoring and tracking and real-time load location visibility using in-cab devices, trailer or container cargo tracking systems, or cell phones.