Why Freight Visibility Is Important

A guide to understanding the competitive advantages provided by real-time visibility.

What is commonly called the "supply chain" may immediately bring up an image of a series of interconnected links. What might not be as readily seen on that chain is the constant movement of freight. Along the supply chain, goods in various stages must be transported to and from raw materials suppliers, manufacturers, wholesale distributors, retailers and end users. At every step along the way, brokers, 3PLs and freight haulers are involved in bringing a product to market. Because of this, visibility into freight location and status is becoming increasingly essential.

Consequences of a late load

This fast-paced, oftentimes sensitive process can be impacted at any moment by a variety of factors. To satisfy delivery needs, brokers and carriers monitor on-time delivery of goods. If they don’t, the process slows down, leading to costly consequences. In a recent industry study on supply chain technology from American Shipper, 54 percent of 3PLs said they either lost business or did not know if they lost business due to their visibility offerings. A late load or an unreported delay can cause the following:

• A factory might need to idle or ramp up a production line accordingly.
• A distribution operation might have to adjust staffing on its loading docks to account for both unproductive time and the need for personnel when a load does finally arrive.
• A retailer would have to work around the lack of inventory on store shelves.

The industry survey also asked key supply chain decision makers which transportation and logistics challenges are most critical to their enterprises. Nearly three-fourths of the respondents ranked visibility second only to cost reduction. In another study, participants identified agility and risk reduction as the biggest benefits of supply chain visibility.

High Importance of Visibility

To offset challenges that threaten to disrupt their supply chains, manufacturers, wholesalers, retailers and other shippers are requiring 100 percent visibility into freight location and status. The way the market views freight visibility has changed over the past few years. Previous simple track-and-trace methods are no longer seen as a means of providing true end-to-end supply chain visibility. Today, business intelligence and analytics tools are now ranked much higher in importance.

The higher demand for increased load visibility drives requirements for tracking loads and accessing information about current load status, including arrivals and departures at pick-up and destination locations, and in-transit updates using actual GPS-based positioning.

An advanced load tracking solution designed to provide more frequent and detailed updates automatically on shipment status through a single point of integration, regardless of the mobile device in use, can address visibility needs effectively. Additionally, through integration with a carrier’s enterprise and transportation management systems, tracking information can be directed to shippers faster and more frequently.

Managing by Exception

Today, shippers are requiring more than 100 percent visibility. They are demanding the ability to focus on late and off-schedule loads that threaten to disrupt their operations. Managing loads by exception using predictive analytics to drive proactive management practices leads to more informed decisions that ensure efficiency and productivity across the supply chain. In a recent study of loads tracked using the Descartes MacroPoint freight-tracking platform, 12.1 percent arrived after the originally scheduled time. In other words, over 10% are "off schedule" or "significantly delinquent". Based on that data, a predictive analytics capability would mean that shippers only have to address issues with a small percentage of their loads instead of expending management time on 100% of the loads in their supply chains.

Today, 71 percent of shippers use carriers’ tools or rely on outside software providers for that information, but only six percent of shippers have real time visibility due to EDI latency and the inability of those systems to provide up-to-the-minute information. Brokers and 3PLs have embraced freight visibility in a large way. Ninety percent believe visibility is a core service offering and that shippers are using visibility capabilities as a metric when choosing service providers.

Taking Advantage

Just a few short years ago, it was unrealistic to expect total visibility into load locations and status across a supply chain. Today, visibility tools and technologies are important and readily available. The strength of any supply chain is in both its individual links and in the connections between them. As shippers, manufacturers, wholesalers and retailers increasingly require load location visibility, freight tracking is quickly becoming a necessity. If you consider that more than 75 percent of all cargo—over 10.5 billion tons of freight annually—in North America is hauled by trucks, the ability to meet freight visibility requirements from a growing number of companies can mean the difference between securing their business or losing out on a significant number of freight hauling opportunities.

What to Look for in a Visibility Partner

Effective load tracking is a partnership between brokers, carriers and 3PLs, who increasingly are turning to a fourth type of partner – a provider who can deliver accurate, real-time information through an established, proven visibility platform. For maximum effectiveness, a visibility partner should have these attributes:

• An extensive history of servicing large and complex logistics companies.
• A cloud-based platform that is highly-scalable with proven uptime, a trusted disaster recovery solution and annual SSAE 16 SOC audits.
• A brand name respected by carriers and drivers alike for its commitment to meeting all compliance requirements.
• A track record of continually innovating its products to meet customer and industry needs.
• A universally connected network that creates efficiencies and reduces costs for management and operations.

In addition, the selected visibility partner’s technology should be device-agnostic and easily able to integrate with the wide range of transportation management systems currently in use by enterprises across all industry segments. A freight tracking solution provider that demonstrates all of these benefits – along with the ability to understand and develop a visibility strategy to meet specific needs and circumstances – can become a truly valuable partner by making its technology work for each of its customers.