In the context of globalization and the integration of supply chains across national borders, international transportation has gained in importance. In this context, the organization of goods movements over long distances is increasingly presenting companies with logistical challenges: In order to meet customer expectations and avoid bottlenecks, delays or failures of deliveries, a precise planning and coordination of the numerous processes is necessary. We explain how well-coordinated transport management not only increases the reliability of companies, but can also reduce costs and minimize environmental impact.
Logistics in transition: Transport management as part of SCM
Companies are well advised to continuously improve and develop their logistics and transportation strategies in order to meet the ever-changing demands of international flows of goods: Above all, the topic of sustainability, combined with the Supply Chain Act or the EU CSR Directive, is setting new standards in this regard and prompting companies to reconsider their supply chains.
The increasing complexity of processes and the coordination of all supply chain participants require a precise insight into a company’s transport logistics – the importance of real-time monitoring and integrative aspects has significantly increased over the past few years. As an important component of supply chain management (SCM), transportation management is responsible for controlling and optimizing the physical movement of goods and commodities between the various nodes of the supply chain. But given the advances in technology, what is it that our supply chains need to be able to keep up with a world in transition?
Coordination of various processes: About not administrating the movement of goods, but actively managing them instead
Route optimization, monitoring, tracking – there’s one thing that modern transport management should do above all: It must ensure that ordered goods and merchandise arrive at their destination safely, on time and, if possible, sustainably. However, it is no longer just a matter of managing the movement of goods from A to B, but of actively controlling it, integrating it into other processes and constantly optimizing it. The demands on transport management have increased enormously, not least in the wake of the digital transformation.
As the heart of the supply chain, transportation can no longer be considered a singular entity: Rather, it is part of a complex supply network that includes both inbound and outbound processes. These collaborative processes include, for example, where and how goods are packed, who picks them up, when they arrive at which warehouse, and how loading capacities can be fully utilized to minimize the number of shipments. All information relevant to transport operations must be added to and updated by successive supply chain actors so that they can actively manage them and, if necessary, make improvements at appropriate points. Transparency and data exchange are the key elements to make the different ecosystems of processes compatible. Often, silo systems have to be broken down for this purpose and the IT architecture of companies needs to be realigned.
With a glance at the entire supply chain, efficient transport management is inextricably linked to:
- Inbound and outbound processes
- Collaboration with suppliers
- Freight management
- Warehouse management and warehousing solutions
Transportation management: Digital solutions for controlling physical goods
Transportation management is becoming increasingly digital as part of a strategic SCM and can use various technologies to optimize processes:
- Geographic Information Systems (GIS), route planning software and traffic management systems are used to determine the most efficient and cost-effective routes. In order to meet delivery times and avoid detours, various factors such as distance, road and weather conditions, traffic situation and targeted delivery times are taken into account. The choice of the most suitable mode of transport is also included in the calculation: Should the goods be shipped by ship, plane, road or rail?
- With the help of GPS tracking technologies, mobile communications or telematics systems, shipments are continuously tracked and monitored during transportation – in the back-end system, logistics managers are informed in real time about where and in what condition the goods are at any given time. Thus, they react promptly to potential disruptions or delays.
- The use of tracking technologies also makes it possible to trace the path of goods from the point of origin to delivery to the end customer and to increase transparency and security along the supply chain. A further benefit: To ensure that end customers experience a high level of service, they often have access to the tracking system themselves and can follow the transportation of goods – such transparent processes increase customer satisfaction and strengthen trust between the contractual partners.
- Artificial intelligence and machine learning can be used to analyze historical data, identify trends and patterns, and make better predictions about traffic congestion, delivery times, etc.
- By using cloud computing, transportation companies can store and manage their data and applications in a secure, flexible and scalable environment. Cloud-based solutions provide a cost-effective way to access critical information from multiple locations and facilitate collaboration between stakeholders.
When switching to digital technologies, external expertise can be purposeful and efficient: logistics service providers such as Hermes International offer specialized, highly integrative platform solutions and support with the evaluation of existing data. Locations, routes, fuel consumption, loading and unloading of means of transportation – vast amounts of information are produced along the supply chain. Automated document management ensures a clear organization and management of all relevant documents and files, saves time and improves collaboration in transport logistics. Responsible parties can intervene predictively and ad-hoc in processes at any time and actively control them.
More sustainability through optimized transport management
Not least, transportation management can make a significant contribution to a company’s sustainability efforts and save significant costs in the process. Shorter, optimized routes reduce fuel consumption and emissions, while the consolidation of shipments avoids empty runs. Choosing more environmentally friendly modes of transportation also helps to reduce negative impacts on the natural environment. Efficient cargo and freight management allows the capacity of vehicles and containers to be fully utilized, thus reducing the number of transports needed. Furthermore, monitoring and promoting environmentally conscious driving behavior, for example through speed limits, and CO2 tracking control the release of harmful emissions. Working with suppliers who meet sustainability criteria and offer environmentally friendly transport methods also helps companies to reduce their environmental footprint as well as the cost of moving goods.
Conclusion: Transport management as the key to an optimized supply chain
Closely linked to upstream and downstream processes, transportation management is crucial for smooth, economical and sustainable logistics. The use of digital technologies can optimize routes, save costs and reduce environmental impact. The increased use of data and rising transparency make companies able to act faster in identifying potential disruptions: After all, only those who have the ability to react agilely and flexibly to new legal regulations and market conditions remain competitive and thus fit for the future. Further, they can position themselves as successful companies in a global environment.