An automated dispatch management system can provide the missing link for ocean carriers, 3PLs/forwarders and beneficial cargo owners who must reduce the cost of drayage. In addition to providing critical pickup and delivery data, these systems can save companies substantial time and money by automating routine workflow, and eliminating other labor-intensive tasks such as invoice reconciliation. Consider this: Without a means of automatically identifying invoice amounts that exceed rate agreements, how often has an incorrect invoice been paid simply because it would take too much time to investigate?
Choosing the right solution can be difficult, but the decision process is made easier following these 10 tips:
1. Define your dispatch system needs.
Understanding your needs and assigning a value to them will help prioritize your solution requirements. This exercise may result in creating a shopping list of features important to you as part of a turnkey dispatch system, or you may determine your existing transportation management system could be quickly enhanced with a modest investment to meet your goals.
2. Implement drayage management best practices.
Implementing best practices in drayage management is all about achieving the highest efficiency, at the lowest cost to achieve the greatest customer satisfaction. This means every task, every event and every activity can be automated, measured, optimized and monitored to ensure compliance, while using the least amount of resources, thereby lowering the cost per dray. For example, eliminate the administration and potential friction caused by payment disputes by requiring acceptance of work order amendments (assessorials) as they occur. Make sure your best practices are not entirely based on internal analysis or you will risk missing valuable lessons from other operators. If you plan to conduct your own study, be prepared to invest considerable time and effort. Better yet, talk to commercial drayage providers and inquire how their systems have implemented best practices based on their practical experience.
3. Establish relevant KPIs.
The hidden value of a dispatch system is in its ability to help better manage your drayage business by quantifying activity so you can make decisions that help drive down internal and external costs, and improve productivity and customer service. Start by identifying and quantifying the operational pain points that affect your success and, where applicable, turn these into measurements transparent to both originators and trucking companies. Consider what factors affect your transportation budget, including, for example, the volume of dispatches performed per individual, the transportation spend per drayage partner, the average cost per dray, assessorial cost per drayage partner per dray, on-time performance of appointments vs. deliveries, etc. Who are your best performing trucking company partners? How has this data trended over time?
4. Avoid developing a dispatch system yourself.
Because every originator of drayage work orders manages the drayage process in a similar way, often using many of the same third-party drayage operators, there is little strategic rationale for developing your own system. This is especially true considering there are viable commercial alternatives, including commercial providers that make dispatch solutions part of their core business and continue to improve them, offering substantially greater economies of scale.
5. Extend your existing transportation management system.
Some dispatch systems operate independently as turnkey solutions and others can link to an existing proprietary or commercial transportation management system through standard, proven data integration. Ideally, they can do both, providing the flexibility to leverage a turnkey system right away to capitalize on near-term benefits and allowing the option of integrating later with a proprietary or other commercial application without reinvesting in a new dispatch system. The key is to determine your operational requirements, compare them to commercial offerings and identify the potential gaps between the two. Why pay for a comprehensive system when only one or two key features are needed?
6. Connect your drayage partners.
Your drayage solution must provide a convenient means for motor carriers to:
— Confirm acceptance or rejection of the work order.
— Send and receive drayage information such as delivery/pickup and return details.
— Exchange invoice information — with options to automate their payment.
— Exercise more equipment reloads to help minimize costly unladen trips.
— Provide instant, automatic proof-of-delivery.
Because up to 20 percent of a company’s preferred trucking company partner list can change annually, new connections are often required on an ongoing basis. If you choose to manage data connectivity yourself, depending on the number of drayage partners, expect to dedicate one or more persons to this task on an ongoing basis — which is no small expense. Or tap into an existing drayage network through a commercial solutions provider and gain the immediate benefit of using established data connections, quicker implementation and avoid ongoing cost burdens associated with managing partners’ data connections systems.
7. Utilize the added value of a broader drayage network.
The case for building your own dispatch system may be sizably diminished when considering two key factors that are not obtainable on your own:
— The added benefit of comparative performance benchmarking across a larger roster of vendor partners.
— The ability to automate equipment reloads across a much broader network of potential drayage partners and carriers, including drayage companies performing merchant haulage.
8. Reload equipment and pay less than roundtrip rates by connecting to drayage communities.
Even a small reduction in transportation expense can dramatically increase profit on every drayage move. Paying less than the roundtrip cost per move by pairing specific import and export dispatches and reloading equipment can yield savings of $130 to $330 or more per trip in some cases. Missing information creates problems in equipment reload execution lacking details such as matching equipment size/type, appointment compatibility and equipment ownership. The alternative is to enable originators to use Web-based systems to leverage a broad community of dray operators that can identify compatible import and export matches. In light of the potential savings per reload, this benefit alone can easily outweigh the value of building and operating your own system.
9. Consider a software-as-a-service (SaaS) solution over a conventional installed software product.
SaaS or on-demand Web-based applications have been proven to be more cost-effective and faster to deploy. Because there is no software to develop or install, SaaS offerings require no significant upfront investment of capital and IT resources. SaaS solutions deliver their services over the Web, and convenient access is available anywhere and at any time using only a standard Web browser and an Internet connection.
10. Implement a system sooner rather than later to capitalize on cost reductions.
Designing and building a proprietary system may provide the opportunity for proprietary customization, but the trade-off is added expense and a very high opportunity cost. Development can be expensive, risk-ridden and demands significant time and resources from resource-constrained IT departments. Deployment and ongoing maintenance requires additional resource commitment. A basic dispatch system can require two to three years to design and develop and another one to two years to initially deploy, depending on the number of trucking partners involved. Leveraging a Web-based application generates substantial savings sooner, and represents an amount that has the potential to eclipse the entire cost of developing and implementing a customized system.