Freight Management Companies

Why are Freight Management Companies Important?

Freight management is the key to successful logistics operations. The core of every business that sells a product or service is to satisfy their customers by delivering their orders to the correct destination, on time, without damage or loss, and at the lowest possible cost.

To make this happen, businesses must find ways to organize and execute their freight shipping plans without letting delays and disruptions interrupt the cycle. Effective freight management allows companies to handle the arrangement of transportation, either themselves or through a third-party, to deliver freight to customers.

Freight management is more than just overseeing freight transportation; it also comprises of:

• Route optimization
• Vendor and carrier management
• Data collection
• Business intelligence
• Warehouse and inventory management
• Rate negotiation
• Consolidation of operations
• Integration of new technologies
• International shipping management
• Claims management

A freight management company takes on all responsibilities for your business. This allows you to focus on your core objectives without being hindered by the complexities of freight shipping. It also allows you to collect and review data based on key performance indicators (KPIs) and metrics set by you and the third-party service providers to determine areas of improvement.

Other key factors that make freight management so crucial for businesses include:

• Visibility and transparency: Stakeholders are able to see a clear picture of your business operations if your logistics are straightforward. Communication will also improve between departments if your team is transparent about your business plans.
• Better technology and flexibility: By incorporating the latest technology, like AI, automation, and augmented reality (AR), into your logistics operations, you can streamline the process and make stakeholders more flexible to changes in the process.
• Improved customer service: With smoothed-out freight shipping, your customers can receive their deliveries on time and in good condition.
• Reduced costs: Outsourcing your logistics operations can reduce wasted effort and expenses, especially if you lack experience.

Freight Management Companies vs. Freight Forwarding

Freight management companies and freight forwarders are similar in many ways, as both handle various aspects of the logistics process to help businesses transport freight from one location to another. However, they differ in the depth of services they offer.

Freight management companies handle every aspect of logistics a company needs, from warehousing, fulfillment, distribution, and transportation. They work closely with their business clients, taking liability for the shipment for them. While some of these companies may not transport the shipment themselves, they may have connections with other carriers that will do it on their behalf.

Freight forwarders specialize solely in freight transportation. They serve as intermediaries between shippers and carriers, managing various aspects of freight shipping, such as international shipping, customs clearance, and documentation. However, they do not take responsibility for their clients’ freight and do not engage in other logistical processes like warehousing, inventory management, or fulfillment.

The best way for a business to decide between a freight management company and a freight forwarding company is to determine how much of the logistics process they want to be a part of. If businesses have experience with logistics and only need help in some parts of the process, like booking, tracking, and filing claims, freight forwarding services are the way to go.

If, however, businesses do not have much experience with logistics and need more in-depth assistance, then a freight management company may be the correct logistics provider. They can handle most, if not all, of the logistics aspects of your business while also reducing costs through leveraging their carrier connections.