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How small businesses can benefit from a TMS system

04.30.2020 - 11:31 AM Comments: 0

Small businesses in the trucking industry have not had it easy, as they’ve been in constant competition with super-carriers and other large fleets. 

Nevertheless, small trucking operations continue to be a crucial economic cog in the success of the trucking industry. 

According to statistics from 2018 provided by the American Trucking Associations, small fleets with 20 or fewer trucks made up 97.4 percent of the trucking industry.

With such a large share of the industry, small fleets bring in an abundance of revenue and have created thousands of jobs in the process. 

Throughout the boom of the market in 2017 and 2018, business for small carriers boomed. This caused many to begin expanding their operations and growing their companies. 

Jobs in fleets with fewer than 100 trucks grew exponentially from 2012-2018, reaching 322,000. This also coincided with a 4 percent growth among smaller companies, according to Trucks.com.

However, after 2019’s market contraction, many of the gains made in the past 2 years were lost. Hundreds of small trucking operations ceased their business and not much is projected to improve this year according to industry experts.

Because of the unforeseen economic conditions that small businesses have had, many have begun to adapt and have adopted new business strategies that have allowed their business to thrive.

Consequently, even with a market contraction, Trucking Info reported in May of 2019 that 52% of small carriers they spoke to said their company was growing.

Those small businesses that continue to grow have utilized a plethora of strategies, and among them has been the use of new technologies, which have been leveraged to automate and optimize day-to-day operations. One specific solution that has continuously become the standard in the industry is a transportation management system (TMS).

Today, we’ll be breaking down how a TMS can help small businesses with top-to-bottom organization and increasing overall productivity and efficiency.

Reduce business costs

A TMS, such as UTECH TMS, offers comprehensive features that allow a business to track assets, collect crucial data, store documents, and other important information, among many other things.

Overall, it helps improve the day-to-day operations of your business from A to Z by helping you pinpoint inefficiencies and automating processes that would otherwise be time-consuming. 

Above all else, however, a TMS will ultimately affect your bottom line in a positive manner. By reducing financial costs, small businesses can maximize their profitability.

The system can accomplish this by facilitating freight planning and execution, as well as dispatching and resource utilization. Basically, by organizing your resources through a TMS, you can find better ways to use each asset to its fullest potential. 

This can come in the form of finding optimal routes by reviewing analytics, which saves time and gas, two aspects that are crucial to reducing costs. Additionally, you can leverage the system’s analytic capabilities to keep track of fuel waste and idle times, which allows you to adjust your operation accordingly. 

The fact is, fuel is a fixed cost for an operation of any size. Subsequently, it consistently ranks as the top expense throughout the trucking industry, making up 39% of total operating costs, according to The Truckers Report. 

Nevertheless, tracking fuel waste and idle times is only one way to use the analytical capabilities of a TMS, and as time goes by, businesses will find a variety of ways to leverage the system to save on costs annually.

Standardize business

Generally speaking, creating a standard way to do some daily tasks helps with productivity and efficiency, as it allows you to spend time working on bigger projects.

Things just run smoother when there’s a system in place, which a TMS helps you create by connecting every facet of your business. Another added bonus of utilizing a system such as UTECH TMS is that you can further standardize operations without forcing employees to learn new technologies.

By integrating tech you’re already using with a TMS, such as Quickbooks or DAT, you can greatly improve productivity by combining familiar solutions with the organizational benefits of a TMS. 

Additionally, a good TMS will allow your company to store documents and other important business information in one place, where everyone in a company can easily access when necessary. This alone not only facilitates their work but also improves efficiency for a company as a whole.

A transportation management system can also assist with improving customer experience by automating certain processes such as generating quotes and invoices. This also eliminates human error, which can be costly depending on how severe the problem is. 

By leveraging this systematic approach, companies can determine the necessities of their customers with ease, as you’ll have stored data and information that can be analyzed throughout your company, rather than having it under the supervision of a few. 

Ultimately, by having one source for all necessary data where all activity can be tracked and analyzed, your business can standardize and improve many of its repetitious day-to-day duties, while also further decreasing costs. 

Improve safety

By all accounts, safety is the most important and necessary factor in running a trucking company of any size. For small businesses, keeping track of safety can become more difficult, especially if you don’t have the resources to do so on a consistent basis.

With a TMS, however, businesses can track a variety of potential liabilities. These include driver's license expirations, CSA scores, insurances, and equipment maintenance. 

Having a TMS available to track the aforementioned factors can be crucial to making sure your business is abiding by safety regulations. For example, a TMS will notify a safety department when a driver’s license is going to expire, which allows you to make a decision in a timely manner.

This also goes for equipment maintenance. Instead of waiting until the last second to fix an issue, which can ultimately cost you thousands of dollars, you can have the system notify you when it’s time to perform maintenance. 

With the safety capabilities of a TMS system, businesses can stay on top of all the necessary aspects that go into running a good and responsible trucking operation, which can positively affect their CSA scores. The fact is, the better a CSA score, the more opportunities will arise to gain new business.

In addition to tracking crucial information for all of your assets, you can also keep track of your assets while they’re on the road. 

With a TMS, a business can provide its customers with API keys that allow them to track their load's location and estimated time of delivery. By providing customers with tracking information, small businesses can build trust with their customer base and leverage this trust to gain more business. 

Considering that the U.S. and Canada combined lost about $14 million because of cargo theft and the average worth of lost loads was $142,342, allowing customers to track their assets can prove to be pivotal in growing and expanding a company while building a good reputation for your business. 

Overall, using a TMS can prove to be extremely beneficial for a small business that is looking to continue to grow. With the variety of comprehensive features that are available, utilizing a TMS should be crucial to your business as a whole.

If you’re interested in trying UTECH TMS, please give us a call at 888-228-4460, and a sales representative will help you get sorted out!

So, what do you think about transportation management systems? Let us know in the comments or on social media!

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