Life is risky, when one thing goes wrong, it can set off a course of events that lead to other problems. Now, we can’t remove all your risks but there are a few things we can do. A TMS (such as Tailwind Broker & Carrier TMS…) can help you manage the five most common risks faced in freight transportation.
1. Losing Customers
The biggest asset your company has are your customer relationships. When we talk about losing customers, we are not talking about the risk of competition, which is always a given, but rather the risk that you either forget about some customers because you are not tracking them, or someone in your business decides they want to start their own – and takes a bunch of those relationships with them.
The biggest advantage of a TMS system is the ‘data asset’ it provides – the centralized database of your customers, as well as all the details on your interactions and transactions with them – all in one place.
This database needs to be protected and secure, and the people who use it should be vetted. If your database is in the cloud you’re protected from someone just walking out of your office with a rolodex. By keeping it online, it’s not just in the heads of a few key people in your company.
The value that someone is willing to pay for your business is not only based on your revenues and profits, but the tangible data asset – the customers and resources – at your disposal. If you do not have this under control or managed, then you are in a risky situation because your business is effectively walking out of your office every day – sitting inside the heads of your employees and staff.
2. Getting Shut Down by the DOT or Transport Canada
The solution to surviving a DOT or Transport Canada audit is pretty simple – you have to keep accurate records. Doing that can be time consuming, so ultimately you need to make it as easy as possible.
If you run assets, a TMS keeps track of your truck and trailer maintenance. It also allows you to track driver performance and behaviour – from traffic violations and accidents, and beyond that, to also include any cargo claims.
3. Missing Payments
Payments Customers Owe You – A customer won’t provide a payment if they don’t have an invoice requesting one. There are unfortunately a number of reasons why you may not invoice customers for your services:
- You might forget
- You may not have the paperwork (lost or late POD)
- The ‘Invoicing’ person is away…
One way to ensure that customers get invoiced is to shorten the cycle time from the delivery of the load to the issuing of the invoice.
Payments You Owe to Drivers or Carriers – Relationships are the key to success. This not only extends to your customers, but also to your drivers if you’re a trucking company, or your carriers if you’re a brokerage.
And if you do both – there’s an even greater variety of relationships to manage.
In today’s market there are a lot of loads, but not enough capacity to move them. Being slow or confusing with pay is one sure-fire way to lose a good driver or carrier.
4. Standing Still
As humans we have the innate desire to keep things in balance in a way that helps us live easier. But that very human desire runs up against a business world where we need to adapt to compete, and to grow.
We all know of the market shifts that are making it more difficult to find drivers. For many trucking companies, this may be the stimulus to get their brokerage authority and extend their services by brokering out to other carriers.
Conversely, a brokerage may come across the opportunity to buy a small trucking company to add to their offering.
It’s good to have a software application that can adjust to any situation.
Tailwind can help you run both your trucking side and brokerage within the same application – no additional investment required. The application allows for branches where you can operate different divisions and business units.
Additionally, it can be used by a trucking company or brokerage wanting to track the activities and performance of different parts of their business.
5. Relying on Outdated Technology
This risk can also fit in the ‘Standing Still’ umbrella – but we wanted to bring it to the forefront because it’s the focus of nearly every new call that we receive.
We have people struggling to keep their business organized because they’re growing and the old ‘Excel and a Whiteboard’ just isn’t working anymore.
There are others that don’t have the time to sit through multiple ‘needs assessment’ discussions just to get a leather-bound binder with a quote that involves far too high an investment, for a system that takes far too long to implement and even more time to learn – a system that’s still built on old client-server technology.
And then there are others who are tired of paying thousands upon thousands of dollars for annual maintenance on TMS systems that look like they were built when Risky Business was filmed.
Just being in business at all means that you are going to incur risk. But that doesn’t mean you can’t take tangible and prudent actions that lessen the likelihood that you will suffer from problems and failures. We understand that we can’t solve all your risk, but we feel that in using a TMS you can mitigate the five common ones covered here.
Editor’s note: This blog was originally written for Tailwind Transportation Software, Avoiding the Five Most Common Risks in the Risky Business of Freight Transportation.