A Guide for Cost-Efficient Transportation Operations

Technological advances and shifting consumer expectations are transforming the logistics and transportation industry.

As one of the backbones of international trade, the global logistic market size is expected to expand from USD 5.7 trillion in 2024 to USD 7.9 trillion by 2032.

Today, timing, cost, and efficiency are paramount in supply chain logistics.

As a logistic manager, you are responsible that goods are delivered on time, at optimal cost, and in compliance with various regulations.

Challenges such as rising fuel costs, tight delivery windows, and supply chain disruptions make it difficult for logistics managers to strike the right balance between cost efficiency and service quality.

In this guide, we will explore the challenges logistics managers face and how Planimatik’s digital freight software for optimized logistics can transform your logistics operation for better efficiency and reliability.

What Are Transportation Operations?

Transportation operations are an integral part of a broader supply chain management and logistics framework. It is the process of managing all the business’ transportation services.

This includes the management and coordination of the movement of goods or products from point A to point B within the supply chain. Effective transportation operations help maintain a smooth flow of goods between suppliers, manufacturers, warehouses, retailers, and end consumers.

The goal of transportation operations is that goods are delivered on time, in good condition, at the lowest possible cost. The best results are achieved with a combination of planning, execution, technology, and ongoing management.

The costs of transportation operations can fluctuate at times for a variety of reasons such as fuel cost - one of the biggest expenses in transportation. Also, driver shortages, labor costs, maintenance, and equipment costs contribute to expenses. You can manage costs with strategic planning and streamlining processes to cut inefficiencies.

What Does a Transportation Operations Manager Do?

If you want to keep transportation operations running smoothly, hire a great transportation operations manager.

As a transportation manager, you oversee the planning, implementation, and management of transportation activities in a business. You manage the movement of products, coordinate transportation resources, and optimize logistics operations.

You may interface with suppliers, shippers, and drivers, select carriers, and interface with transportation management software (TMS). You may also handle purchase orders, mitigate risks and ensure safety, track fuel use, set vehicle maintenance schedules, and manage shipment delays and claims.

Logistic managers and transportation operation managers both play important roles in supply chain management but their responsibilities and tasks differ in some ways.

The duties of a logistic manager:

• Manages a team of shippers, receivers, drivers, and other employees.

• Organizes transportation needs for the product.

• Collaborates with freight companies to plan deliveries and shipments.

• Oversees the entire supply chain operations.

The duties of a transportation manager:

• Manages all the transportation or hauling needs of a business.

• Oversees budgets, scheduling, and route planning.

• Possesses an in-depth knowledge of transportation laws and regulations.

• Manages transportation-related budgets.

• Track key performance indicators (KPIs).

In transportation operations management, the roles of the logistics manager and transportation operations manager work closely together to ensure optimal operational efficiency. The logistics manager needs to manage inventory and warehouse operations efficiently while the transportation manager needs to ensure that goods are delivered according to the logistics plan.

Challenges in Transportation Operations

As transportation costs are trending upward, a new future is emerging for transportation operations with a new set of challenges such as:

• Driver shortage: Freight driving is a grueling profession. Many drivers resigned or aged out of the profession leaving the industry in dire need of a new labor force. According to Forbes, “The American Trucking Associations reported that this sector is headed for a shortage of 160,000 drivers by 2030, and the need for one million new drivers over the next 10 years.” Combined with a high turnover rate in the industry, driver shortages are a real problem.

• Rising costs: The transportation industry is experiencing record-high operating costs even as fuel prices decrease. According to the American Transportation Research Institute (ATRI), annual “Operational Costs of Trucking Report” “The total cost per mile for trucking operations reached an unprecedented $2.270 in 2023, marking a 0.8% increase from the previous year.” Such high cost per mile makes keeping costs low a challenge in the industry.

• Regulatory compliance: Transportation managers must navigate complex laws, regulations, and standards that can change frequently and vary by location. Safety and security are both pressing concerns, especially data breaches and cyberattacks which need robust cybersecurity measures.

• Infrastructure constraints: The construction, maintenance, and operation of transportation infrastructures are subject to many constraints. There are physical constraints such as climate constraints and weather disruptions. SeaPort Manatee in Tampa Bay, FL had significant damage after Hurricane Milton disrupted transportation operations in Southwest Florida.

• Service quality issues: In the complex realm of logistics, service quality issues can lead to operation disruptions, increased costs, and customer dissatisfaction. Delayed shipments can disrupt customer’s schedules and damage the company’s reputation. Reasons for delays can include transportation issues, customs clearance problems, and inefficient routing. You can put contingency measures in place to prevent delays from happening.

How Can A Transportation Management System Help?

When it comes to carrier management and how to reduce freight costs, levering a TMS has the smart functionality you need to optimize your logistics operations - all in one platform.

Planimatik’s advanced solutions can simplify the process for you when dealing with data overload, cost management, visibility issues, and coordination complexity.

Planimatik’s Stats Analytics feature gives you easy access to freight operation data including a comprehensive snapshot of logistics performance. You can track average costs, filter data by dates, monitor pick-ups and deliveries, and gain insights. By leveraging information provided by Stats, you can identify top-performing partners, strengthen relationships with your providers, and negotiate better rates. Stats empowers you to make data-driven decisions to take your logistics operation to the next level.

Planimatik’s LTL Quoting tool allows you to receive quotes that precisely match your requirements, ensuring cost-effectiveness and transparency in the logistic process. You can input specific details and negotiate better rates. This feature empowers you to make informed decisions, optimize costs, and enhance overall efficiency in managing LTL shipments through the Planimatik platform.

Best Practices for Transportation Operations

Leveraging Planimatik’s solutions, you can put in place best practices for transportation operations management in your business.

Utilizing the right technology tools, logistic managers can enhance cost efficiency while maintaining service quality. Optimized routing and scheduling facilitated by Planimatik resulted in a remarkable 20% logistics cost reduction and a 30% decrease in average delivery time for ITS Logistics.

Creating cost-effective plans is critical to your supply chain. By determining which processes add value to your supply chain and which do not, you can focus on the strategies that matter.

For example, you can optimize processes by reducing coordination complexity and streamlining the management of many suppliers, carriers, and warehouses. Lack of real-time visibility into the supply chain makes it hard to track shipments and inventory levels. Planimatik’s Calendar View feature provides visibility for all your orders, reducing user errors and saving time on troubleshooting.

Another important practice is to invest in employee training and development to ensure you have the right employees to perform the job. As logistic managers interface with new technology, there is a learning curve to adapting to new solutions and integrating them into workflows. Planimatik’s implementation process is designed to take less than 2 hours simplifying the onboarding phase for new users and making the platform exceptionally easy to use.

Future Trends in Transportation Operations

Transportation operations are evolving with advancements in technology and consumer trends which influence cost management strategies.

The rise of Artificial Intelligence (AI) is revolutionizing the logistics industry by automating the decision-making processes and reducing human error.

AI-driven predictive analytics enable logistic companies to forecast demand accurately. Businesses can optimize inventory levels and reduce costs by analyzing historical data, weather patterns, and market trends. AI algorithms can optimize routes with smart routing which conserve time and fuel ensuring your product is delivered on time.

Electric vehicles are poised to transform freight transportation by reducing costs, improving safety, and being environmentally friendly.

As part of future initiatives, logistics companies are striving to adopt more sustainability practices which leads to a large reduction in carbon emissions and pollution contributing to the global fight against climate change.

Planimatik’s Innovative Solutions for Transportation Operations

Cost-efficient transportation operations need the right processes, the right people, and the right technology to improve efficiency and competitiveness.

Logistic managers are met with a lot of challenges amidst the changing landscape of the logistics and transportation industry.

From rising fuel prices and driver shortages to the advancement of AI technology, the logistics industry is becoming increasingly complex. Planimatik’s planning-first freight management software is an innovative solution that you can use to drive operational efficiency, cut costs, and enhance service levels.

Ready to experience the benefits of Planimatik for transportation operations? Get a free demo of Planimatik’s software today.