Inbound freight management is the process of monitoring and managing the inbound shipment that comes from the vendors or the suppliers. The cost of transportation will be almost 50% of the average company’s logistics expenses. The shipper will have more control of this expense on choosing the inbound freight management and supply chain priority. When the shipper has the inbound vendor management, attention will be more on the shipment integrity, tracking of the information and customer satisfaction. So, choosing such managing the inbound freight will help the shipment to give the shippers an opportunity to enhance the reliability, reduce the cost and gain visibility.
Why business needs the inbound freight management
- Inbound freight is hidden expenses of purchasing the goods. This is because the company will buy their goods with pre-pay and add freight terms, which is less comparatively.
- The vendors do not need the companies to manage all their inbound freight as it is the profit center, and it does not change their operations. They also do not control all the freight available on their docks.
- In any company, the inbound process will be managed by the purchasing department concerning the vendor relationships and possible silo corporate structure.
- It is sometimes difficult to start the inbound program. It may be due to a lack of visibility and the process to break out the inbound freight cost from the landing purchase price that is required for purchasing the negotiations to split the cost of the product and freight out of the product’s cost. All these lead to a shortcoming of communication between the terms of procurement and logistics.
- It is hard to manage the entire requirement without proper assistance without the technology or any other support.
For all these reasons, most companies are now looking for the best inbound freight management services.
The benefits of having good inbound freight management
Outsourcing the best inbound freight management to the logistic solution will help in several ways for the company. Along with enhanced administrative support, production and profitability, there are also several benefits and here are few.
1. Better resource management
When the company has enough idea over the freight, it can easily plan for the workforce required for the receipt. Also, they can manufacture or produce order cycles as they turn the goods based on their facilities. If you keep on hearing the response as wait, wait, wait, you may need to spend more for the unneeded labour or misallocation of labour.
2. Vendor relationship and management
Initially, the vendor’s pool may have some reservations to change from the situation where they control the flow, but when it is carried out well, they can be a part of the process and able to access the communication protocols. They can also access the communication protocols and reporting tools that will enhance the overall performance. When you have the right Vendor Management Inventory, you can take it to the next level, and it paves way for an increased relationship to the other level.
3. Improved supply chain KPI’s
Having improved KPI is the new buzz word these days, but when it comes to the management of the inbound freight, it means something else. Improved KPI is a new technology that is highly used in inbound programs. The companies will pick the visibilities, analyzing and reporting to improve the optimization opportunities. This helps with cost reduction, ability to continue to measure and improve the process, on-time pick up and deliveries.
4. End to end control promotes vendor compliances
Although the vendors are supposed to follow and stay in compliance with the rules of the inbound logic company, some may not follow it appropriately. Proper update over the documents, lack of control over vendors and shipping selection may continue. So, only the effective TMS that includes the vendor module can assist in getting rid of the risk, returning the control over the entire process and giving the buyers the ability to reap the cost-saving process.
Difficulties in implementing inbound freight management
- Vendors and reluctant: When something is the outbound for your company, it is inbound for your company. So, imagine all that challenge and limitations you will have when one of your customers asks to manage their inbound.
- Inbound is soloed into the other part of the organization: There can be a lack in the relationship between the seller and the buyer as they view the supplier relationship invaluable and feel that they will be damaged with the process.
- Inbound freight hides the landing price of any goods: Viewing the cost, and the process of breaking the supplier cost from the freight cost can be difficult. The supplier will have some profit in the freight charge, and so they will not give it up easily.
- The company may lack the technology to make a leap: Inbound freight management is something more than the cost, and this makes many to forget about the other benefits.
How do logistics service providers help overcome the difficulties and optimize the inbound freight successfully?
The logistics management company will professionally lead with supply chain management. For instance, automation, perfect coordination, etc. will be highly effective when it comes to logistics services. Here are certain aspects that every logistic service follows for effectively managing inbound freight management.
- Building a strategic relationship with the supplier: Determining the optimal route and working with the suppliers to implement the benefits of both the parties. They know the modes and carriers to use in the lanes, service requirements and rate requirements. All these will pave the way for successful freight management. Further, they follow the right routing guides for physical or digital experts.
- Using TMS for dynamic rates: Businesses will accept the freight cost as their vendor quote due to lack of visibility or the market rates. Transportation Management System will allow the company to access or change the market conditions. This helps in managing the routes and setting real-time vendor allowances.
- Consolidating the inbound freight deliveries: When less than truckload (LTL) shipments are inefficient, it will lead to unnecessary costs both in terms of shipping and unloading. So, consolidating the LTL shipments, the company can save more money.
Approach VSL Logistics to have the best service!
VSL logistics is one of the leading logistics services serving people for years in the UK. When you are approaching us for all our inbound freight management, we can analyze the needs over the freight management and offer the services. As a professional logistic service, we welcome you with pleasure, and we are ready to offer you the required service.
