Time for the Low-Tech Transporation Industry to Convert to High Tech

By Michael Rofman and Brett Johnson with Ramco Logistics

March 30, 2021

As organizations look to modernize, transportation management is often one aspect of a business that is overlooked. However, making transportation systems more digital can promote some of the largest cost savings and have a major impact on business operations. Modernizing transportation can help meet customer demands, whether existing clients or a new market, and lead to lower prices through a reduction in internal costs (e.g., route optimization). The time is right to make a change if your organization has an on-premise solution that will benefit by transitioning to the cloud.

Modern Transportation Management Systems (TMS) and logistics solutions deliver not only internal efficiencies and gains but also improvements in customer service.

In contrast, older transportation management solutions often lack the functionality required for organizations to operate at a high efficiency level due to limited access to real-time data and incompatibility with newer technology and hardware. Customers are increasingly seeking access to real-time data, so that they can see where their orders are and receive an immediate notification of any delays in shipments.

The pandemic has exposed organizations’ weaknesses around how they track and report information to their customers.

Selecting the right technology platform is a lot like how a shipper searches for a 3PL to partner with. You not only need to consider price, customer service, existing relationships, willingness to grow together and scalability—you also need to take stock of your organization’s values and goals. Even if you choose the most reputable partner in the business, that partnership won’t be a success if both parties values and goals aren’t aligned.

Choosing a logistics technology is often one of the most impactful decisions a company will make in regards to its mid- and long-term goals. By taking a smart, measured approach, it is possible to avoid many of the pitfalls that go along with the selection process, like selecting a platform that will not scale with your business or one that creates a disjointed technological ecosystem that is prone to silos and dysfunction.

Start by examining your current tech-stack

The first step is to review your current systems and identify the gaps that a new logistics solution must fill and the existing functionality that must be retained. For example, your existing software solutions may not have the analytical capabilities to deliver value from their data streams. Integrated data visibility and connectivity are increasingly important features across the entire logistics chain, regardless of what other functionality may be looking for.

It is also important to discuss your plans with key stakeholders across your logistics processes and get their input.

Match company goals

Where do you want your business to be in a year? Three years? Ten years? The answer will help guide you as you evaluate solutions. For instance, if the ability to connect with clients is a high priority, you should make sure that your software provides that. By the same token, if you are looking to create a more holistic approach to transport management—in which route and dynamic planning, inventory management, and other core businesses processes are managed jointly—you should be certain that your chosen solution has the functionality to connect these processes.

Aim to eliminate silos and running processes outside the system

Once you have determined what your software needs are, it is time to evaluate potential solutions.

Prepare a short list a list of vendors who are aligned to your business model and goals once you are clear on your specific needs. If you lack the in-house capability to make such an assessment, bring in consultants to assist you in the process.

Any potential platform should support the reduction of silos and the running of IT processes outside of your system. You also need to consider how to connect with your clients’ systems and, in relatively digitalized contexts, integrate streams of data from the internet of things (IoT), including devices and GPS on your trucks, containers and pallets.

Any technology that provides real time visibility across your system should be favored. Ease of connectivity is also a major consideration – APIs should be the preferred option.

Choosing a logistics technology partner is like a marriage. It is critical to find a partner who is ready to walk the journey through thick and thin. They should have the flexibility to align their product road map to your evolving business needs and goals. The ease of interaction at all levels of the logistics technology partner’s organization is also a key consideration.

Logistics and transportation management are undergoing rapid changes, and the rate of change is increasing. As your organization does its best to lead the market, it is crucial to select technology providers who will put you in the best position to do so.

This article was produced in collaboration with Ramco Logistics.


Disclaimer of Liability

The information provided here is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.

Mazars USA LLP is an independent member firm of Mazars Group.

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