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Why do you use a Contract and Rate Management Solution?
Why do you use a Contract and Rate Management Solution?
freight rates rate management
10/1/15 1:14 PM
Why do you use a Contract and Rate Management Solution?
The answer seems obvious, but have you ever thought outside the box? There are so many companies out there that fail to use the full value of their freight rate data. It is a corporate database to allow their corporate 'publics' and supply chain stakeholders to access current or future rates from their providers. More importantly, they can have a level of comfort that the data accurately reflects the applicable rate for the carrier, service and commodity. Their publics can view the rates select the appropriate carrier, service and price based on the number of carriers that have provided rates for them.

Let's take a deeper look! Depending on their level of sophistication, the available rate management functionality, integration and interfaces there are many more tools and methods available to automate your Transportation Management System TMS, by using the tools to its optimum. Let's take a look at them chronologically:

Rate Management Solutions
Rate Management Solutions now have the ability to support multimode, multi-leg routing, dynamic rate updates, trend analysis, mass updates, rate expiry monitoring and allocation/MQC management.
How does your Rate Management Solution support all of these needs? Have you outgrown it?
What are your provider's plans to add additional modes or more functionality?

Supply Chain Carbon Footprint
The environment impact of transportation is becoming more and more critical, as it should. Transportation providers should know and provide their carbon footprint, which should be part of your decision in carrier selection or routing. Even the Pope is bringing this matter to the forefront!
Does your Rate Management Solution provide transit times and access to the various air and ocean carrier schedules? Why not?

Cargo Booking Functionality
Providing they have appropriate roles and secure access, users can initiate a booking having selected the appropriate carrier service. Selecting the booking can be as simple as initiating an email to your provider or internal stakeholders. More sophisticated configuration or integration allows the booking to be sent via EDI/web services to your back office, Service Provider TMS system or one of the Portals.

Rate Quotation Management
As a freight forwarder, do you think you are too small utilized the quotation management module. You can keep track of margin, profitability, success ratio won/loss. The interface to your back office system can be a simple as exporting quote history or a direct web services link.

Total Landed Costs
At the simplest level, some Rate Management Solutions allow manual entry of commodities, pricing, DIMs and volumes and return the imported cost including freight. More sophisticated users have automated interfaces at several places in their ERP systems. When determining markup & sales price importers retrieve freight directly into the costing process. They can also access actual freight cost billed along to customers during the invoicing process.

No matter what complexity of your trading relationship, our Rate Management Solutions can support your international activities. Reduce the risks, delays, and disruptions caused by misunderstandings, disputes, and litigation.

Trend Analysis and Monitoring
When new freight rates arrive, the solutions advise [visually and by report] of the change in the rates, by location pair, trade Lane or contract. Users can view rate trends by month quarter or year. An excellent tool for planning and budgeting purposes.

Invoice Validation, Approval & Payment
One of the more surprising trends over the last few years has been outsourcing of carrier invoice post audit and validation. Why are you not using your rate management database to audit the invoices AS THE ARRIVE? What's with this post audit? It's too late and costs you more of your money. The rate management data warehouse is a tremendously valuable asset to use for a myriad of purposes [will discuss further]. At a minimum it should be used to process transportation invoices. Solutions can now receive invoices electronically directly from carriers by EDI, many carriers provide monthly invoice summaries in worksheets that can be imported and validated. These more sophisticated rate management tools provide management reporting of invoices received, processed, approved, rejected, questioned and so forth. They check for duplicate or invalid shipments and can be configured to allow for tolerances. Lastly, they can have interfaces directly into ERP for AP systems or at a minimum the ability to export a summary of invoices processed for your accounting groups.

Transportation Procurement

You have your freight rate and rate history. Use the data to go dynamically to market for a formal tender or spot rates. Look at various cost, services and performance scenarios to award your business!

Well you have read all of the things you can do with Rate Management. The companies that have discovered their 'hidden' asset have reaped immediate benefits for their sales, costing, payables and planning needs.

Why are you not doing it? Come on let's go! Compare and Discover what you are missing? Get more Competitive Now. Demo our Rate Management Solution

Gary Chisamore the author, is the VP of Business Sevelopment at Freightgate and a 40 year veteran of the Logistics, Supply Chain and International Trade sectors.
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