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Freight Software
Freight Software
Freight Software is a broad term. Large shippers and carriers
began developing freight software in the 1960's when mainframe
computers became more widely available and affordable. Large LTL
carriers such as Roadway Express and Red Ball were pioneers in
the field. It is a little known fact that the freight industry
created E.D.I. (electronic data interchange) during this time
frame. Early freight software was custom built and run on
company mainframes at the large carriers and shippers. As with
so many other fields, freight software for small or medium sized
companies did not begin to materialize until after the
introduction of the I.B.M. personal computer in 1980. Freight
software can be as simple as software used to calculate
point-to-point mileage or complex enough to manage virtually all
shipping functions of a carrier, broker or shipper.
Modern freight software has standardized into basic functional
groups based on the needs of shippers and carriers/brokers. Much
of the available freight software is sold with these functions
as modules that can be purchased separately. Which modules are
purchased is usually driven by the size of the company looking
for the freight software.
Freight software as applied to shippers can be part of the much
larger field of supply chain management or more narrowly focused
on supply chain execution. Supply chain management can be
defined as the application of information technology to economic
order quantity theory. It encompasses virtually every function
within a company that deals in tangible products and is usually
best preceded by ERP. Enterprise Resource Planning is the
company getting its data house in order. It can then think in a
more focused way about supply chain management and execution.
Freight software as it applies to shippers is most often
associated with supply chain execution. The main functional
groups here are the preparation of goods for shipment and the
effective management of transportation vendors. The preparation
of goods for shipment is a function of warehouse management
software. The warehouse must stock the products that will later
be shipped, pick the products that have been ordered and package
or unitize those products for shipment.
Management of transportation vendors is an important function of
supply chain execution software. Shippers usually need a number
of vendors to cover their territory or find it beneficial to
have vendors competing for business. Vendor management software
uses objective measures to point out the best vendor for any
given shipment based on price and service accomplishment. The
best supply chain execution software allows for effective
communication with vendors throughout the shipping process.
Freight software as it applies to trucking or broker companies
has standardized into three basic functional groups; dispatch
operations, equipment management and accounting. Much of the
available trucking software is sold with these functions as
modules that can be purchased separately. Which modules are
purchased is usually driven by the size of the carrier or broker
looking for the trucking software. Very small carriers and
brokers can manage dispatch and or equipment on paper.
Accounting functions at this level are well served by software
packages such as QuickBooks or Peachtree. Carriers that grow
beyond 10 so trucks and brokers with 20+ loads per month or can
usually begin to see the value of having
one or more of the
freight software modules.
Freight software designed for the accounting functions is the
least likely of three to be offered as a stand-alone product
since it depends upon the others for data. Payroll functions can
be derived from dispatch operations data such as which driver
went where. Invoicing and receivables are also derived from
dispatch operations data as in which customer sent what where.
Equipment expenses are derived from equipment management
functions. Freight software designed to integrate with the over
the counter accounting packages such as QuickBooks can ease the
transition for many small carriers and brokers.
Equipment management functions of freight software revolve
around fuel and maintenance costs. Fuel, tires, periodic
maintenance, and repairs are all important costs to be managed
by every trucking company. This type of software can get very
complex but is essential to larger carriers and can be a good
value to smaller companies. The availability of fuel cost data
on the internet has given carriers a new tool to manage those
costs as in where and when and how much fuel to buy. Freight
brokers do not have these concerns.
Freight software designed for dispatch operations is the most
likely of the functional groups to be offered as a stand-alone
product. It is also arguably the most important of the three
functional groups. It is the most important because it can have
the greatest impact on customer service. Freight brokers in
particular should recognize that this software can give them a
competitive advantage. Equipment management and accounting
functions are internal; dispatch operations touch every customer
the carrier or broker has in one way or another. Dispatch
operations is all about keeping the right drivers with the right
equipment in place to services the customers' needs and take
advantage of opportunities that arise. Managing those resources
is important but the best dispatch software also gives
dispatchers and managers tools to monitor work in progress and
communicate effectively with customers.
The internet has given rise to two interesting new developments
in the field of freight software; software as a service and
networking as a new functional group. Software as a service is
delivered via the internet by subscription and has the following
advantages:
No large upfront investment as in traditional buying of
software. No new hardware costs. Your existing network, internet
connection and browser such as Microsoft Internet Explorer are
all that are needed. Pay as you go. This type of software is
often available month to month without a contract. Maintenance
and upgrades handled at the web server with little or no bother
to the user.
Networking as a functional group is a new development made
possible by the internet. Dispatch software can now be extended
onto the customers' desktops. Carriers, brokers and shippers can
collaborate to give and get the data that they need to get the
job done. Customer service is greatly enhanced with true real
time communications and the customer as a larger part of the
process. TDNweb.com is an example of this new breed of freight
software.
About the author:
Van Wooten is the vision behind Transport Data Networks (TDN) an
innovative online application that is revolutionizing the
Freight Software industry.
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