Defining Transport Management
Transport management is the process of planning, organizing, and coordinating of the movement of goods or people from one place to another. Transport Management involves the management of different modes of transportation, like trucks, trains, ships, and airplanes. And it includes the associated infrastructure management such as roads, highways, and ports.
For the movement of goods and services efficiently, effective transport management is critical for businesses and organizations.
Transport management includes functions such as route planning, scheduling, tracking, and monitoring the movement of goods and people. It further involves coordinating with suppliers, customers, and other stakeholders to ensure that transportation needs are met in a timely and cost-effective manner.
For an effective transport management system, tools and technologies are used by companies including logistics software, GPS tracking systems, and advanced analytics. These tools can help organizations to optimize their transportation operations and make more informed decisions about their transportation needs.
Why transport management is important
Transport management is critical for businesses and organizations that rely on the efficient movement of goods and people. It helps to optimize transportation operations, reduce costs, and improve efficiency and customer satisfaction.
Transport management is important for several reasons:
An effective transport management system helps in optimizing the movement of goods and people, reducing costs, and improving efficiency.
A well-planned transportation system improves customer satisfaction by ensuring that goods are delivered on time and in good condition. Managing lead time, and assuring goods are at market shelf timely contributes to customer satisfaction.
Optimized route planning and scheduling can eliminate the few distribution vehicles using the same route. And practicing concepts like a milk run to fully utilize the vehicle movement for product collection and distribution.
Transportation contributes largely to greenhouse gas emissions, noise pollution, and sound pollution. When it comes to air transportation emission is more compared to sea transportation. Rail contributes less emission than road emission. Hence it is important to plan transport movements to minimize these impacts by reducing unnecessary travel and optimizing routes and modes of transportation.
A well-organized transport management system helps to ensure the safety of goods and people during transportation, reducing the risk of accidents and other incidents.
How to establish a good transport management system
Establishing a well-planned transport management system is important to benefit from route optimization.
DHL is the best example to talk about when it comes to route optimization. DHL use their road fleet, drones, and airplanes to provide fast service to their customers while managing cargo movements through a well-managed transport system.
Here are some steps to follow in order to establish a good transport management system:
Define your transportation needs:
Determine what you need to transport and how often you need to transport it. This will help you to determine the type and size of vehicles you need, as well as the efficient routes and schedules.
Develop a transport plan:
Create a detailed plan that outlines the transportation needs of your business. Including the types of goods you need to transport, the routes and schedules you will use, and any special requirements or constraints.
Select the right transportation mode:
Choose the most appropriate mode of transportation for your needs, considering factors such as cost, speed, and the type and size of goods you need to transport.
Choose a transport provider:
Some companies have their own transport fleet while others have to look for a reliable 3PL provider.
If you are looking for a 3PL provider, research and select a transport provider that can meet your needs in terms of cost, reliability, and capacity.
If the products are going to cross borders, a reliable freight forwarder or a NVOCC is a must to make sure the products reach their destination safely.
Implement tracking and monitoring systems:
Use tracking and monitoring systems, such as GPS tracking and logistics software, to monitor and optimize your transportation operations.
If you are to use a 3 PL provider, most of the transport providers provide real-time tracking information of the cargo through RFID systems.
Communicate with stakeholders:
Communicate regularly with your transport provider, customers, and other stakeholders to ensure that your transportation needs are being met and to address any issues that may arise.
The above would be helpful in having a well-planned transport system
How transport management supports an efficient supply chain
Transport management plays a critical role in supporting an efficient supply chain. It helps to ensure that goods are moved efficiently and cost-effectively from the point of production to the point of consumption. How the quality of the products a company produces become worthless if the products are unable to reach the market on time. Hence, the transport system of the company is important to look after.
Here are some ways in which transport management supports an efficient supply chain:
Optimizing routes and schedules: Transport management involves planning and organizing the most efficient routes and schedules for transporting goods. This can help to reduce costs and minimize the time that goods spend in transit.
Managing inventory levels: Transport management can help to optimize inventory levels by ensuring that the right goods are delivered to the right place at the right time. This can help to reduce the risk of stockouts and excess inventory. More the time is needed to transport goods more the inventory should be kept. And if the transport system is not reliable, it is obvious that more buffer stocks should be kept as contingencies.
Coordinating with suppliers and customers: Transport management involves coordinating with suppliers and customers to ensure that transportation needs are met in a timely and cost-effective manner. This can help to improve communication and collaboration within the supply chain.
Tracking and monitoring goods in transit: Transport management systems often include tracking and monitoring tools, such as GPS tracking, that allow businesses to monitor the movement of goods in real time. This can help to improve visibility and control over the supply chain. And Customers too have the ability to track their shipments and plan their business activities.
Disadvantages of not having a good transport management system
Not having a well-managed transport system is a burden to a company. There are several disadvantages of not having a good transport management system:
Without proper planning and organization, transportation operations can be inefficient, resulting in higher costs and longer delivery times.
Poor customer service
Inefficient transportation can lead to delays in the delivery of goods, resulting in dissatisfied customers. Dissatisfied customers are always a loss to the company.
Increased risk of accidents and incidents
Without proper monitoring and control, the risk of accidents and incidents during transportation can increase. Reaching damaged products to the market is a black mark for the company and at the same time not reaching the products to the market due to accidents too destroys the brand reputation.
Further, the insurance premium for the cargo too increases when regular accidents and incidents happen due to the unreliability of the transport system.
Lack of visibility and control
Without a good transport management system, it can be difficult for businesses to track the movement of goods and monitor their transportation operations. Hence, it creates issues in responding to the customers on product location which makes customers dissatisfied.
Increased environmental impact
Poorly managed transportation can result in unnecessary travel and higher greenhouse gas emissions. Lack of planning can cause a few pickup trucks to use the same route for production/ material collection.
Overall, a good transport management system is critical for the efficient and cost-effective movement of goods and people. Failing to have a good transport management system can result in higher costs, lower efficiency, and reduced customer satisfaction.