Cost per mile is the standard measure of trucking efficiency. Top operating expenses, from driver wages to fuel, maintenance and insurance, are all functions of distance.

The heavy focus on variable, over-the-road costs may cause business leaders to miss or sidestep opportunities to improve efficiencies in the back office. Below are three of the most obvious signs it could be the right time to upgrade your transportation management software (TMS) to “right size” your business.

1. You are growing. If you are adding trucks and drivers but your office is not getting more efficient, your current TMS system may not be capable of operating at scale. Shortcomings in functions like load planning, payroll or billing may be creating fault lines while you’re trying to grow and lighten the workload to be more efficient.

2. Integration is lacking. Adding new technology solutions may create situations where people in the office are using different vendor portals to manage information. They could be more efficient by staying in a native TMS environment. If your TMS provider does not support integrations with all your third-party applications, it is costing you significant time and money.

3. Wasting IT resources. Every company needs technology experts, not dedicated IT staff to support and maintain TMS systems. The Software-as-a-Service model for TMS will allow IT personnel to focus resources on high-impact activities rather than maintaining servers, updating software, managing data security, storage and other system admin functions.

Analyzing Transaction Costs

If your transportation management software (TMS) is outdated, you may feel compelled to increase headcount whenever you add more trucks and drivers. One of many benefits of a modern, next-generation TMS is the ability to scale growth and improve efficiency by automating steps in the order-to-cash lifecycle of loads.

The ideal headcount for back-office functions will be different for each company. Management philosophies will influence staffing decisions. Some leaders want a higher ratio of drivers to dispatchers based on what they want dispatchers to do, such as focus solely on driver management and communication.

Comparatively, some companies want dispatchers to do load planning and handle other responsibilities, along with driver management functions. The driver-dispatcher ratio will naturally be lower.

No matter the organizational structure, companies should know exactly what it costs them to complete freight transactions from start to finish. Only then can they properly evaluate the cost-saving opportunities from using a modern TMS system that can automate functions, from order entry to billing.

How long does it take each person, at every stage of the process, to keep your freight transactions moving? The time may be influenced by Parkinson’s Law, which states that work expands to fill the time available for its completion. In other words, tasks may be taking longer than they should, especially when people are not using technology to eliminate routine work and to hold people accountable for productivity.

Once you know your cost per transaction, you can evaluate different TMS systems to find one that will significantly increase labor efficiency by conducting side-by-side testing with your current process flows.

A mobile office for drivers

One of the most important tools that a modern TMS system can offer to increase back-office efficiency is an integrated driver mobile application. The right technology will speed the flow of information from drivers to the office as well as give drivers added work conveniences.

Drivers should be receiving all the information they need to do their jobs at any point in the lifecycle of a load. Giving drivers visibility to hours-of-service information, load instructions, and tools to capture proof of delivery receipts will reduce office work and speed freight transactions.

To see how an enterprise SaaS-based TMS can simplify and automate freight transactions and help fleets right-size their back office, contact Magnus Technologies to schedule a quick demo at (877) 381-4632 or sales@magnustech.com