What Is Freight Management & How Does It Work?

Sep 5, 2023 | Blog, Pinnacle Services

What is freight management?

Freight management is the process of organizing and managing the whole transportation cycle of goods, from the point of origin to its final destination.

It encompasses coordinating everyone and everything involved in inbound and outbound transport.

Freight management logistics aims to streamline vendors, distributors, carriers, and shippers, optimizing the operation of packaging, warehousing, and delivering freight safely and efficiently.

To do so, cargo management services rely on logistics and supply chain knowledge. In addition, the use of connected technologies helps monitor the shipping process and resolve any issues in a timely manner.

Why is freight management important for your business?

Whether you run a big firm or an SMB, freight management logistics are essential for the smooth operation of shipping goods. 

This applies to manufacturers and vendors as much as to small-scale transport businesses, such as independent truck drivers and small fleet owners.

For efficient cargo management, you need to take care of every single detail and coordinate them all at the same time. You also need to find the right warehousing and the right carriers at the right price.

In this way, you will ensure prompt and cost-effective transport that keeps you covered in cases of short carrier supply or unpredictable changes and charges.

Investing time and resources in freight management can help you improve operational efficiency, increase customer satisfaction, and reduce costs.

Depending on your needs, you can organize cargo management services internally, or you can consider outsourcing. In any case, it’s worth learning more about the operations involved.

How does freight management work?

To achieve flawless freight management, there are five basic stages that need to be executed to perfection.

1. Selecting a Carrier

There are various carrier options to fulfill your carrier needs.

Owning a carrier

For some businesses, having their own trucking fleet proves to be the most efficient carrier solution. 

This is mostly relevant for larger firms with high production volumes. In fact, even though private fleets cannot always offer an all-rounded solution, they can cover more than 50% of a company’s outbound freight shipments

Using third-party carriers

Using 3PLs is a popular solution for effective freight distribution management, with 81% of businesses outsourcing their domestic transportation.

Freight brokers or freight forwarders can assist you in finding the ideal carriers that match your goals and capabilities.

Many companies also choose to work directly with a preferred carrier network. These are companies that stand out for their efficiency and ease of collaboration. 

Preferred shippers can support you in resolving unforeseen challenges, and they regulate processes so that you save on possible accessorials or other charges.

2. Optimizing the Route

Freight optimization 

Freight Optimization is about finding the optimal way to transport your goods. Lead times, transit expectations, ability to mode shift, types of products being shipped, all factor into the best solution for a client partner’s needs. Our dedicated continuous improvement teams are here to assist in decision making and optimizing all freight. Route and schedule optimization tools suggest the most efficient route that offers timely and prompt delivery with a cost effective solution.

Load planning 

To achieve an optimal truckload you should also calculate the size, weight, and class of your freight among other factors. The goal of load planning is to transport the maximum amount of cargo with the least number of vehicles or trailers.

Multimodal and intermodal optimization

To optimize your freight shipping, using different modes of transportation (multimodal shipping) or even different carrier companies can often offer the most cost-efficient and sustainable cargo management solution.


3. Managing Documentation and Regulations

Logistics and transport services demand a significant amount of paperwork. 

Routing Guides

Routing guides are documents drafted by shippers that set the rules and requirements for the entire process of shipment management. 

On top of various terms, they specify carriers’ responsibilities concerning modes of transport, rates, and service specifications.

Routing guides also include contract freight rates, which are fixed costs based on prior agreements. In this way, you can avoid spot market charges – a single-time charge for transporting a particular load.

Claims Management

Cargo Claims and the Carmack Amendment, carriers must acknowledge the carrier damage claim within 30 days and formally respond to it within 120 days.  Claims require paperwork collection of commercial invoices, PODs and supporting pictures. Claims no matter the industry tend to be a headache, the Pinnacle team simplifies the process.

Tariffs and regulations management

Cargo transport, especially international transport, requires a long list of accompanying documents, namely waybills, bills of lading, packing lists, certificates of origin, notices for dangerous goods, and more.

Accounting

Freight accounting includes all necessary quotes and invoices, like receiving, auditing, and paying freight invoices that need to be exchanged between all parties involved: from the warehouse manager to the client.

4. Tracking Shipments

Track and trace is an integral part of cargo management and logistics. Also known as supply chain visibility, it ensures that everyone can track freight and, at the same time, gather valuable data.

Truck and vehicle tracking uses GPS and other logging technology to determine the location and monitor the live route of the carrier vehicle while sharing information on fuel consumption, driving style, trailer temperature, open doors, and more.

Package tracking offers all information regarding the contents and location of each individual unit, whether a parcel, pallet, or container. Barcodes or RFID chips enable the automatic exchange of information to carriers, shippers, and clients.

5. Collecting and Analyzing Data

With the use of present technology and all the connectivity capabilities offered, companies who are involved in freight management can collect, analyze, and use a wide array of data to their advantage.

Such data can help track current practices and, as a result, optimize services or avoid future drawbacks. Data analysis can also offer better customer service, by recording and resolving problems and complaints before re-occurring.

With the use of prescriptive analysis, you can assess current freight network usage, and identify areas of improvement. In addition, demand forecasts may assist you in better transport planning, and in finding the ideal carrier combinations for your needs.

6. Choosing a freight management partner

When choosing a freight management company, smooth and flawless collaboration is the key. 

Other important factors to consider include whether you can rely on your freight partners to meet tight deadlines, and if they offer reliable and secure services on a 24/7 basis. At Pinnacle Freight, we value our clients and provide top-rated freight services nationwide. Contact us today to discuss your own carrier needs.

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Pinnacle Freight Systems, Inc.
Pinnacle Trucking, LLC
500 Cedar Lane, Florence, NJ 08518

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