Transportation Management

What is your definition of TRANSPORTATION MANAGEMENT?
What is transportation management in supply chain management?

A transportation management system (TMS) is a logistics platform that uses technology to help
businesses plan, execute, and optimize the physical movement of goods, both incoming and
outgoing, and making sure the shipment is compliant, proper documentation is available.
What is the meaning of transport management?

The term "transportation management" refers to the management, control, and optimization of
all transportation processes along the supply chain.
Example: Small MTL company selling computer devices – track all info – PO – vendor (China) –
import to Montreal – outsource cargo (taxes and other fees) – Canadian customs – release
materials - move to warehouse.
SAP is optimizing this entire process. Can specialize the system as per the company needs.
What’s new upgrade, what’s the new update that can be done in the system. Companies should
capacitate the employees. Technology is moving towards cloud-based platform (fast-pace).
Why do companies invest in TM?

Meet the consumers’ demands. Satisfy clients. Optimize workflow, save money.
Elements to be deployed on transportation:

1. SAP general knowledge
2. Procurement
3. Inventory Management
4. Sales Order Processing
5. Outbound Delivery
6. Transportation Management
Backstep, why are doing this? What is the purpose of a PO, Shipping through air/see/land/rail?
Understand the context behind the transaction in the system.
PST – provincial sales tax 9.97%
GST - goods and services tax 5%
Procurement
 Main Elements
o Purchasing order management
o Agreement creation
o PO Creation
o Vendor selection
o Acknowledgement receipt
Payment terms
Billing process
Overview of TM
 Master data set-up

- Creating the RIGHT item. If not implemented properly, it could cause problems.
- Item cnfiguration
 Order Management
- Vendor selection from vendor portfolio.
- Databases
- POs
 Planning
- Scheduling agreement
- Analytics
- Contarcts
- Mode of transport
- Pricing
 Execution
- Production begins/on-going.
- Freight order, charge calculations, customs, track and trace
- Carrier integration
 Settlement
- Checking the quality and the quantity. Quality assurance.
- Claims.
 Finance Module
- Payment
EXERCISE
What is the main purpose of a freight carrier?

- A freight carrier is an individual or a commercial company, that is legally authorized
and specializes in directly handling the transporting and/or shipping of cargo from
one place to another.
- Domestic and international shipping.
Ex. United States Postal Service (USPS), United Parcel Service (UPS), FedEx,
Maersk, DHL, Cosco, Canadian National, Purolator
- A Common Carrier is a person or company that transports goods on regular routes at

set rates. A Freight Forwarder is a person or company that organizes shipments for
individuals or corporations to get goods from origin to destination; forwarders
typically contract with a carrier to move the goods.
- They assume responsibility for the load from the origin to the final destination and
normally takes responsibility and possession of the cargo at some point during
transportation.
- Proper documentation. Receiving and submitting shipping and export documents

such as Bill of Lading (B/L, BOL)
- It carries a company's products or goods via air, sea, or land, all the way to their
intended destination. There are both international freight carriers and domestic
carriers.
- The four main types of carriers for shipping in logistics are trucking, railroads,
ocean and air cargo. Trucking is the most common type of carrier, as it's often
cheaper than other methods and can reach more destinations quickly.
- Freight transportation increases the value of goods by moving them to locations

where they worth more and encourages competition and production by extending the
spatial boundaries of commodity and labor markets. Freight transportation also
stimulates demand for goods and services and employs millions of people.
- These companies will physically move your goods, but they don’t manage your
shipment or handle anything else. They are not freight forwarders or 3PL providers,
but they work with both as an integral part of the shipping process.
Freight Forwarding Companies
A freight forwarding company will connect you with the right freight carrier to ensure
your shipment gets moved from Point A to Point B properly. They will arrange the
shipping, even if it includes more than one type of freight carrier.
For example, if you’re shipping goods from Jacksonville, FL to Edinburg, Scotland,

you may need a freight forwarder to arrange the airlift, marine shipment, and rail
transportation to get the goods from Jacksonville to Edinburgh.
You may need multiple options because the goods may have to arrive in England
before making it to Edinburgh, Scotland. It’s a tricky process, but a freight forwarding
company will arrange the right transportation options for your shipping needs.
While a freight forwarding company will make all the necessary arrangements, they
won’t actually move your goods. They connect the shipper to the freight carrier, and
the freight carrier will actually move your goods from Point A to Point B.
3PL Providers
While freight forwarding companies and 3PL Provides are a bit similar, they are not
the same. 3PL or Third-Party Providers offer more services than a freight forwarder.
They are the full-service shipping option.
A freight forwarding company will act as the middle man between the carrier and the
shipper, while a 3PL provider will act as the packer, biller, carrier, and keeper of
warehouse goods. They are more of an all-in-one solution.
When you hire a freight forwarding company, you still have to handle the logistics
and other parts of your supply chain. Your freight forwarder will simply match you
with the right freight carriers and make arrangements for you.
A 3PL provider takes things even further. When you hire a 3PL service, you will be
during over some or all of your logistics and supply chain operations to a third-party
company. They will take care of everything, which leaves you free to grow your
business.
A few of the main tasks a 3PL provider will handle include:
o Cross Docking
o Inventory Management
o Order Management
o Processing
o Reporting
o Retail Scan Packaging
- Freight Distribution
When you choose a 3PL service, you gain access to a solution capable of handling
your entire supply chain. Unless you already have in-house resources to handle the
services of a 3PL provider, it makes sense to outsource a large amount, if not all, of
your logistics and supply chain operations.
Which type of services does a freight carrier can provide?
- Air freight
- Sea freight
- Road transport (trucking, railway)
Which requirements should be considered to select a freight carrier?
- Cost/Pricing
- Consider the industry experience of the freight carrier and its reach. One has to
choose to do business with should have a global reach especially for multinational
companies. One should also consider whether the carrier is located close to your
customers and/or suppliers.
- Array of services provided. A good freight carrier is able to give more than one mode
of service as well as logistics solutions. They should be flexible in their ability to meet
your needs as a customer/client.
- Good communication and customer service. Able to provide or offer details regarding
your shipment such as (online) tracking, timely notifications as well as staff that are
able to take your calls when you have questions or concerns.
- The Carrier should also have the proper licenses, certifications and permits to
operate. As well as the appropriate documentation needed for services such as
handling sensitive and/or dangerous products. Their employees should also have the
proper training and licenses.
- Able to provide services in unstable conditions through ensuring risk management.
The carrie++++r should be able to mitigate risks and have knowledge in handling
issues that may occur. Cargo insurance should be offered too so the client is
protected from costly mistakes.
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What is your definition of TRANSPORTATION MANAGEMENT?

What is transportation management in supply chain management?

What is the meaning of transport management?

Why do companies invest in TM?

Elements to be deployed on transportation:

 Master data set-up

What is the main purpose of a freight carrier?

- A Common Carrier is a person or company that transports goods on regular routes at

- Proper documentation. Receiving and submitting shipping and export documents

- Freight transportation increases the value of goods by moving them to locations

Freight Forwarding Companies

For example, if you’re shipping goods from Jacksonville, FL to Edinburg, Scotland,

A few of the main tasks a 3PL provider will handle include:

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