Blog post based on the Tailwind Transportation Software Webinar: Risky Business – Avoiding the Five Most Common Freight Business Risks (30 mins; Now Available On-Demand).
Life is risky. For example, I have a friend – let’s call him Tom.
One day he went out for a nice drive, then got into an argument with his girlfriend – and as she storms off, she accidentally moved his car’s shifter. Next thing you know, his beautiful 1979 Porsche is taking a dive off a pier.
You’re likely asking where this is going…
Well, the same can happen in business: when one thing goes wrong, it can set off a course of events that lead to other problems.
Now, we can’t remove all your risks – we have little control over who rides in your Porsche – but there are a few things we can do.
A TMS (such as Tailwind Transportation Software…) can help you manage the five most common risks faced in freight transportation, namely:
- Losing Your Customers
- Being Shut Down by the DOT or Transport Canada
- Missed Payments (from your customers, and to your drivers and/or carriers)
- Standing Still (while the market changes around you)
- Relying on Outdated Technology
Freight Business Risk #1 – Losing Customers
The biggest asset your company has are your customer relationships. When we talk about losing customers, we are not talking about the risk of competition, which is always a given, but rather the risk that you either forget about some customers because you are not tracking them, or someone in your business decides they want to start their own – and takes a bunch of those relationships with them.
The biggest advantage of a TMS system is the ‘data asset’ it provides – the centralized database of your customers, as well as all the details on your interactions and transactions with them – all in one place.
This database needs to be protected and secure, and the people who use it should be vetted. If your database is in the cloud you’re protected from someone just walking out of your office with a rolodex. And by keeping it online, it’s not just in the heads of a few key people in your company.
The value that someone is willing to pay for your business is not only based on your revenues and profits, but the tangible data asset – the customers and resources – at your disposal. If you do not have this under control or managed, then you are in a risky situation because your business is effectively walking out of your office every day – sitting inside the heads of your employees and staff… who hopefully return the next morning.
Risk #2 – Getting Shut Down by the DOT or Transport Canada
The solution to surviving a DOT or Tranport Canada audit is pretty simple – you have to keep accurate records. Doing that can be time consuming, so ultimately you need to make it as easy as possible… so you don’t look like this when the DOT or Transport Canada have questions for you.
If you run assets, the Tailwind TMS keeps track of your truck and trailer maintenance. It also allows you to track driver performance and behaviour – from traffic violations and accidents, and beyond that, to also include any cargo claims.
Risk #3 – Missing Payments (Part 1 – Payments Customers Owe You)
A customer won’t provide a payment if they don’t have an invoice requesting one. And there are unfortunately a number of reasons why you may not invoice customers for your services.
- You might forget
- You may not have the paperwork (lost or late POD)
- The ‘Invoicing’ person is away…
One way to ensure that customers get invoiced is to shorten the cycle time from the delivery of the load to the issuing of the invoice. To help with this, you can get your drivers an app, like Tailwind’s free POD Complete mobile app.
Your driver downloads the app on their phone. Through the app you can send all trip details directly to your driver. They can view these details, and even mark the arrived and departed flags on the individual dispatch that they are driving.
This cuts down on phone calls to your dispatch department, and allows for easy communication between your driver and your dispatch team.
And… best of all… the driver takes a picture of the signed POD which will upload automatically and seamlessly into your TMS, attaching itself to the order in question.
No work by you – it’s all done by the driver and the app. Your POD is attached to the invoice auto-magically and can be emailed out to your customer on the day of delivery. You can invoice your customer before your driver even leaves the delivery dock!
We did an analysis with a 20-truck operation and our software saved them over $20,000 a year. By getting invoices out immediately, they got paid that much quicker and saved on interest charges.
Further savings arise if you can get paid fast enough that you don’t need to factor – as a factoring service eats into a significant percentage of your profits.
And along with getting you your PODs faster, Tailwind makes sure you invoice your customers by allowing you to easily track all your Orders, Dispatches AND Invoices.
Tailwind will run up-to-date AR agings and can provide your customers with their own AR aging report through the Customer Portal. This allows you to always show your customers what they owe you and how long that invoice has gone unpaid.
You can also send Account Statements to customers, serving as a gentle nudge to them to pay you…
Tailwind connects the Operations and Administration sides of your business and automatically sends a completed Dispatch over to Administration for invoicing.
So now you have a record of the delivery in your Completed Dispatches as well as Pending (soon to be Posted) invoices.
These lists ensure that you are able to track the issuing of your Invoices and collection on your Receivables – and they’re all linked to the Dispatches so that you have the ‘who’, ‘what’, ‘when’ and ‘how’ of the loads that you have delivered.
And it’s easily accessible to you, or others in the business. If someone is away or on vacation, there’s no scrambling around to figure things out. Just log in.
Missing Payments Part 2 – Payments You Owe to Drivers or Carriers
Relationships are the key to success. This not only extends to your customers, but also to your drivers if you’re a trucking company, or your carriers if you’re a brokerage.
And if you do both – there’s an even greater variety of relationships to manage.
In today’s market there are a lot of loads, but not enough capacity to move them. Being slow or confusing with pay is one sure-fire way to lose a good driver or carrier. Capacity is tight these days, and these folks have choices.
Tailwind helps you make sure that your drivers and carriers get paid for the work they do, and helps you track on the right deductions and expenses they incur.
You can issue comprehensive pay statements that make all details clear to your driver or owner operator, showing both revenue earned and deductions taken. Being able to provide settlement statements allows for transparency between yourself and the person you are paying
Making sure carriers are paid accurately and in a timely manner is one thing – then there’s the need to answer their questions as they arise… which can be often!
This is made easier on both them and you if you have a Carrier Portal.
Giving them access through a portal protected by a password not only improves your accessibility and transparency with your partners… it saves you time and resources. Resources that you can put to better use than dealing with loads that have already been shipped.
Risk #4 – Standing still
As humans we have the innate desire to keep things in balance in a way that helps us live easier. But that very human desire runs up against a business world where we need to adapt to compete, and to grow.
We all know of the market shifts that are making it more difficult to find drivers. For many trucking companies, this may be the stimulus to get their brokerage authority and extend their services by brokering out to other carriers.
Conversely, a brokerage may come across the opportunity to buy a small trucking company to add to their offering.
It’s good to have a software application that can adjust to any situation.
Tailwind can help you run both your trucking side and brokerage within the same application – no additional investment required. The application allows for branches where you can operate different divisions and business units.
Additionally, it can be used by a trucking company or brokerage wanting to track the activities and performance of different parts of their business.
Freight Business Risk #5 – Relying on Outdated Technology.
This risk can also fit in the ‘Standing Still’ umbrella – but we wanted to bring it to the forefront because it’s the focus of nearly every new call that we receive.
We have people struggling to keep their business organized because they’re growing and the old ‘Excel and a Whiteboard’ just isn’t working anymore.
There are others that don’t have the time to sit through multiple ‘needs assessment’ discussions just to get a leather-bound binder with a quote that involves far too high an investment, for a system that takes far too long to implement and even more time to learn – a system that’s still built on old client-server technology.
And then there are others who are tired of paying thousands upon thousands of dollars for annual maintenance on TMS systems that look like they were built when Risky Business was filmed.
We heard these stories – which is why Tailwind does technology bit differently.
The Tailwind TMS is:
- Offered via monthly subscription, so that you can adjust your usage according to your business conditions – scale up when you’re growing, scale back in leaner times.
- You can get up and running in five minutes – no big long assessments and needs analyses, expensive implementation charges, and long sales presentations. When you have to get going, you can do so with no wait.
- It’s Fully Web based – so you can access it from any location on desktops, laptops or tablets.
- Our API makes the the Tailwind TMS flexible, so additional integrations and new features can be continuously added – the TMS keeps getting stronger by the week!
And while we can’t be sure Tailwind will work for everyone, we do have a good process so you can figure that out for yourself – risk free. You can get a demo, or a free trial (or both) to see how it can work in your business.
Just being in business at all means that you are going to incur risk. But that doesn’t mean you can’t take tangible and prudent actions that lessen the likelihood that you will suffer from problems and failures. At Tailwind we understand that we can’t solve all your risk, but we feel that in using our TMS that you can mitigate the five common ones covered here, as well as a host of others (but this post is already getting too long….)
So while Tailwind can’t keep you from dumping your Porsche in a river,
Maybe, just maybe, it might help you feel good enough to dance around the office in your underwear…
…at least until the cleaning staff show up!
Editor’s Note: This post was originally published in July 2018 and has been updated in December 2020 for accuracy and comprehensiveness.