In the past few months, trucking companies have been grappling with the impact of inflation, a challenge somewhat mitigated by increased market rates.
While there has been a slight decline in inflation over the course of sometime, the persistence of increased prices remains evident.
Additionally, as consumers have significantly reduced their spending, the decreased demand for freight capacity is causing a decline in market rates. This culmination of factors paints a rather unfavorable financial scenario for carriers.
While there has been a marginal decrease in fuel prices and a slight easing in the industry's labor market, expenses persist at elevated levels.
However, amidst these challenging financial conditions, experts are advocating for a cost-saving measure: transitioning from a server-based transportation management system to a Software as a Service (SaaS) model. Yes, we are certainly talking about a Saas-based TMS system. LoadStop TMS is a fine example of SaaS-based TMS solution.
Transitioning to a SaaS-based TMS system is being suggested as a strategic approach to aid carriers in navigating the strain of accumulating financial constraints.
Recently, many companies have switched to SaaS-driven TMS systems, experiencing a significant positive change. With a SaaS-based TMS system, they have been able to save time and money.
Under the previous system, manual entry of every order was a necessity, leading to a highly laborious, time-intensive, and notably inefficient process. Furthermore, it lacked an electronic-proof delivery mechanism to accompany the drivers.
Because of implementing the new system, companies were able to streamline their operations significantly, thereby reducing their workforce. This move towards efficiency resulted in the removal of redundant job roles, a decision that is never easy to make.
However, the enhanced efficiencies rendered many previous job functions obsolete, leading to a more optimized and productive operational structure.
Since the integration of the SaaS-based TMS, the carrier's staff efficiency can witness an impressive 24% increase. This transformation has enabled companies to enhance their data management processes and automate workflows, all while enjoying seamless access to comprehensive load, truck, and driver information through a single click.
One of the notable advantages of this system is its capability to electronically deliver receipts to customers. This automated delivery mechanism has effectively eradicated the need for manual reports, resulting in dispatchers being able to double their driver count from 20 to 40, all without any compromise on quality.
Additionally, the SaaS-based TMS streamlines order entry and invoicing procedures, reducing errors stemming from manual input and eliminating unnecessary paper trails.
Along with these benefits, the system also empowers companies to easily scale up their operations and accommodate larger-volume customers. This adaptability enables businesses to seamlessly expand their services and cater to a wider client base.
In spite of the prevailing economic downturn, investing in technology such as a SaaS-based TMS holds the potential to enable carriers in establishing a scalable and automated operational framework. This positioning equips them for a more advantageous position in terms of yield when business activities regain momentum.
People running the businesses understand that dwelling in a period of inactivity is not sustainable. The absence of a clear endpoint should not hinder proactive measures. If apprehensions exist, incorporating novel technology, particularly the SaaS-based model, becomes a more feasible choice.
The absence of substantial upfront expenses in comparison to on-premises TMS, which entail substantial costs and efforts, often with a prolonged return on investment, makes the adoption of SaaS-based technology more attractive.
The SaaS-based platform offers the opportunity to implement these solutions, taking charge of the course of the business regardless of economic fluctuations. In moments of growth, integrating advanced technology enables an enhancement in overall operational efficiency.
Conversely, during downturns, the flexibility of this solution facilitates a controlled reduction as needed, without causing crippling disruptions.
The SaaS-based system offers a multitude of advantages over the conventional on-premises system.
Within the realm of SaaS and on-premises comparisons, let's delve into six primary aspects: availability, backup/restoration, futureproofing, interoperability, extensibility, and security.
In the context of availability, the SaaS model simplifies and automates scalability. A carrier need not acquire new servers or additional licenses to accommodate growth; everything expands harmoniously, allowing the company to expand seamlessly without encountering scaling challenges.
This is particularly advantageous for larger carriers with multiple partner and customer integrations, as they can scale without enduring prolonged downtime, unlike on-prem solutions, which often necessitate complex infrastructure development.
In terms of backup and restoration, SaaS offers heightened reliability. While on-prem systems may conduct backups on a weekly or even monthly basis, SaaS ensures data integrity by performing backups every five minutes via cloud processing.
Recovery times are also significantly improved. With SaaS-based TMS, the potential data loss is limited to five minutes, and system recovery can be swiftly executed from the ground up in a separate environment within four hours.
This stands in stark contrast to on-prem solutions that might be susceptible to catastrophic events like fires, which could leave hardware irreparably damaged.
The SaaS model facilitates futureproofing. Upgrading becomes seamless, preventing stagnation of technology that could expose systems to security risks. This flexibility also enables the incorporation of new technologies that enhance system performance and speed.
Interoperability is significantly enhanced by most TMS systems' application programming interface (API) orientation. This enables smoother integration of applications compared to the alternative of developing middleware that acts as an intermediary between an on-prem solution and external parties seeking access to data.
This agility is pivotal in meeting the growing demand for digital automation and data availability.
Extensibility ensures that software remains aligned with evolving business and technological needs. Regular software updates are a hallmark of SaaS-based TMS, occurring roughly every month, compared to the less frequent on-prem updates that can span years.
This continuous cycle of improvement enhances adaptability and makes training on updates more manageable.
Lastly, the security component is paramount. SaaS solutions are subject to constant penetration testing, ensuring robust protection. This differs from on-prem solutions, where such tests are less frequent. Leveraging SaaS solutions allows providers to handle security aspects, as full-time on-site security teams for on-prem systems are not commonly available for carriers.
Dan Popkin, sector vice president of global connected supply chain at Trimble, underscores security as a significant driver for SaaS TMS adoption. He notes that while the transportation sector has been known to lag in technology adoption, more forward-looking carriers are recognizing the merits of the SaaS approach.
This shift is gaining momentum, with smaller customers also expressing interest in transitioning to SaaS solutions.
He also said that other substantial factors, extending beyond peace of mind, encompass the avoidance of server and hardware maintenance during upgrades. Such upgrades tend to be considerably more costly with on-premises TMS in contrast to the reliably predictable subscription models.
Overall, embracing the SaaS model results in efficiency enhancements across all aspects of a carrier's operations, relieving them of system management duties and enabling them to concentrate on their core trucking activities.
In periods of inflation, making technological investments is a prudent choice for carriers, even if the inclination is to conserve funds and curtail expenditure.
Opting for a SaaS-based TMS can lead to enduring cost reductions in the face of transient market fluctuations, thus fostering sustained business cost optimization
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