If the global pandemic taught the business world anything, it’s that knowing where your goods are in the supply chain at any given time is both a key differentiator and a competitive advantage. Going into 2020, those companies still using spreadsheets, disconnected systems, and emails to share information and run their supply chains quickly found themselves underwater when the pandemic emerged. With it came unprecedented supply shortages, transportation snarls and labor constraints, all of which followed us right into 2022.
Due to its highly specialized nature, tank transport requires an especially high degree of supply chain visibility to get it right. And it’s not just about knowing where your truck is at all times; it’s also about monitoring and managing the vehicle’s contents in a way that ensures safe, timely and reliable transport from origin to destination.
By automating these activities on one transportation management system (TMS) that provides high levels of visibility, companies can achieve this goal without the need for additional resources. They can also save money, as the typical TMS provides a 3-5% return on investment in the form of lower transportation costs. That represents up to $5 million in cost savings for a company with $100 million in annual freight spend.
The savings don’t end there. Using a TMS that provides high levels of supply chain visibility, companies can monitor how much weight or volume they can put in a tank truck, avoid accessorial charges (which can add up to 2% of total freight spend), and increase usage of the lowest-cost carrier, along the way racking up even more cost savings per load. And when software determines the shortest transportation route, eliminates deadhead miles, reduces engine idling times, and lowers carbon dioxide (CO2) emissions, everyone wins.
Manage the complexities
In the bulk truck market, the product-specific requirements that may need to be applied to the truck that’s actually transporting the product presents some unique challenges. It can be as simple as a certain lining to protect the overall tank of the truck from erosion and corrosion to very specialized valves. For example, tallow transported in a bulk truck must be heated or the driver may not be able to discharge the product when the shipment reaches its destination.
Another challenge involves the marriage of the product to the conveyance and ensuring that it’s always the proper match. The problem escalates for any company that’s making multiple products, each of which may have its own specific requirements. A shipper can resolve this issue by running its own fleet of equipment, which allows it to better control the alignment and assignment of loads and vehicles. That means a company with multiple products and its own fleet will need several vehicles for each different product. This makes owning the fleet difficult and expensive.
In some cases, a shipper may ask a carrier to assign a set of equipment and dedicated fleet to cover their tank truck loads. That way, the company can worry less about owning equipment that may be underutilized, but also maintain better control of the assignment of the order to the conveyance and to make sure there’s no cross-product contamination. Another approach is to rely entirely on third-party carriers, knowing that those providers have the available equipment and the ability to run on a handful of lanes.
Factor in potential constraints
From the TMS perspective, each of these scenarios presents its own set of complexities and requires a different approach. Whether communicating to a dedicated fleet or third-party carriers, for example, managers need to know exactly what’s required for the load and that they’re only assigning it to carriers capable and knowledgeable in carrying that product. The software can be configured to address these and other requirements, minimize the risk of cross-product contamination, and ensure the right product shows up at the right customer location.
For tank transporters, supply chain visibility factors in potential constraints (i.e., which orders can be assigned to certain trucks), and tells shippers or manufacturers where their goods and transportation assets are at any given time. Having these insights can govern when the manufacturer will be able to ship another load of that product. This is especially important for the company that’s using its own fleet or a carrier’s dedicated fleet, both of which will have a finite number of vehicle resources to work with.
Companies working with third parties that manage their bulk freight need carriers that have 100% visibility over what’s going on with their transportation networks. Even if they’re not sharing that information directly with the shipper (some do, others don’t), the fact that their carriers are using visibility platforms greatly increases the probability that the shipper is going to get the service that it’s paying and contracted for.
Solve for now, plan for the future
The driver shortage has impacted all corners of the trucking market, but it’s particularly acute in the bulk transport sector, where tighter constraints and licensing requirements can significantly whittle down the pool of available drivers. For example, a bulk shipment of sulfuric acid can obviously be a potential hazard, so the driver has to both be a skilled driver and know how to safely handle the acid during loading and unloading (e.g., all connections must be managed properly, ensuring proper pressurization for safe loading and unloading, and so forth).
With their complex tendering algorithms, an advanced TMS can help companies determine optimal loading and unloading schedules, thus reducing the burden on drivers and creating a safer operational environment for them. The software also helps companies improve efficiencies with load rack scheduling capabilities, which pinpoint specific slots for tank truck deliveries, which often require more hands-on involvement than a more conventional shipment.
With the capacity constraints, supply chain shortages and labor issues in full swing, more companies are turning to technology to help them gain visibility over their supply chains, optimize their routes and select the lowest-priced carriers. They’re also using technology to manage their own dedicated and private fleets, manage costs in a rising freight rate environment, and make better overall transportation decisions. Combined, these “wins” are helping bulk stakeholders solve for the “now” and also plan for the future.