Data

Best Practices

Data Best Practices for Freight Intelligence

The organization of your TMS data means everything when it comes to being able to make the most meaningful Freight Intelligence dashboard with the most valuable insights possible.  The key factors behind data points you can trust are standardized processes and procedures that your entire company understands and executes consistently.

 

If you know your historical data is not entirely reliable, your leadership team must decide if a data hygiene project on past data should be undertaken.   While there is no absolute right or wrong answer to this, consideration should be given to the fact that no matter how disciplined your company’s processes, each company must determine a starting date for their Freight Intelligence platform.  Due to the inevitability that processes and codes change over the years, it is important to ensure you’re always comparing apples to apples.  For this reason, a data hygiene exercise is always highly recommended.

 

Data hygiene is the process in which your historical data is reviewed to ensure the quality and consistency of the tags or data point labeling within your TMS. This type of project needs to be handled with extreme caution and professionalism.  K-Ratio has hygiene specialists with expertise who can assist.

 

When it comes to current and future data, however, there is no debate; Freight Intelligence has moved beyond a tool for growth into an absolute necessity for corporate survival. The industry is getting faster, leaner, and smarter, and the pace of increased efficiency is rapidly accelerating. This best practice guide is designed to empower your team by creating or maintaining certain tags within your TMS database.  The most important tags exist within orders, so we’ll focus our attention there.  

 

Definitively the most valuable way you can look at your portfolio is by categorizing individual loads by the method in which they were awarded to you. What we refer to as the market code distinguishes the difference between contracted and spot market loads. Contracted business, or “RFP”, means it was tendered to your company with a pre-contracted rate on file. “SPOT” business is defined by the method in which it was quoted: from a bid board or customer reaching out directly, with no predetermined rate in place.  The classification of loads as Spot and Contract allows for further, deeper analysis and business development, as the relationship between these two freight categories is the industry’s most influential dynamic. One rate is floating while the other is fixed, and the difference in-between the two is the very essence of every single freight brokerage and the most dominant factor on a carrier’s revenue per mile. Combining the two market codes hides the complete story, leaving executives susceptible to anecdotes and storytelling, instead of objective, data-centric decisions. 

 

External data sources provide insight to national outbound tender rejection levels and national volume which correlate with your portfolio.  Watching how revenue and margins are impacted by these macro trends provide your company with meaningful insight into how your team is performing under conditions, while aiding with budget projections.

 

As an executive, you need a macro level view of your portfolio and must understand how much of your business revenue or margin is dependent on contract and spot business, as well as the diversity of customers making up your book of business.  This will define the level of risk and value of the company.

 

The vernacular used by your TMS provider or internally to you may vary, but the fundamentals apply across the board.  Not all the following are required however are recommended.

 

Brokers/3PLs

 

Unique ID numbers need to exist for every order or shipment.

 

Mode identifier will be used to differentiate between full truckload, LTL, intermodal, air freight.

 

Market code is key to separating how an order was awarded to you.  Was it tendered with a pre-contracted rate, such as from an RFP, or was it spot quoted, from a bid board or by a customer reaching out directly?  Having “RFP” and “SPOT” indicators on every order is likely to enable the most powerful data filtering.  

 

Equipment type used to transport the shipment will undoubtedly affect the metrics. Utilizing industry standard codes such as “V” for dry van or “R” for temperature controlled or “F” for flatbed truckloads are recommended.  Additionally, usage of more specialized equipment must be part of this selection, such as straight truck, sprinter or cargo vans.

 

Customer ID codes must be unique and applied to every shipment.

 

Salesperson codes must be tied to the order level or within the customer profile.

 

Account Manager or customer operations representative code should be present at the order level, if your organization has such a position.

 

Charges is the base revenue rate being billed to your customer.

 

Other charges are the accessorials billed to your customer, such as detention, lumper or layover.

 

Fuel should be flagged as or separate line item as the “other charges”.

 

Total charges are the sum of “charges”, “other charges”, and “fuel”.

 

Dispatcher, carrier sales representative or broker code should be present within the movement of each order.

 

Carrier pay is the base rate plus fuel, often quoted as a flat rate.

 

Other pay are the accessorials paid to your carrier, such as detention or layover.

 

Total pay is the sum of “carrier pay” and “other pay”.

 

Margin is total charges minus total pay calculation.

 

Target pay is the goal rate in which your company would like your “dispatcher” to pay to a carrier, such as the current market rate minus X percent.

 

Max buy is the highest rate in which your company would like your “dispatcher” to pay a carrier, such as the current market rate.

 

Standard fields such as origin name, origin city, origin state, origin zip, consignee name, consignee city, consignee state, consignee zip, scheduled and actual arrival/departure times will be necessary.

 

Other fields, such as, commodity, customer reference ID, billing distance, weight, BOL received flag, ready to bill/billed order flag, and service level type may come in handy.  

 

Each logistics company is unique and K-Ratio may have other recommendations on how to categorize the data.  Bucketizing should be done no more or no less than necessary to ensure the data isn’t skewed by combining the characteristics.

 

Carriers


Unique ID numbers need to exist for every order or shipment.

 

Mode identifier will be used to differentiate between full truckload, LTL, intermodal, air freight.

 

Market code is key to separating how an order was awarded to you.  Was it tendered with a pre-contracted rate, such as from an RFP, or was it spot quoted, from a bid board or by a customer reaching out directly?  Having “RFP” and “SPOT” indicators on every order is likely to enable the most powerful data filtering.  

 

Equipment type used to transport the shipment will undoubtedly affect the metrics. Utilizing industry standard codes such as “V” for dry van or “R” for temperature controlled or “F” for flatbed truckloads are recommended.  Additionally, usage of more specialized equipment must be part of this selection, such as straight truck, sprinter or cargo vans.

 

Customer ID codes must be unique and applied to every shipment.

 

Salesperson codes must be tied to the order level or within the customer profile.

 

Load Planner otherwise referred to as account manager or customer operations representative code should be present at the order level. This is the person responsible for the booked revenue on the truck.

 

Dispatcher code would be associated with the movement of the order and can be the operational person responsible for the driver.

 

Charges is the base revenue rate being billed to your customer.

 

Other charges are the accessorials billed to your customer, such as detention, lumper or layover.

 

Fuel should be flagged as or separate line item as the “other charges”.

 

Total charges are the sum of “charges”, “other charges”, and “fuel”.

 

Driver pay is the agreed upon rate to be paid to a contractor or the hourly or mileage rate associated with the order.

 

Driver other pay the line item details of what earning amount is made up of including: order bonus, layover, lumper reimbursement, detention, etc.

 

Driver total pay is the total earning amounts of the employee’s payroll or contractor’s settlement associated with individual orders. 

 

Standard fields such as origin name, origin city, origin state, origin zip, consignee name, consignee city, consignee state, consignee zip, scheduled and 

actual arrival/departure times will be necessary.

 

Other fields, such as, commodity, customer reference ID, billing distance, weight, BOL received flag, ready to bill/billed order flag, and service level type may come in handy.  

 

Each trucking company is unique and K-Ratio may have other recommendations on how to categorize the data.  Bucketizing should be done no more or no less than necessary to ensure the data isn’t skewed by combining the characteristics.

 

Contact K-Ratio at info@k-ratio.com or check out our website for more details at www.K-Ratio.com.

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