How Modern Freight Brokerages Manage Exceptions

Moving freight is a challenging process that requires massive coordination and collaboration between multiple parties. Supply chains intimately weave manufacturers and retailers, with carriers as a connecting point, before ultimately reaching consumers. The logistics mechanism within supply chains has many gears and pulleys that must function properly in tandem with others to move freight from start to finish.

Exceptions pose a threat to the smooth operation of these supply chains, causing them to slow down or grind to a halt. With the constant fluctuation of the transportation industry, increasing consumer demand, and continued challenges presented by the COVID-19 pandemic, it is becoming more difficult for logistics professionals to move loads without hiccups.

In this post, we'll explore what exceptions are, how technology can minimize their impact while improving your workflow, and provide additional tips for managing exceptions.

What Is Exception Management?

A freight exception is an abnormal event that occurs in the delivery process. Exceptions temporarily stall shipments during transit and can affect their arrival time. Common exceptional situations include:

• Vehicle breakdowns
• Road closures
• Inclement weather
• Terminal congestion
• Political events (e.g., global trade wars)
• Difficulties with customs regulations

These situations cause challenges for all parties involved. Exception management is the process of dealing with the issue to get the shipment back on track; this requires a strategic response that minimizes the risk of disruption.

Technology's Role in Exception Management

Investing in technology can reduce the impact of freight exceptions. A transportation management system (TMS) improves visibility and communication among shippers, brokers, and carriers, while enhancing workflows and sustainability. A TMS also provides efficiency gains by automating processes throughout the supply chain cycle, including tendering, load tracking, invoicing, and measuring performance.

A TMS tracks events in real-time and automatically triggers alerts when exceptions occur. Shippers can identify recurring exceptions and automate their TMS to only trigger alerts for abnormalities. Creating rules that focus attention only on unknown exceptions, rather than reacting to everything, allows a more effective allocation of resources for shippers.

For example, a shipper can create a rule that all invoices, up to a certain dollar amount, are automatically approved and paid. Additionally, they can build in a small buffer so that nominal charges incurred during the shipment (e.g., an entrance fee or toll) do not create an exception. This will allow these invoices to pass through the system for payment and save the managers time from having to manually review and approve. 

Whether off-the-shelf or homegrown, TMS platforms continue to evolve, creating more advanced functions to support increasingly complex needs. As technology adoption increases, communication between shippers, carriers, and brokers is expected to improve. Still, implementation takes commitment. Organizations with TMS platforms get the most return on their investment when they constantly reassess their needs and invest in the capabilities that best support them.

Although technology has become increasingly valuable for managing exceptions, particularly for saving time and maximizing efficiency, there is still a necessary human element to moving freight that cannot be eliminated. Technology does not replace the effective communication and coordination required when shippers, carriers, brokers, and customers come together to solve challenges. Providing strong customer service and demonstrating empathy when issues arise will always be essential in logistics.

Tips to Enhance Exception Management

Shippers looking to improve their exception management processes should follow these best practices:

• Take advantage of artificial intelligence to automatically handle recurring exceptions
• Create real sets to define what actions to take when an issue arises
• Choose a TMS that enables automated exception management
• Leverage data on exceptions to understand why they occur, how to prevent them from recurring, and what steps are necessary to ensure continued success and reduction in freight spend
• Use machine learning to increase the level of automation in exception management further
• Remember to handle the unusual exceptions with grace and dignity, relying on all the facts to make an informed decision and reduce delays
• Integrate all shipping systems within an overarching TMS to ensure data is timely, accurate, and reflects the needs of your supply chain

The Right Tools + the Right Support

By leveraging a balance of intuitive tech tools with productive communication and support, shippers can lower their labor costs and risk of error. In addition, a modern TMS for exception management, such as Armstrong's proprietary TMS, ATGFr8, can also add value by offering productivity functions to refine the shipping process further.

If you want to see first-hand what our technology solutions can do for your business, visit our website to schedule a software demonstration.