What impacts the financial health of a brokerage faster: more revenue producers or better technology? Conventional wisdom would say to add revenue producers but hold the line on back office costs. But when a brokerage in Tennessee was forced to lay off brokers during the recession, it learned how adding technology could increase efficiency and make up for the reduction in staff.
Like many other brokerages, Carrier Services of Tennessee was hit hard by the recession that began in 2008.
That year, the 21-year-old company laid off more than half its brokers—downsizing from 11 brokers to 5. Back-office staffing was already lean. The owner and one other employee provided back-office support, while three independent sales representatives sought out new business.
Before the recession, Carrier Services was doing $3.8 million a year in business. That figure dipped during the recession, but by 2011—and adding back just one broker position—the company hit $7.3 million. Within three years, the company had doubled its revenue with half the staff.
How did they do it?
“During the recession we added technology that helped us work smarter and faster,” said Sue Spero, president of Carrier Services of Tennessee, based in Mt. Juliet, 20 miles east of Nashville.
Using TMS to its full potential
Although Carrier Services had been using DAT Keypoint® transportation management software for a number of years, it was using the older UNIX-based system with a plain text interface. In January 2009, the company upgraded to the Windows version of Keypoint, with its user-friendly graphic interface and improved functionality.
The company then focused on streamlining processes and eliminating the need to enter the same information multiple times in the various computer applications it used. It took advantage of Keypoint’s single-entry system for accounting and operations.
To speed up order entry, it added Electronic Data Interchange (EDI) capability to Keypoint. That allowed the company to quickly convert a request from a shipper into an order in Keypoint. Details from the shipper, such as origin/destination, equipment type required, weight, etc., were automatically populated in the TMS.
Integrating with DAT products
To gain further efficiencies, Carrier Services took advantage of Keypoint’s integration with DAT products.
Integrating the DAT Power load board—which Carrier Services had used for many years—into Keypoint allowed it to convert an order into a load posting in seconds. There was no longer a need to open the load board program and type in the posting details. Brokers could also search for trucks on the load board from within their TMS.
Carrier Services also integrated DAT’s carrier monitoring service, CarrierWatch®, into its Keypoint TMS. That eliminated the need to open a separate program to view a carrier’s CSA scores, DOT authority and insurance certificates. It also allowed Carrier Services to combine DAT’s third-party-verified information with its own notes about a particular carrier.
“If we hear that a certain carrier is running a scam, we can add a note in our TMS that says Do Not Load,” said Spero. “A month later if we get a call from that carrier, our brokers will see the note. We wouldn’t be able to keep track of things like that without a TMS.”
Spero says it’s important to use your TMS to its maximum potential, especially now that capacity is tight. Spero relies on the software to keep track of her core carriers and her brokers turn to them first when they have a load to move.
“Over the years we’ve worked with thousands of carriers and there’s no way we can remember which lanes they run, which loads they’ve moved for us, and what rate we paid the last time we used them,” said Spero. “You have to use your TMS to mine that historical information.”
Success built on open relationships
Spero maintains that the secret to her company’s success has been its honest and open relationships with its customers—both shippers and carriers. DAT Keypoint—integrated with DAT products—helps her to keep track of those relationships.
“We couldn’t do it without Keypoint. There’s no way,” she said. “It’s worth its weight in gold.”
Categories: Best Practices and Benchmarks