What Are Managed Transportation Services?

The global supply chain is more interconnected than ever, but it’s also increasingly unpredictable. Disruptions such as capacity shortages, rising freight costs, and tighter delivery windows require innovative logistics strategies to keep operations running smoothly. At the same time, advancing technology and evolving consumer demands are driving businesses of all sizes to prioritize efficient and reliable shipping solutions. Shippers are under constant pressure to manage complex logistics, escalating transportation costs, and fluctuating carrier rates—all while meeting tight delivery deadlines.

Managed Transportation Services (MTS) provide a strategic solution to these challenges. By helping shippers organize their entire logistics operations, MTS enables businesses to focus on their broader objectives.

What is Managed Transportation?

Managed transportation is a logistics approach where a specialized provider handles the planning, execution, and optimization of a shipper’s transportation activities. Businesses—both small and large—outsource their freight and logistics functions to third-party logistics providers (3PLs) or logistics service providers (LSPs). These providers manage critical tasks such as procurement, rate negotiation, shipment execution, route optimization, and freight audits. Acting as an extension of a shipper’s team, they take on the day-to-day logistical workload, allowing businesses to focus on their core competencies and goals.

Key Features of Managed Transportation Services

• Transportation Management System (TMS): Managed transportation providers utilize advanced TMS solutions to streamline logistics operations, offering supply chain visibility and data-driven decision-making.
• Carrier Selection and Negotiation: Providers secure capacity by leveraging strong carrier relationships to obtain competitive rates and reliable freight capacity.
• Shipment Execution: Handling day-to-day activities like booking, dispatching, and tracking shipments.
• Freight Audit and Payment: Managed transportation including auditing invoices to ensure accuracy and minimize freight costs.
• Route Optimization: Providers use technology to optimize routes, reducing transit times and transportation costs.

Who Is Included?

Managed transportation services impact all stakeholders within the supply chain, including shippers, carriers, and end customers. Shippers benefit from reduced logistics challenges and improved operational efficiency, while carriers gain consistent business from trusted providers. End customers enjoy better service through reliable and timely deliveries.

How Does MTS Affect Transportation?

Managed Transportation Services operate through a systematic process designed to optimize every aspect of shipping logistics. From securing freight capacity to providing real-time tracking, these services reduce disruptions and improve overall transportation management.

How Do Managed Transportation Services Work?

The process begins with an in-depth consultation to understand the shipper’s specific needs, challenges, and goals. Here’s a step-by-step overview:

1. Assessment: The provider evaluates the shipper’s current logistics operations, identifying pain points and areas for improvement. They also analyze the shipper’s specific needs, including shipment volume, frequency, and destination requirements.
2. Custom Solution Design: A tailored plan is developed to meet the shipper’s requirements, integrating technology and best practices.
3. Implementation: The provider oversees the transition, training teams, and ensuring seamless integration of the new solution.
4. Execution and Management: Day-to-day operations are handled by the provider, including carrier selection, scheduling, and real-time tracking. Leveraging TMS solutions, providers determine the most cost-effective routes and identify the best transportation providers for each shipment.
5. Ongoing Optimization: The provider continuously evaluates performance metrics, including freight costs, on-time delivery rates, and carrier performance, to identify opportunities for improvement.

Example: A retail company needing nationwide distribution might partner with a managed transportation provider to handle truckload and less-than-truckload (LTL) shipments. The provider uses their transportation network to secure capacity, optimize delivery routes, and monitor shipments in real time, reducing freight costs and improving customer satisfaction.

Managed Transportation Services vs. Freight Brokers

While freight brokers connect shippers with carriers, managed transportation providers go a step further by managing the entire transportation process on behalf of a business. Freight brokers focus on individual shipments, while managed transportation services offer end-to-end logistics solutions, taking a strategic and long-term perspective.

Benefits of Managed Transportation Services

• Cost Savings: MTS providers leverage their buying power and technology to secure competitive rates and minimize unnecessary expenses.
• Improved Supply Chain Performance: Real-time data and business intelligence improve decision-making and operational efficiency.
• Improved Visibility: Real-time tracking and reporting offer shippers detailed insight into their supply chain.
• Scalability: Managed transportation solutions adapt to fluctuations in demand, ensuring consistent service during peak seasons.
• Risk Management: Providers handle regulatory compliance and mitigate risks, giving shippers peace of mind.
• Better Customer Service: Reliable and efficient shipping improves customer satisfaction and loyalty.

Who Would Benefit?

Managed transportation services are ideal for businesses in industries like retail, manufacturing, food distribution, and e-commerce. Small businesses looking to scale efficiently and large corporations seeking to optimize their supply chains can both benefit from these solutions.

Challenges of Managed Transportation Services

While managed transportation offers many advantages, it’s essential to choose the right provider. Challenges can include:

• Initial Implementation: Transitioning to a managed transportation solution requires time and resources.
• Dependency on Providers: Businesses must carefully select providers with proven expertise and robust technology.
• Cost vs. Benefit Analysis: Shippers should evaluate whether the long-term benefits outweigh initial investment costs.

How to Choose the Right Managed Transportation Provider

When selecting a provider, consider the following:

• Do they offer a TMS solution?
• Are they experienced in handling carrier relationships and negotiating carrier rates?
• Can they adapt their services to meet your specific needs?
• Are they committed to the continuous improvement of your business?
• Do they have a proven track record of delivering results?

Mercer Transportation: Your Trusted Managed Transportation Partner

At Mercer Transportation, we understand the importance of reliable, cost-effective transportation services. Our Transportation Solutions are designed to simplify logistics operations and deliver measurable results. With decades of experience, advanced technology, and a commitment to customer satisfaction, we help businesses of all sizes achieve their goals. 

Our services include:

• Comprehensive TMS solutions
• Freight audits to ensure cost savings
• Route optimization for greater efficiency
• Real-time tracking for improved visibility
• Dedicated support from logistics experts

By partnering with Mercer Transportation, you can simplify your supply chain, reduce transportation costs, and focus on what matters most: growing your business.