Home > Uncategorized > Routing Guide: 6 reasons it is crucial for effective Transportation Management

Routing Guide: 6 reasons it is crucial for effective Transportation Management

What is a Routing Guide?

A Routing Guide is a document whose purpose is to outline the rules that govern how a company’s shipments should be handled. This could include any shipment ranging from small package, airfreight, import/export, to full truckloads of product. The goal is provide a document with straight forward instructions detailing what carrier and account numbers are to be used for any given shipment when the cost will be paid for by that company.

To illustrate, a Routing Guide would specify the correct way to send a shipment in the following sample situations:

• What company to use for sending office correspondence (Fed Ex or UPS?) and what account number to use: the best answer may be different depending on service required such as over-night or ground.
• The correct Less-than- Truckload carrier to use when a buyer has purchased product from a supplier and the order needs to be delivered to one of your locations: LTL tariffs are complicated and certain carries may be cheaper depending on the origin and destination for a given shipment.

Any time a shipment is being routed on behalf of your company, and the cost is hitting your bottom line, it is important to make sure the correct routing decision gets made. A good Routing Guide ensures that happens.

What happens without an effective Routing Guide?

Having a clear, concise Routing Guide is of particular importance when a company is decentralized geographically, has multiple locations, or a large supplier/ vendor base.

When the correct routing is not followed several negative things can happen.

• Product is routed with the wrong carrier resulting in potentially bad service and higher cost
• Product arrives at the wrong location
• Packaging may be incorrect or sub-standard
Bill of Lading -filled out incorrectly or shipments will have incomplete documentation , interrupting the receiving process at your facility
• Freight Invoices are incorrectly rated or sent to the wrong address for payment, delaying payment
• Shipping volume will not be recognized when volume discounts are part of a contract

As part of a Routing Guide, specific packaging and paperwork requirements you need suppliers and vendors to be mindful of can be spelled out. For instance – do you need pallets to be stacked less than a certain height to fit in your facility’s racks? Do you require an Advanced Shipping Notification or Purchase Order number noted on the Bill of Lading for the product to be received properly? There are many low cost and free Transportation Software solutions offering tools for helping to create and distribute your Routing Guide.

Routing Guides are intended to be dynamic documents. Make sure you have a process to update and distribute the Routing Guide to your entire vendor base and across internal departments as updates are made. If the updates are not disseminated effectively then the instructions will become quickly outdated and miss-routed and/ or miss-rated shipments will occur.

Not having an up to date Routing Guide creates extra cost and hassles for a company, so make sure your Routing Guide document is current and widely distributed.

Logistics Software

The Planning Process: How orders and shipments are planned has a direct impact of shipping costs. Using efficient packaging, getting the maximum volume of product on a pallet, and the most cube on a truck all impact cost on a per unit basis. Combining multiple small orders on a larger full truckload is one way to build efficiencies into the load planning process. Using logistics software for route optimization is a way to add efficiency in to the load planning process.

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