How to avoid the 5 most costly mistakes in transport companies?

Although it might seem that transport companies lose the most money due to serious incidents, such as accidents, it is actually everyday oversights that play a key role. These include: failure to properly vet contractors, managing vehicle and driver schedules on paper, choosing transport routes without thorough analysis, lack of effective transport monitoring, and making decisions without access to data. Each of these elements may seem manageable on its own, but in the long run, they can effectively reduce profit margins, take up the team’s valuable time and test customers’ patience. 

The good news is that these losses can be minimised by streamlining processes and automating routine tasks. A TMS system, such as fireTMS, brings key information together in one place, enables process control, and provides tools for planning, monitoring order fulfilment, and analysing results. Below, we describe the 5 most costly mistakes in transport companies and show how fireTMS features help to avoid them.

Error no. 1. Failure to verify contractors

Failing to verify contractors is one of the most serious mistakes in the transport industry. This applies both at the stage of finalising order details and when issuing invoices for services rendered. It is particularly important when a company serves many clients, the order deadline is tight, and there is no time for verification using traditional methods.

Why is a lack of verification so costly?

Failure to check the reliability of contractors and to establish the terms of cooperation before accepting an order can lead to the following problems:

• delayed payments and a threat to the company’s cash flow,
• additional work involved in constantly sorting out transport details, and even  chasing payments and debt collection,
• the risk of missing payment deadlines when dealing with a large number of customers.

In transport companies, it is particularly important to adopt a systematic approach, i.e. regular verification of clients and enforcement of agreed terms of cooperation. This is largely made possible by the automation of these processes, e.g. through investment in a TMS system.

How does fireTMS help with verifying contractors?

fireTMS helps verify contractors through mechanisms that organise the terms of cooperation and monitor them automatically. 

• Trade credit and limits – in fireTMS, you can assign both a credit limit and set a maximum value for unpaid invoices for an individual customer or a group of contractors. Once one of these values is exceeded, the system can block the ability to issue further orders based on loads added by that partner.
• Temporary customer verification – a verification validity period can be set for each contractor. If it is not renewed on time, fireTMS blocks further cooperation until re-approval.
• Verification in VIES – additionally, in fireTMS, you can check a contractor in the VIES database when issuing a sales invoice.

Error no. 2. Lack of dynamically updated vehicle and driver schedules

The second error relates to the classic problem of work organisation in a transport company without a transport management system. Maintaining vehicle and driver schedules in isolation from the order management system can have serious consequences, such as delays in order fulfilment or failure to provide the service altogether. Above all, the issue is the lack of a single source of data on vehicle and staff availability, which carries a high risk of errors when schedules exist in physical form (on paper or noticeboards) or in Excel or another programme. Such inconveniences can escalate into major problems, particularly when plans need to be changed at short notice due to delays, vehicle breakdowns, or staff holidays or sick leave.

Why does the lack of vehicle and driver schedules generate costs?

The lack of schedules updated in real time usually results in the following problems:

• fleet downtime when the dispatcher fails to notice that certain vehicles have no assignments,
• assigning several jobs at the same time to a vehicle or driver that is already occupied,
• ineffective communication with drivers regarding their work schedules,
• setting tight deadlines for order completion and causing errors in the organisation of drivers’ work.

As a result, an inefficient team suffers, which may be overburdened with work, but so do the company’s finances, as the lack of effective tools affects the timeliness of delivery and, consequently, the profitability of orders. 

How does fireTMS help organise work schedules?

fireTMS aids dynamic planning through a real-time updated vehicle and driver schedule, which displays fleet capacity and driver availability in one place. Schedules are generated based on order data, which eliminates most issues related to human error.

What does work planning with fireTMS entail?

• Planning takes place in a single database, rather than across different versions of several files
• The system visually displays work schedules, allowing you to quickly spot excessive workloads and gaps in the schedule
• Dispatchers and managers can make decisions faster and more easily in emergency situations (breakdowns, delays or driver illness).

Error no. 3. Ineffective route planning

Securing a well-paid job does not guarantee a profit if the transport route is not properly planned. A common mistake at this stage is planning journeys out of habit – for example, sticking to a fixed route, relying on the driver’s knowledge, or simply selecting the shortest route on a map. This approach exposes the company to additional costs, such as high toll charges, and also results in longer journey times or the need to find detours at short notice, for example due to bans on lorries entering certain areas. 

Why can inefficient route planning be so costly?

Inefficient route planning can have the following consequences:

• higher fuel costs,
• failure to factor in toll charges in cost calculations,
• a higher number of kilometres travelled without a load,
• unnecessary detours and delays.

Worse still, the costs mentioned above are only known once the vehicle returns to base, which causes the transport company’s profit margin to fall, affecting its cash flow.

How does fireTMS help with route planning?

fireTMS assists with route planning through mapping solutions designed for heavy goods transport (unlike popular mapping services for passenger vehicles, e.g. Google Maps). Importantly, the maps in fireTMS allow you to determine several transport options, depending on the shortest distance, lowest costs or best time, as well as avoiding toll roads. Furthermore, they enable a preliminary cost calculation, allowing you to estimate the margin for a given order. Furthermore, Here maps allow for further route optimisation, including the exclusion of ferries and countries with high tolls, or the consideration of time and tonnage restrictions.

What should be taken into account when planning routes in fireTMS?

• Defining the most advantageous route option, and then choosing from the following options: fastest, shortest, cheapest
• Including road tolls in the calculation
• Adapting the route to the vehicle’s specifications to avoid surprises such as entry bans for heavy goods vehicles

Error no. 4. Lack of route monitoring

Planning the most cost-effective routes is only half the battle. Much depends on the execution of plans and actual expenditure on freight transport. Without effective monitoring tools, a company often only learns of problems that have occurred en route once delays have already arisen. This makes it impossible to respond effectively to deviations from the plan and make the right decisions.

Why does the lack of tools for monitoring shipments cost so much?

The lack of real-time monitoring of order fulfilment means that communication with both drivers and customers becomes ineffective, and transport costs can spiral out of control. 

What are the consequences of not monitoring orders?

• More phone calls to drivers and manual updates of transport statuses
• Delayed decisions when problems arise en route or delays occur
• The possibility of higher-than-expected order fulfilment costs
• A higher risk of disputes with customers and complaints regarding late order fulfilment
• Poorer service quality based on outdated information.

In practice, shipment monitoring is a way to respond more quickly and improve communication with the customer.

How does fireTMS help with transport monitoring?

fireTMS helps with transport monitoring through several tools. First and foremost, integration with numerous GPS telematics systems is crucial, allowing you to check the status of orders in real time. Additionally, fireTMS Driver mobile app ensures more efficient communication, enabling the dispatcher to quickly contact the driver. Furthermore, fireTMS features the Actual Routes function, through which the system alerts the dispatcher if a driver has deviated from the designated transport corridor, helping to reduce transport costs and quickly identify any potential issues en route. Finally, communication with customers can be streamlined using Customer Panel, where they can, among other things, check the status of an order and download documents related to it. 

What does a transport company gain from the solutions included in fireTMS?

• The team is aware of the current situation without having to collect data manually
• Easier communication of order status to customers
• Easier management of delivery times and transport costs, particularly when multiple shipments are being transported at the same time

Error no. 5. Lack of reports on the company’s operations

The final mistake we’ll discuss is the lack of effective reporting within the company. This is a mistake whose consequences aren’t immediately apparent, and for smaller hauliers, they may not even become evident for years. The company operates, orders keep coming in, but decisions are made on a hunch. Meanwhile, without reports, it is difficult to answer simple questions, such as which customers are the most profitable, which vehicles generate the most revenue, or what the daily turnover looks like over a given period. As a result, making decisions without such data can lead to serious organisational and financial problems.

Why is the lack of reports risky?

If a company operates without reporting or if reports are prepared manually based on old data, the following problems usually arise:

• decision-making based on outdated data,
• errors in data compilations, as reports are based on multiple sources,
• chaos caused by the lack of standardised metrics within the company, e.g. customer margins,
• difficulties in monitoring profitability and costs on an ongoing basis.

A common result of this approach is the execution of less profitable orders, which only in theory generate high profits, or delayed HR or investment decisions.

How does fireTMS help in this area?

fireTMS enables you to work with automatically generated reports for transport and freight forwarding, which are updated in real time based on data within the system. This allows for a quick analysis of the company’s situation and the making of key decisions based on measurable criteria.

Examples of questions that can be answered using reports in fireTMS

• Which orders were the most profitable last month?
• Which vehicles generated the highest revenue and the lowest costs?
• What is the fuel consumption breakdown by vehicle?
• Which customers generate the highest margins, and which incur the highest costs?

Summary: five mistakes in transport companies, one common denominator

The five mistakes described in transport companies share a common theme: disorganised processes and a lack of up-to-date data in one place. The scattering of information and the manual execution of tasks across different programmes increases the risk of costly oversights.

fireTMS prevents these mistakes by:

• automating contractor checks,
• planning shipments using vehicle and driver schedules,
• effective route planning and transport cost calculation using maps,
• monitoring order fulfilment through integration with GPS telematics,
• real-time reporting and the ability to make decisions based on up-to-date information from the system.

Want to see how much time and money you can save by streamlining your processes? fireTMS, a comprehensive transport management system, allows you to bring together all key aspects of your operations in one place: from contractor verification, through fleet and route planning, to shipment monitoring and reporting. Sign up for a free account now, add your vehicles to fireTMS and see how our system can help you eliminate costly mistakes in running your transport business. The free trial period for fireTMS lasts a full 14 days.