“Why is digital transformation important?” was answered loud and clear in 2020, said Adrian Gonzalez, a leading industry analyst with more than 20 years of experience in transportation management, supply chain and logistics. “You can’t grow your business profitably, and you can’t meet the changing needs and expectations of your customers without it.”
“The pace of change in technology continues to accelerate as it plays a greater role across all industries,” added Gonzalez, the founder and president of Adelante SCM, a peer-to-peer learning and networking community for supply chain and logistics executives and professionals. “Digital technology is especially transforming and driving a new era in freight transportation and logistics and delivering business value in the process.”
Gonzalez, who also hosts Talking Logistics, an online video talk show and blog featuring interviews with supply chain and logistics industry thought leaders, went on to say that supply chain and logistics markets are heading toward network-based transportation management solutions because there are clear and measurable benefits. “Common platforms enable thousands of potential connections for shippers, carriers, brokers, 3PLs and others involved in transportation and logistics,” he stated. “They simplify and open opportunities to more efficiently collaborate, and to discover new potential partners.”
Simplifying Data Aggregation
For shippers, Gonzalez noted, the old model was one-to-one connections with carriers using EDI and other legacy technologies. Today, through APIs, platform models enable shippers to connect with many carriers. For example, shippers who open a new distribution center or have freight on a new lane can use these solutions to discover which carriers offer the services they need and have available equipment.
Historically, aggregating data has been a hurdle to realizing the full potential of network-based solutions, Gonzalez pointed out. But that barrier is starting to come down because what evolved out of the Software-as-a-Service model is a recognition that there is true value in having common data available for all parties, and that with these systems in place it is possible to change processes.
“The benefit of having all the data you need in one platform is the ability to more efficiently work with and connect to new partners as needs arise,” Gonzalez said. “By aggregating data and applying machine learning algorithms and analytics, it is possible to understand performance at a granular level, take action from the knowledge you gain, and take advantage of opportunities.”
“The network platform-based approach does require a shift in thinking, and understanding that this is a better way to do things,” Gonzalez added. “But now that the technology has caught up with the vision, cloud computing capabilities and increased Internet bandwidth can help fulfill the promise of a network approach.”
Technology’s Role in Enhancing the RFP Process
A new and highly promising application for network-based solutions is being driven by some innovative thinking at Trimble. It reflects a vision that not only connects carriers and shippers on one platform for tendering, tracking and tracing loads but perhaps more importantly employs strategic procurement processes that consistently lead to greater success than traditional RFP solutions.
“Our Strategic Procurement Partnership approach is about leveraging technology to help carriers and shippers create a long-term, deeper engagement based on shipper goals and carrier capabilities,” said Pete Coumounduros, general manager of Trimble’s Transportation Sourcing Group. “It develops a roadmap for more strategic current and potential partnerships. It’s more holistic and granular at the same time because it sets longer-term goals which are broken into smaller achievable steps with success measures to achieve along the way.”
Carriers and shippers participating in the Kuebix Strategic Procurement Partnership program begin by identifying the current status of their transportation sourcing practices, including areas of strength and weakness in processes and people. They also address how sourcing and procurement are tied to their overall corporate strategy, including key objectives.
Strategic Procurement Partnership is an engagement road map but not a technology roadmap,” Coumounduros advised. “It’s a strategy that defines the scope of engagement, phases and success measures over an actionable timeline that runs in parallel with leveraging platform technology for deeper engagement and executing results.”
As an example, Coumounduros pointed to one of the most common underplayed analyses among partners using the new process. “A carrier is looking to fill an empty leg in a new lane with revenue-generating freight,” he related. “With Strategic Procurement Partnership they can define legs and learn about shippers who have capacity needs that overlap the lanes they need to fill. The reverse is also true. Shippers with freight can find carriers with matching capacity.”
Through this connection, partners can also employ enhanced rating processes. For example, a shipper has the ability to rate a load and the system can automatically execute a transaction using a real-time rate that guarantees the price.
Industry at a Critical Juncture
“Contracted rates are too often misaligned with the current market,” Coumounduros said. “In a business where every minute counts, a network-based, real-time integration between carriers, brokers and shippers addresses capacity needs and automates and expedites the entire process.
“By curating the capabilities of carriers and the needs of shippers, Strategic Procurement Partnership creates long-term relationships,” Coumounduros added. “It brings together stakeholders who can bank on stability and share cost and time savings so they can focus on their core businesses.”
The industry is at a critical juncture today because transportation service companies and shippers need a better approach to matching capacity with demand, Coumounduros stated. Along with rising and falling capacity levels and changing freight volumes, there are inefficiencies driven by detention time and empty miles, and economic drivers such as e-commerce growth. There are also ongoing driver shortages and challenging Hours of Service issues.
Behind the scenes, Coumounduros added, a generational shift is having an impact as well. That shift places--in decision-making positions--younger, more tech-savvy people who want and expect technology that is user-friendly and intuitive. Another big change accelerating over the past few years is that logistics and transportation, which were traditionally viewed only as cost centers, are now seen as part of a company’s core competency and an advantage.
“Cost is still part of the equation but logistics and transportation are now seen more often as strategic, competitive differentiators,” Coumounduros said. “As a result, companies competing for a better customer experience are now leveraging network-based platforms and other digital technologies.”
Connecting for Success
At the heart of network-based TMS platforms is the ability for all parties to enable more intelligent, automated transactions. Designed for that exact purpose is Kuebix Community Load Match, which connects shippers with a rapidly growing carrier community from Trimble’s network of 1.3 million commercial trucks, digital freight matching services and brokers on one platform.
A case in point is the measurable success that has been realized by Challenger, one of Canada’s largest, privately owned transportation and logistics companies. Headquartered in Cambridge, Ontario, the company offers a full range of transportation, warehouse and distribution services throughout North America. For Challenger, the dynamic nature of freight made it difficult to identify target lanes, find new customers and meet their detailed requirements. The company’s objective was to leverage technology to reduce deadhead miles by forming partnerships with shippers.
While already using management solutions from Trimble Transportation, Challenger began using Kuebix technology as well in February 2020. By becoming a Community carrier, Challenger quickly connected with shippers whose capacity needs matched their asset utilization and operational requirements.
In addition to finding opportunities available in Community Load Match, the Transportation Sourcing Group Group (TSG) also learned about Challenger’s strengths, core competencies and demographics and leveraged the platform to help facilitate direct connections with shippers whose goals aligned with the carrier’s.
“Shippers in Community Load Match are able to match their needs with what we offer, creating an entry point for us,” said James Brewer, sales logistics executive at Challenger. “Those conversations turned into Challenger becoming the dedicated carrier on lanes and getting consistent volume. From there, we’ve been able to provide solutions that evolve into long-term partnerships.”
Improve Your RFP Process with Trimble Technology
Interested in learning more about how technologies such as Community Load Match can help improve the efficiency of your procurement processes?
Catch a replay of a recent webinar to discover how Community Load Match is enabling increased utilization and enhanced freight coverage - making the supply chain more collaborative and connected for everyone.