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Technology Enables You to Be Positively Different
As a transportation management software company, we see shippers and 3PL’s urgently differentiating themselves because their respective markets are so crowded. Overall, companies prefer to attract customers by providing unique brand-driven customer experiences and services rather than compete on price. Strategic and practical use of the right technologies enables sharp pricing competitiveness, better customer experiences, reduces expenses and raises productivity.
What we are seeing in online retailing is an example. A few years ago, “shipping and handling” was a known profit center for online retailers—consumers bought product and paid to have it delivered. “Free shipping” was uncommon and typically offered by a handful of online retailers only during the holiday season. Times have changed with about 75% of the largest online retailers offered free shipping during the past holiday season. And, many retailers such as L.L. Bean and Target are now offering free shipping throughout the year, no restrictions.
Supply chain technologies enable such differentiations. In our example of online retailing, the logistics technologies have to dovetail into the entire supply chain structure, as online retailers must now specifically understand and manage transportation costs and quality level of carriers to be able to offer their customers transportation-based incentives.
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Taking the Complexity Out of LTL Shipping
Adrian Gonzalez of Logistics Viewpoints posted a column and podcast discussing “Taking the Complexity Out of LTL Shipping.”
During the podcast, Adrian interviewed Steve Pandolfo, director of pricing for Sunset Transportation, who talked about the challenges of working within the LTL space, and how technology influences the management of his function.
He offers the following example:
LTL is pretty confusing to break down and try to rate because of all the different [factors] that go into getting that final [rate]. Every carrier has what is called a rules tariff and those are how they break down the fees that [they] charge to shippers for things like notifying the consignee before [the shipment] delivers, if you have a lift gate, if the driver has to go inside somewhere and break the freight down…[and] it’s important for shippers to know that all these charges are different for every carrier, it’s not a [common] charge across the board, and those charges are increased, generally, on a year-by-year basis, so the [fee] you were charged in December could be completely different in January.
To read the column and listen to the podcast, please click here.
Thank you for reading and, as always, feel free to contact us at sales@transite.com if you have any questions.
Better Customer Experience
Higher reliability and faster. With a network, there is higher latency and you are subject to network disruptions that you cannot control while your interfaces look like a true customer site that represents your hard-earned brand, and not a re-skinned UI of a third-party provider. The customer service and interaction you provide to your customers isn’t dependent on the third-party’s quality and reliability. Your are not dependent on the customer support service you get from your SaaS provider.
Tighter Integration Model
Data is easily stored in a data warehouse for reporting, and doesn’t have to be accessed to a 3rd party company which can add slowness and reduce quality. Installed solutions fit in easily with ERPs and across the supply chain along with disaster recovery systems. Integrations with a SaaS TMS are well-known to be very expensive. This stems from the need to navigate restrictions by the vendor on access to the application, data, and communications limitations. Generally, a premise-based system costs much less to integrate with internal applications as well as customer applications & processes. For a logistics provider, this is critical.
You Control Your Data
The data is your’s forever and you have full access to the data. A fundamental disadvantage to a SaaS solution is you don’t have access to the database where your data is stored. This prevents other applications from interactively using this data, creating reports based on all the data, and even simply extending the database to meet your specific needs. You and your customers have a high sense of security: you have total control and privacy of the data with no need to disclose proprietary information to a third party. .
The Flexibility to Control Your Destiny
Your technology adapts to your business. As companies change and grow, sometimes technologies cannot scale to meet growing customer demands or don’t have the flexibility to help companies grow into new lines of business. SaaS services are therefore viewed as “tools” while purchase/install technologies have the ability to be more strategic weapons as they can drive market differentiation and business process improvements.
We're off to a great start and based on our pipeline, it's evident that companies will continue to invest in transportation management software to reduce costs, improve efficiency, and help run their overall freight management functions more effectively.
I think it's important for software buyers to remember that companies can either purchase and install their TMS solution or obtain the functionality through the software as a service model—and, if they are a shipper, they can simply choose to outsource the whole thing to a third-party logistics provider.
SaaS TMS offerings have been advertised as inexpensive, quick to install, uncomplicated with no expensive hardware purchases, and few development costs.
But, in spite of the positive market reception around the on-demand (SaaS) model, we need to remind ourselves that there are sound business reasons to recognize when purchase-install makes the most sense.
In the coming posts, we'll write about the five top reasons companies should consider a purchase/install solution instead of a SaaS model.
So, keep visiting our site and join tour discusson. As always, feel free to contact us directly and we'll be happy to help you!
The Importance of Flexibility in TMS
11-28-2011
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Hi,
This past week, we participated in an interview session with Adrian Gonzalez of Logistics Viewpoints. He was asking about the business value of “Flexibility” as related to TMS technology. As part of the podcast, he also interviewed Kyle Krug, director of client solutions for TMSi, a leading national 3PL and a customer of Transite’s.
The interview was well-conducted, with Adrian drawing key points from the participants. His interest and expertise regarding this issue is seen in numerous past columns.
One point that was called out in Adrian’s column was a comment from Kyle, who lead the TMS selection process for his company.
“The first thing we learned from experience is that TMS from a shipper’s standpoint and TMS from a 3PL’s standpoint are very different,” he said. “So, if you are a 3PL looking for a TMS you really need to make sure the [solution] is able to service the extra layers of needs [you have as a 3PL]…That seems kind of a simple thing, but it’s really not, there’s a lot to it, so I would really make sure you take that angle.”
To read the column and listen to the podcast, please click here.
Thank you for reading and, as always, feel free to contact us at sales@transite.com if you have any questions.
But for all of our readers, please know we like being part of the industry conversation and always welcome your questions and comments.
Just so you know, here’s our comment to the question:
There are many TMS solutions on the market, each with strengths and weaknesses. However, the uniqueness of LTL actually provides clarity and priorities in looking at offerings. For example, the complexity of LTL pricing with detailed variables--accessorials, lane profitability/route management, and customer service delivery requirements, etc.—places a premium on the contract and pricing management capability of a TMS.
In LTL, “the devil is in the details” and contract management and pricing enables a LTL carrier to put forth competitive pricing while protecting margin and profitability. This, combined with multiple operational system requirements (route management, asset management, driver management, etc.) as well as customer facing technology such as a single carrier or a multi-carrier TMS, and it becomes readily apparent that the solution is really a combination of solutions.
Without taking up too much space or your time, please know there are many other important points that are examined regarding an LTL TMS selection. If you want to discuss by phone or via email, please contact me. And, I’ll also be happy to talk about how the requirements for what makes a great TMS for a shipper versus a carrier (or 3PL) can be very different.
Transite sees that TMS’s are a hot topic right now, and the response rate can be attributed to more people recognizing that TMS capabilities span beyond functionality. Transportation Management Systems are strategic tools that can be used to foster the growth of your businesses. An improving economy coupled with rising fuel prices are contributing to the interest in TMS’s.
We hope everyone who downloads the white paper finds it useful in determining the status of their current TMS and future transportation needs.
3PL Summit in Atlanta
07-05-2011
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Nothing Like In Person
05-26-2011
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Trade Shows Make Us Better
04-15-2011
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We’re just getting ready to go to NASSTRAC in Orlando after returning from TIA’s Annual Conference last week. As a company, we have to be pretty careful about what shows we attend and exhibit. They cost money and, for our show staff, it’s time away from the office and from home. But, we learn so much by being present at these industry events.
Employees, People and Perspective
04-04-2011
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Last week, two of our employees, Gary and Pete, were travelling on business and were in an accident at highway speed. Aside from some soreness and minor scrapes, all involved were spared injury and they even made it to the customer meeting later that afternoon.
Listening to Customers
02-23-2011
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In today’s transportation management systems (TMS) market, companies continue to invest in transportation management software to reduce costs, improve efficiency, and help run their overall freight management functions more effectively.
Companies can either purchase and install their TMS solution or obtain the functionality through the software as a service model—and, if they are a shipper, they can simply choose to outsource the whole thing to a third-party logistics provider.
But, in spite of the positive market reception around the on-demand (SaaS) model, does it make ultimate sense for everyone?
Please check our website for the posting of this new paper.
Vested Outsourcing
01-03-2011
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To learn more about the book click here.
Some companies sit on the sidelines while their competitors are revamping the fundamentals of their businesses. What will you be doing two years from now?
DC Velocity’s Technology Review on TMS
08-23-2010
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I know we’re biased because we’re in the Transportation Management business, but a large number of shippers and 3PLs still do not recognize the overall business value of having a robust TMS.
Freedom of Choice—the LTL Rating Alternative
07-13-2010
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Earlier this week, we introduced our Continental Suite of Less-Than-Truckload Rating Tools joining SMC3 and Middlewest Motor Freight Bureau as one of only three companies to offer commercial or off-the-shelf LTL rating products in the U.S.
Over the past months, we did a lot of research with shippers, brokers and carriers—customers, prospects and industry friends. Overall, they confirmed that there was clearly a place for a cost-effective and proven option for LTL rate services.
While we deeply respect those already in the market, we feel we have an exciting opportunity here.
We can afford to be affordable. We already make our money on transportation management solutions and we already have these products to support the core business. So, these sophisticated LTL products are already developed and being used on a daily basis by our customers throughout the transportation management markets, therefore we can offer proven-to-work products quickly and relatively inexpensively.
At Transite, we simply want to offer a sensible, high quality, low-cost alternative to the current big players.
We’ll keep you posted.
Modern TMS systems are far more flexible and open. You should be able to add components as you need them to tailor the system to the unique needs of your business– either through your own development or third-party “bolt on” components.
3PLs have great insight into this concept.
Over the past half year, we’ve gained a number of 3PL customers who were looking for transportation management technology that would enable them meet the needs of their growing business. In a crowded 3PL market, they want to create market differentiation by delivering new technology offerings to their end customers that help facilitate their end-customer’s growth and success.
By competing on something other than “price” and help create more client loyalty by becoming more of a strategic partner instead of a simple vendor, they are able to maintain margins, while reducing customer churn. Concurrently, they want to strengthen their own business processes so they are well-positioned as the economy strengthens.
One common theme in working with these customers is hearing how their business vision was limited by the capabilities of their old TMS technology. One analogy is that it’s like having restrictor plates on a NASCAR racer. You want to go fast but technology is an inhibitor.
We think this new breed of open, flexible technology removes such restrictions. Technology enables, not disables.
Email or call me if you want to discuss: geoff.comrie@transite.com
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