A missed opportunity? Collaboration is the key to cost and other savings

Stacks of shipping containers at a major port

Partnering with the right third-party logistics provider (3PL) allows access to a far-reaching carrier network, expansive capacity and a full spectrum of tools and resources. 

This scenario occurs countless times daily – shipper A in Boston has a Los Angeles-bound, 14,000-pound load. Shipper B is eight miles away and has an 8,000-pound load going to Ontario, California – 40 miles from Los Angeles. If one or both shippers aren’t in a transportation network, they would have no knowledge of the other’s freight. Without that awareness, the shippers would pay separately and each truck would travel well under capacity, which is financially and environmentally irresponsible.

“Many shippers use a transportation management system (TMS) to create efficiency and visibility within their operations,” explained Frank McGuigan, CEO of Transplace. “However, they may still have a suboptimal network if the system isn’t integrated with a logistics platform that has significant shipper and carrier scale. The opportunity to plug into a platform that provides network wide data insights, shipment visibility, and the opportunity to create efficiencies with a larger community of shippers and carriers creates next level network performance for shippers.” 

Around 12% to 20% of all driven miles aren’t earning revenue, meaning carriers are watching expenses increase, while shippers don’t have the visibility to capitalize on the consolidation and backhaul opportunities. 

A 2017 Logistics Management survey revealed that 65% of shippers don’t use a TMS at all, meaning they’re still relying on spreadsheets, emails and phone calls. Research from the U.S. Department of Transportation in 2017 revealed that 91% of all carriers operate six or fewer trucks, and 31% of that majority don’t use a laptop or computer in their offices.

“Many companies see [partnering with a 3PL] as a cost exercise trying to reduce headcount and staffing levels, but we actually see that with more technology, the less busywork a person will have, which opens capacity for that person to think,” said Alex Obelink, director of Transportation Services at BASF, the second-largest chemical producer in the world. “A well-trained transportation planner with the right tools and time to think will improve service and identity opportunities for savings.”

The power of a 3PL partnership 

Logistics providers understand that shippers want to save costs, improve service and increase access to high-quality carrier capacity. They also know that driving deadhead miles creates idle time for drivers, fuel waste and unnecessary carbon emissions. 

Partnering with the right 3PL allows access to a far-reaching carrier network, expansive capacity and a full spectrum of tools and resources. For example, Transplace has one of the largest networks in the industry – $9 billion of freight under management, over 1,000 shippers as customers and 30,000 carriers under contract. The Transplace TMS includes graphical dashboards for reporting, analysis and remarkable clarity into North America’s largest transportation network. This intelligence allows shippers to work collaboratively to meet specified performance metrics and business objectives.

In January, Transplace announced its acquisition of Lanehub, a cloud-based collaborative transportation network that enables shippers or carriers to match recurring freight lanes on a consistent basis to jointly source capacity or better utilize private or dedicated fleets. The acquisition creates opportunities to connect and convert traditional one-way moves into more collaborative round trips, significantly reducing empty miles and poor asset utilization.

Optimizing networks by creating communities and collaborations

Powered by artificial intelligence and machine learning, the Transplace TMS instantly identifies millions of potential pairing to tender loads in pairs as continuous moves versus a single load. Those pairings are then narrowed down based on key parameters, including rate, equipment type, number of empty miles, and other service and equipment requirements. Transplace’s Dynamic Continuous Moves solution locks in capacity at competitive rates while driving empty miles and operational inefficiencies out of the supply chain. 

Because the community of shippers and carriers are continuously improving their freight network by building long-term relationships with strategic partners, they are regularly driving inefficiencies out of their network.

Transplace customers participating in its continuous moves program have already experienced millions in tangible savings over tens of thousands of shipments just in the last six months. 

Obelink further underscored the value of collaborations with a 3PL partner. “I’m a firm believer in a partnership. We shippers should not assume that our partner can be successful without us having our house in order – our processes, our master data, our vision. The better we have that in order, the more successful companies like Transplace will be in delivering savings. If you treat a vendor as a transaction, the vendor is going to treat you the same way. If you treat the vendor as a partner, the positive value that you will extract is greater than any pennies you will be saving from a few transactions.”

“We have tools for people at different levels of technological maturity and integration,” said Ben Cubitt, senior vice president of Transplace Network Services. “If it’s A-Z, we have people who take part in A-D and others in A-K and some in J-F. We can scale it to the size of the [shipper], both in cost and complexity. We don’t tell them they have to do these 20 things, but rather ask them which of the 20 things bring value, which parts fill gaps in your system or network.”

Cubitt continued, “In order for shippers to take advantage of the economies of scale requires three things: a large network; technology and process; and shippers that are trusting and open to collaboration. We’ve seen a sea change in shippers’ attitudes – they are much more open to collaboration and willing to buy in.”

In addition to technology advancements, the logistics and supply chain experts at Transplace help members of the network benchmark against market indices and industry peers, as well as gain access to proprietary analysis. Even shippers and carriers that don’t fully integrate into the Transplace TMS can use a web-based portal to upload spreadsheets. Transplace matches those needs, too, in order to enhance supply-chain visibility for all shippers.

“We see our logistics platform as an enabler for visibility, transparency and efficiency across the networks of shippers,” said McGuigan. “Platforms that are truly multi-shipper networks deliver optimized shipping solutions over a significantly larger network than an individual shipper has available. Over the next several years, the industry will see investments in AI-enabled optimization to handle the processing demands of these large data sets in real time.”

By joining a transportation platform and partnering with a 3PL, shippers and carriers will better ensure that they’re not missing out on opportunities to optimize their networks.