Off-the-shelf, beyond the border

Off-the-shelf, beyond the border       Recent news that CI Capital Partners has acquired non-asset-based logistics provider Transplace speaks volumes about the third-party logistics provider's approach to blending mostly homegrown, proprietary technology with hands-on services to manage domestic supply chains for marquee shipper names like Pep Boys, Home Depot and AutoZone.
      The investment in Transplace is further validation of the company's relatively recent expansion into international logistics services. In an interview with American Shipper, executives close to the deal went as far as to say that the cash influx will support an acquisition strategy with an eye towards growth in international services (see 'CEO: Transplace sale sets stage for acquisition strategy,' at www.AmericanShipper.com/links).
      However, Transplace International, the division at the vanguard of that growth initiative, has an approach to technology that is considerably different than that of its parent company. This illustrates the drastic differences between managing domestic and international supply chains. Unlike Transplace's mainstay domestic business, the technology that runs Transplace International is all purchased or licensed. There is no homegrown technology involved outside of the integration between applications.
      Leveraging established logistics platforms will position the company to successfully integrate acquisitions, quickly bring services to market, develop new customers, and expand the service offerings for existing accounts.

Higgins

      'Transplace International was conceived in early 2006 to expand strategic value Transplace brings to marquee accounts,' said Kevin Higgins, vice president of international services at Transplace. 'Today, International is a small but rapidly growing part of Transplace.'
      Higgins said Transplace International grew 205 percent through the end of November 2009 on a year-over-year basis. Transplace Inc. as a whole grew at a double-digit pace over that same period.
      Transplace International has some foreign-origin-to-foreign-destination capabilities but they are not a global service provider. Keeping with the division's original charter, Transplace International provides mainly U.S. inbound and outbound services to customers who leverage the company's considerable domestic capabilities.
      'Our focus is to continue to grow our U.S. inbound and outbound capabilities,' Higgins said. 'We're seeing growth in new customer acquisitions of Asia-based imports and growth on the export side.'
      Transplace International's systems link to the company's domestic systems providing customers with continuity between the divisions. 'If an order starts in Asia we can move that data through to the domestic systems when the shipment arrives in the U.S.,' Higgins said.
      Company executives pointed to a collection of New Jersey-based software providers, including IES, LOG-NET and Management Dynamics (MDI), as key providers of the technologies that underpin Transplace's international logistics operations.
      'IES is the system that we use to manage our NVO (non-vessel-operating common carrier) and freight forwarding business,' said Kirk Lacewell, general manager of international operations at Transplace. 'It provides us the tools to manage shipments from booking to final delivery including all of the necessary financials such as accounts payable and accounts receivable.'
      'We use IES for denied party screening which is critical to the export business. We also file importer security filings through IES,' Higgins added.
      'IES provides EDI (electronic data interchange) interfaces for Transplace for visibility and shipment processing,' said Jason Kohler, vice president of sales at IES.    'Our compliance tools ensure that their customer's shipments are handled correctly. Our workflow and event-driven exception management interface provide Transplace management with a solid technology foundation that they can grow their business on.'
      'We leverage IES as our operations system and tie that into LOG-NET for purchase order management and visibility,' Higgins said.
      In addition, LOG-NET provides vendor management, exception management, and visibility from order/item creation to final consumption. Combined with IES, this enables Transplace International to handle its customers operational and order management needs.
      'Management Dynamics fulfills our tariff-filing requirements with the FMC (Federal Maritime Commission),' Lacewell said. 'It also provides us ocean contract management in order to effectively manage our buy and sell rates.'
      Transplace International accesses these technologies in a variety of methods based on the nature of the functions involved. Systems provided by IES run on an internal Transplace server while both LOG-NET and Management Dynamics are delivered as on-demand, Web-based systems. This mix of delivery models allows the company to keep information that does not need to be shared inside the firewall and simultaneously tap into logistics communities for connectivity and shared intelligence.
      'Our approach to technology is to provide our internal staff the tools necessary to manage each shipment effectively and provide our customers with state-of-the-art technology that allows them full visibility to their shipments based upon their internal needs,' Lacewell said. 'We manage this on a case-by-case determination of each system.'
      Like any savvy software buyer Transplace International is not married to its current preference to buy technology rather than build it in-house as the domestic division had done in the past. 'Our strategy has been to buy best-of-breed technology and package that into solutions that our customers need,' Higgins said.
      Transplace International's growth strategy will test the merits of its IT strategy. In 2007, the company added U.S./Mexico services to its footprint and has designs on expanding its presence in that market to mirror offerings in the United States.
      'We recently announced a 2010 launch of air and ocean services in and out of Mexico. In the next couple years we see our focus expanding to North America inbound and outbound,' Higgins said.
      The Mexico market comes with new challenges, but according to Higgins, scaling the company's technology to manage the new service was not an issue. 'We were able to leverage the technology we're getting from LOG-NET, IES and MDI to manage the Mexico activities,' he said.