The freight market is a lot like a pendulum, as FreightWaves CEO Craig Fuller described it last month. Just wait, and the market will eventually swing — be it for better or worse.
Loose market conditions over recent months have tested carriers’ resolve as greater capacity has given shippers more pricing power. During these conditions, contracts are especially important for carriers to ensure consistent freight and cash flow.
“The best, most agile companies can negotiate lucrative contracts with shippers that ensure that they are constantly moving something,” said Frank Kenney, director of market strategy at Cleo.
A logistics company’s technology infrastructure is important to this negotiation. Technology is vital to how efficiently it can move through business processes, tailor services and respond to and resolve issues.
Having a nimble and robust infrastructure better positions companies to attract and keep customers, allowing them to embrace elasticity during times of economic contraction while riding the wave of opportunity when conditions turn more favorable.
Building strong infrastructure
According to Kenney, former analyst and “market evangelist,” there are a few core components critical to any company’s efficiency and market durability:
- Process automation: “Brings consistency, dependability and predictability to all critical processes, such as low tender acceptance and rejection, status updates and invoicing.”
- Exception management: “Keeps automation in the process but allows for additional value-add opportunities or risk-mitigation efforts on exceptions to established processes.”
- Issue identification and resolution: “The reality is, issues happen to every single company on the planet. How fast those issues can be identified and resolved separates the strong from the not so strong. It’s not that the problem happened. It’s how fast the problem was fixed.”
Integration platforms foster an environment for all three of these ingredients to come together, making them a significant resource for companies to build out their infrastructure. They are powerful tools to mold and connect the moving parts of a company’s technology ecosystem for its onboarding, automating, governance and operation efficiency needs.
With integration platforms, users sit in the command center over their mission-critical operations — including day-to-day processes and data intelligence. They are able to shape how their enterprise systems, services and applications interact with each other and how they interact with trading partners’ technologies.
Breaking this down further, Kenney points out the two types of integration platforms: internal and external.
An internal integration platform allows a company to keep data synchronized across its critical technologies, like its TMS, enterprise resource planning system and analytics technology.
“These companies don’t focus on the complexities of collaboration with an external partner who has their own governance, security and control infrastructure and systems,” Kenney said. “Negotiating that is a delicate but critical part of a [business to business] relationship.”
The logistics industry is driven by B2B partnerships, whether with customers, carriers or suppliers. Any single company interacts with numerous trading partners on a daily basis. This means most companies require external integrations, more complex interactions than what internal integration platforms offer.
These external technology integration platforms are focused on B2B, but these don’t provide the level of oversight some companies seek.
“Quite frequently, the only firms that offer this are managed services that will take your documents and put them through their engine, processes and governance mechanisms,” Kenney said. “These three systems are hidden from the user and thus jeopardize visibility, control and issue-resolution efforts.”
Cleo Integration Cloud (CIC) is a blend of both internal and external integration system types, providing users with a self-service platform to connect their internal ecosystem of back office and cloud-based enterprise systems with trading partners through its any-to-any transformation engine.
“What if one [system] could handle the internal data, the synchronization needs, [application programming interface] beast integration needs and the ability to handle complex B2B collaboration?” Kenney asked. “That is the world that Cleo lives in, a blend of self and managed services and the capability to do internal and external process integration.”
Cleo serves 4,000 customers worldwide, with more than 500 representing industry-leading transportation and logistics providers. These customers use CIC to unify the necessary B2B integration capabilities, including data orchestration, API integration, electronic data interchange integration, visibility, governance and more.