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American Shipper

Special Coverage: The social network supply chain

A select group of TMS providers are enabling in-system messaging among partner ecosystems.

   Companies pushing for the advancement of automation in logistics and freight transportation have long used three somewhat dated forms of technology as punching bags: spreadsheets, telephone and email.
   Software firms and technology-oriented logistics services providers have posited the theory that using those three forms of technology leads to wastefulness, redundancy, and inaccuracy when it comes to coordinating the movement of cargo. They emphasize that Microsoft Excel, phone calls, and email simply aren’t compatible with the hyperspeed needs of modern supply chains, much less the amount of data that both shippers and carriers now need to synthesize.
   American Shipper’s own series of benchmark research studies has long characterized companies that predominantly use those three methods of communication as “manual,” as opposed to “systems-based.”
   According to a 2016 study on transportation management software usage, 56 percent of companies using a system said they saw a year-over-year transportation spend reduction of 5 percent or more, and another 25 percent saw reductions of 2 percent to 5 percent. At a minimum, it’s clear that companies using a systems-based approach create cost cutting opportunities.
   As a result, the old question of “should I move my company’s processes from spreadsheets and email to a more automated system?” has quickly evolved to “which system do I choose if I have the budget to invest?”

Collaborative Communication. For the most part, solutions like transportation management, visibility, and procurement systems eliminate this reliance on spreadsheets for companies that use them effectively.
   But the communication aspect of freight management remains heavily reliant on emails and phone calls. A shipper’s domestic transportation department emails a freight broker to see if capacity is available for an ad hoc load. A shipper calls a carrier to change the order of stops on a multi-party load. A shipper calls or sends a text message to a receiving facility to tell them a carrier is delayed.
   And on the international transportation management side, phone and email communication between parties is even more pervasive.
   Could that be about to change?
   There’s evidence to suggest transportation management tools are beginning to accommodate the communicatory aspects of personal technology. In other words, messaging formats that people are accustomed to in their private lives, like Facebook, Twittter, or instant messaging platforms like WhatsApp, are starting to pop up in places where email and phone calls used to be the norm.
   A new subset of transportation management systems (TMS) now include some aspect of in-system messaging features with the goal of creating a vehicle for more truly collaborative communication between the primary user of a TMS and its related parties. So instead of long email chains with dozens of people copied in, systems now incorporate real-time messaging functions.
   The primary purpose of this is two-fold: to eliminate inefficient emails and phone calls and enable more rapid decision-making.
   Transportation management solutions provider Cloud Logistics, for instance, has a feature embedded within its system called the Logistics Activity Stream.
   “So much of the collaboration between shippers and carriers occurs offline,” said David Landau, executive vice president of Cloud Logistics. “And it’s not just email, but phone calls.”
   Founded in 2011 by Mark Nix, Cloud Logistics was designed to maximize the power of pure browser-oriented, subscription-based TMS tools in an era of social network ubiquity. Instead of adapting an existing system to the new realities of this world, the Cloud Logistics system, as well as those of other recent entrants in the TMS technology space, is built from the foundation of networks and the communication patterns inherent in them.
   According to Landau, the Logistics Activity Stream enables faster decision-making and greater visibility to all parties as to the reasoning behind a decision. It also allows for more intuitive historical reporting, such as when a user wants to see how frequently something happened, or when and why an invoice was disputed.
   Landau also noted that such a system makes it easier to introduce a shipper’s processes and people to new carriers. That’s because social communication facilitates a dialogue within the system that more closely resembles a phone discussion, but with the ability to record those events digitally like in an email.

Automated Messaging. This embedded communication capability manifests itself at a couple key points in the shipment management cycle, said Matt Tillman, chief executive officer and co-founder of Haven, an international logistics platform provider for shippers.
   A core feature of Haven’s TMS, which the company unveiled in April, is a collaborative messaging layer.
   “It’s a messaging feature pre-shipment, and the remaining features, like booking, are automated between customer and carriers via the usual EDI (electronic data interchange) or web service APIs (application programming interfaces),” Tillman said. “The real trick is not getting the integrations, it’s adding the right amount of context to the conversation automatically. For example, you ask Google to find web pages that match your intent. It uses the information about you to guide the results. Instead of a webpage, it’s capacity and booking and other things in our world, and instead of information about the user, it’s about the shipment, like the product and type.”
   The second point is where Haven provides tools on its platform so that, as Tillman put it, “users don’t spend time emailing documents to one another and instead share them via the Haven TMS. It’s about replacing the need for the emails using data and not just the human-centric functionality of messaging.”
   Weaning people off of performing transportation management by spreadsheet eliminates a certain amount of emails and phone calls in and of itself. For instance, instead of receiving an email or text confirmation that a container has been loaded aboard a vessel at origin, or that a load has been tendered to a truckload carrier, those confirmations should theoretically occur within the TMS workflow.
   That’s one level of email and phone communication eliminated. But the second level is tied to the changes inherent in any supply chain.
   Shipments don’t always go to plan, and the idea of layering social media-type communication directly into a TMS allows carriers, shippers and LSPs to resolve issues within the system itself, rather than through outside, unconnected channels of communication.
   Landau cited an example of how Cloud Logistics’ embedded communication tool allowed a shipper and carrier to instantly communicate about a load that was 3,000 pounds overweight on its front axle due to improper loading of the truck. The shipper requested the weight ticket from the carrier, which the driver provided via a smartphone photo of the ticket.
   The entire situation was recognized, recorded, and verified in the timeframe and manner similar to that of two people texting each other about a parking ticket that one of them received.
   Bart De Muynck, transportation technology research director at IT analyst Gartner, said that among domestic TMS providers, he’s really only seen Cloud Logistics incorporate such a tool into its platform.
   “I don’t think it is the technology per se, but rather the process, in that no one focuses on communication because they don’t understand the value,” he said. “[Cloud Logistics] did see that value, and that is why they added it to their solution, because most of their carriers interact with the system, rather than have EDI or API connections. Not every carrier interacts with the TMS, so you need to look at the carrier landscape.”

Exception Resolution. To be clear, the type of communication these tools foster is not about bringing things like demand signals from social media into the transportation planning and execution process. That’s a much more difficult and multifaceted problem to tackle. This is about bringing social network-type communication formats to parties that typically speak to each by traditional means.
   Adrian Gonzalez, a veteran supply chain consultant and founder of Adelante SCM, has regularly delved into the topic of social media’s impact on logistics. Gonzalez refers often to an ongoing shift toward what he calls “supply chain operating networks,” essentially the internal business equivalents of Facebook and LinkedIn.
   In an essay Gonzalez penned in 2013 called “The Social Side of Supply Chain Management,” he pointed out how this more immediate form of inter-party communication might impact the way in which exceptions are handled.
   “Exceptions are the norm in supply chain management (delayed shipments, supply shortages, unexpected demand spikes, and so on),” he wrote. “Social networking can help companies identify and resolve exceptions faster and more effectively, especially because responding to exceptions often requires collaboration and communication between many different people, and existing approaches (back-and-forth emails, endless conference calls) are inefficient.”
   Solutions like those provided by Cloud Logistics and Haven are at the forefront of in-system communication as real-time collaboration tools, but they’re not the only ones. Take, for instance, the logistics startup Turvo, which came out of stealth mode (a Silicon Valley term for an official public launch) in March and announced it had received $25 million in funding from a cadre of venture capital firms.
   Turvo’s aim is to empower freight brokers with a better, more modern, more relevant system in a cloud-based and mobile world. For Turvo—much like Haven—the platform itself is the collaboration enabler, providing the LSP a chance to coordinate shipments in a more effective way.
   As CEO Eric Gilmore put it to American Shipper, “We do things that a TMS does, but would you call Salesforce a contact management solution? We have to do enough TMS stuff to check the box, but it’s a misnomer if you describe it that way. It’s a bunch of horizontal stuff way beyond that.”
   Gilmore said the ultimate goal is to create an ecosystem that lets 3PLs compete by not pinning them down.
   “We’re mode-agnostic,” he said. “Camel, train, anything. It’s an asset type. A load is a shipment that has a requirement around where it needs to go. It’s about how you design the system.”
   The platform also has an embedded “instant messaging” capability that empowers better procurement, payment and visibility, the company said. That enables document uploads and sharing for rate confirmations, receipts, invoices and more. With everyone on the same platform, delivery confirmations and invoices can be shared instantly, instead of by phone or email, meaning carriers can get paid more quickly.

Tailor-Made Solution. Going forward, as De Muynck pointed out, the key to adoption of these tools will be in how carriers interact with a shipper’s system. Just as shippers don’t want to interact with dozens of carrier track-and-trace systems to find the status of their goods, carriers won’t want to instant message individually with each customer on a different platform, at least not initially.
   If those real-time conversations turn out to be more efficient and cost-effective for all parties, then new in-system communication features could start to creep into other established transportation management solutions. For now, EDI and APIs are still seen as the primary method of communication for established shipment processes, with an email or phone call needed to resolve any exceptions.
   But it seems that an ideal situation would be to have system-to-system communication handled via APIs, with in-system messaging handling exceptions in lieu of emails and phone calls.
   The analog here would be Slack, an instant messaging platform designed to help businesses reduce the number of intra-enterprise emails and phone calls that typically take place when a simple text message will suffice. In Slack, channels can be created for all parties in an organization to see, a smaller subset or team, or even directly between two individuals.
   That sort of scenario seems tailor-made for logistics, where multiple parties need to coordinate around a single process, but where access to information at times needs to be restricted to certain parties.
   Social networking is already all around us in our private lives and, in many industries, our professional lives as well. It will be interesting to see if that same type of communication pattern eventually becomes just as pervasive in logistics.

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