• ITVI.USA
    15,462.460
    -34.260
    -0.2%
  • OTLT.USA
    2.752
    0.009
    0.3%
  • OTRI.USA
    20.670
    -0.440
    -2.1%
  • OTVI.USA
    15,437.200
    -29.190
    -0.2%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
  • ITVI.USA
    15,462.460
    -34.260
    -0.2%
  • OTLT.USA
    2.752
    0.009
    0.3%
  • OTRI.USA
    20.670
    -0.440
    -2.1%
  • OTVI.USA
    15,437.200
    -29.190
    -0.2%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
American ShipperIntermodalWarehouse

TMS pioneer Weseley out to reduce ROI skepticism from shippers

Founder of G-Log now leads TMS provider 3Gtms, which is offering a program that allows shippers to reduce transportation spend with no upfront cost.

Weseley

   It might be an overstatement to call Mitch Weseley a forefather of the transportation management system industry.
   But Weseley is rightly called a pioneer in the TMS world, where he has been intricately involved in building systems for going on three decades.
   Weseley came to prominence in 1980s with the development of his eponymous software company and a product that Weseley calls the first generation of TMS. He then was on the leading edge of the second generation with the formation of G-Log, a major TMS provider that was purchased by Oracle and is now the backbone of its Oracle Transportation Management platform.
   Now Weseley is attempting to make waves again, this time with a TMS that is purposely scaled back from the large scale optimization model on which G-Log and other major TMS platforms are built. His new venture, 3Gtms, last week announced that it was going to try to entice companies – shippers, 3PLs and brokers – that for whatever reason had failed to use a TMS, that the benefits of doing so are real.
   3Gtms will offer its solution at no upfront cost, taking only an agreed upon portion of transportation savings the solution creates. The deal, which 3Gtms calls SWORD, or Savings Without Risk…Delivered, is contingent upon companies sharing with the software provider their typical transportation weekly order and transportation data. 3Gtms will analyze the data to see if there is enough freight, and the right mix, to ensure the cost benefits meet its saving’s thresholds.
   “Once the system is in use, 3Gtms will calculate the daily savings generated by the system and will only charge a share of the hard dollar freight savings that are reported,” the company said. “A customer will never pay more than they save.”
   In a conversation Monday with American Shipper, Weseley said he sees the 3Gtms solution as somewhat of a return to the first generation of systems.
   “At 3G, we’re a bit more focused on smaller problems – how do I build a single product that handles brokerage and 3PL division if I’m a (logistics services provider)? The second generation, initiated by G-Log, evolved into this boil-the-ocean approach. The technology had evolved to allow us to do different things.
   “I realized that second generation was really good for super-big companies that wanted to solve the most complicated problems. But it was really hard to solve the simpler problems simply. There was demand for a product that was easier to use, that installed faster, and onboarded faster. At G-Log, we could have modeled the most complicated logistics problems you can think of. But it can take years to get those systems up and running. We can now do it in weeks.”
   Though 3Gtms represents a scaled back version of TMS relative to some of the powerhouse providers, it’s not exactly a return to the systems of 25 years ago. The technology is so much more powerful today that what is considered basic today would have been literally unthinkable back then.
   “It’s a very different world,” Weseley said. “The simplest way to describe it is there was no internet when the earliest TMSs were developed. They would run an algorithm, optimize freight, and push that to a warehouse. Now what we have in connectivity, status tracking, load tendering, the technology couldn’t support that.
   “Now we also do much more complicated moves. Now we do multiple pickups to multiple drops. An intermodal move managing three legs separately. We’re doing much larger models, and better algorithms. When I wrote that first algorithm, I had 400 KB of memory.
   “We’re working with an account right now, they’re using a DOS version of something I wrote 25 years ago. That system doesn’t even know what the internet is. We forget how primitive it was when we started the technology.”
   Now the problem is not the technology, it’s convincing companies – primarily shippers – of the practical benefits of using a TMS. Hence the “putting their money where their mouth is” approach of SWORD.
   “It’s really oriented towards showing them the cost of moving freight without optimization,” he said. “We’re basically saying, this is what our algorithms recommend and I’m willing to pay a piece of it to help.
   “I can tell you stories that it’s very hard for people in our industry. Transportation tends to be toward the bottom of the pecking order. The skepticism from higher ups that there’s going to be a (return on investment) is very high. This is an industry that can be 5 to 10 percent of total sales, and you have a chance to do it a lot better. If it related to manufacturing or customer service, and you could significantly reduce your costs, you’d be all over it like white on rice. But transportation is seen as a necessary evil. Nobody’s complaining about it, so why change.”
   Weseley recalls implementing a TMS at greeting card company in the late 1980s.
   “This was the early days of PCs, and there were only two or three PCs at this company. The CEO had one and the traffic manager had another. We were trying to get approval for a faster printer, because we were literally saving $1,000 per load, but we couldn’t print it fast enough. But the CEO said no to the new printer because he didn’t want the traffic manager to have a faster printer than he did.”
   The SWORD program is aimed at customers yet to use a TMS, a market that Weseley said has developed surprisingly slowly.
   “The vast majority (of 3Gtms customers) are actually replacing existing software,” he said. “If I go back two-plus years, I never would have thought that was the case. I think the reason we get replacements is that most people who are buyers in our industry don’t realize how hard it is to provide TMS, and how many TMSs fail.
   “Most of these people who are buying are coming to us and they realize it’s not so simple. Got something else that’s expensive and realize there has to be a better way. Us coming to the market, it’s not going to be that people will say, ‘here’s a product that makes me magically believe TMS works. The people using Excel won’t be convinced like that. The whole point of SWORD is there really is something you can do.”
   Weseley said 3Gtms’ strength lies in its ability to optimize multi-stop loads and pooled distribution. He also said 3PLs like the tool because it allows them to break down the walls between transportation and brokerage activities into one system.
   He urged prospective buyers to examine the TMS market and match the provider’s strength with their needs.
   “There are a decent number of providers – and everybody is good at something,” he said. “We’re all good at a number of these things. The area we target with SWORD, we’re uniquely good at. Achieving savings from multi-stop, pool distribution routing. Everyone is going to focus on something. One will be better at rating, one is better at visibility. One will be better at providing a network of carriers. One will be better at multi-legged, international moves.”
   Weseley is targeting smaller companies because he believes the potential TMS savings can be as distinct for them as a powerhouse TMS can be for a multi-billion dollar company.
   “When I look at these little companies, a privately held company where 10 to 15 percent of their sales is spent on transportation, if I could increase their bottom line by $1 million, that changes the life of a guy running a $50 million company,” he said. “So it’s about how do I get these guys to think about it.”

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