• ITVI.USA
    15,538.090
    8.420
    0.1%
  • OTRI.USA
    25.170
    0.110
    0.4%
  • OTVI.USA
    15,497.910
    7.270
    0%
  • TLT.USA
    2.720
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,538.090
    8.420
    0.1%
  • OTRI.USA
    25.170
    0.110
    0.4%
  • OTVI.USA
    15,497.910
    7.270
    0%
  • TLT.USA
    2.720
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%

Redwood Logistics



Chicago-based Redwood Logistics is a next-generation, strategically integrated logistics provider that believes every company’s needs are unique. For more than 15 years, the company has been providing solutions for moving and managing freight and sharing its knowledge across North America. Redwood Logistics is focused on making its customers more successful in their end markets by applying talented and motivated people, proven processes and cutting-edge technologies to optimize their supply chain management efforts. For more information, please visit us on the web at www.redwoodlogistics.com.

  • Retailers compete for shoppers’ time and money online

    Total e-commerce revenue in the U.S. exceeded $600 billion in 2019, up almost 15% year-over-year. More and more Americans are taking to their laptops instead of heading to the mall, and some legacy retailers are facing the pressure to adapt to the times or close up shop altogether. 

    While retail e-commerce sales still make up a relatively small fraction of total retail sales in the U.S., that number nearly tripled from just over 4% of total sales in the first quarter of 2010 to over 11% of total sales in the first quarter of 2019, according to the U.S. Census Bureau. 

    Amazon currently accounts for almost 50% of all e-commerce sales in the U.S. With e-commerce expected to continue its ascent at breakneck speed over the next several years, traditional brick-and-mortar powerhouses are rushing to optimize their supply chains for a digital future in order to remain competitive.

    FreightWaves teamed with Redwood Logistics to survey a diverse group of shippers and get their take on the most important issues facing retail supply chains, as well as what they are doing to improve their transportation networks. The results of that survey were detailed in a recent white paper, “The New Supply Chain Imperative.” 

    Researchers asked the shippers what percentage of their sales came from e-commerce or mail-in instead of physical store sales. The mean was 26% and the median was 15%. This reinforces the growing need to ensure supply chains are equipped to handle e-commerce sales efficiently and competitively. 

    “The effects of rapid and continued penetration of e-commerce in the U.S. on trucking and supply chains are numerous and include more distribution centers (DCs) and warehouses, more less-than-truckload (LTL) volumes and lanes, more hub-and-spoke networks, more imports from China, more final-mile infrastructure, more drayage and the increasing shift of transportation assets in-house by Amazon and other leading retailers that are increasingly dominating the retail landscapes,” according to the white paper. 

    About 80% of surveyed shippers reported a stronger focus on a great customer experience as the primary way they are combating the “Amazon effect,” with 20% committing to network redesigns and only about 10% focusing on two-day shipping. 

    “As of now, the rest of the retail industry is mostly still playing catch up to Amazon,” according to the white paper. “Walmart and Target have made significant strides in e-commerce, but it is an open question as to whether their recent aggressive push may be too late.”

    At the time of the survey, most shippers anticipated higher shipping costs and stronger sales growth in 2020. The survey, however, was conducted when the coronavirus pandemic was mostly contained to China and other parts of Asia. While a likely recession would have probably caused shippers to turn significantly more negative in their responses, the general trend to digital will prevail and Americans consumers will eventually rebound.

    In fact, a global pandemic could put more pressure on retailers to amp up their e-commerce presence and fulfillment processes as consumers avoid venturing to physical stores.

    About 35% of survey respondents said they expect artificial intelligence (AI) to have a significant impact on their business in the next couple of years, and over 15% said they have increased their technology spend over the past 12 months to prepare for the future. Almost 40% said they spent time and money upgrading and optimizing their existing technology last year. 

    “Winning retailers of the next generation, in our view, will have a fast and efficient supply chain that can compete with the likes of Amazon; a strong online presence; competitive differentiation and consumer value propositions that stand out from America’s top retailers; products and services that consumers want in a convenient format; a global diversified sourcing base that is not overly dependent on one country and that keeps up with the times and employs state-of-the-art supply chain technology,” according to the white paper. 

    Download the recent white paper from Redwood and FreightWaves, “The New Supply Chain Imperative,” to learn more about how shippers are competing with Amazon and preparing for a digital tomorrow. 

  • Redwood Logistics and FreightWaves partner at collegiate supply chain data analytics competition

    Redwood Logistics and FreightWaves are jointly collaborating with the Quinlan School of Business at Loyola University Chicago and Northwestern University’s Transportation Center, to conduct the second Annual Supply Chain Data Analytics Competition. To be held in March and April this year, the competition is designed to give students the opportunity to work on real-industry applications by analyzing large-scale data sets from both Redwood and FreightWaves.

    According to Mike Hewitt, Loyola’s Director of graduate programs in Supply Chain Management, “Loyola’s Quinlan School of Business started this Supply Chain Data Analytics competition in 2019 to give students in Chicago-area universities the opportunity to compete to solve real-world supply chain problems. The purpose is not just to give participating student teams the opportunity to hone their analytical techniques, but to understand how the insights derived via those techniques can and should be communicated to stakeholders.”

    Alex Yeager, the director of Redwood Ventures at Redwood Logistics, explained, “We are looking at this competition from a shipper perspective. We are taking the litany of data sources available on the market and trying to distill that into an easy-to-understand takeaway or game plan for shippers – not necessarily to predict the market, but for them to be flexible and understand how rates are going to trend in the future to plan their supply chains.”

    Yeager mentioned that the competition is an excellent way for Redwood to join hands with FreightWaves in community outreach and to work with universities from a data standpoint. The competition has been kept fairly open-ended for the students to focus on what they feel will end up making the most impact to Shippers, based on the data sets they get their hands on. 

    “I think fresh eyes looking at our data sets is one reason we’re doing this. In the transportation industry, there’s a tendency to get stuck doing things the way they’ve always been done. At Redwood, we feel strongly that collaboration is important to bringing our customers the best solutions.  So, getting new perspectives on how to help our shippers is great,” said Yeager. “We also want to continue to interact and build relationships with these universities. For us, it’s as much about fostering community collaboration as any concrete takeaways.”

    The data sets provided to the students have a great deal of variety. Data on truckload revenue is a starting point to help students gauge the true cost for shippers to move something from point A to point B. Yeager explained that Redwood is looking to drive broader market coverage in the competition to widen shipper appeal, rather than getting too deep into actual lane-to-lane city pricing. 

    Data on intermodal volume and associated spot rates are also provided, along with truckload volume, inbound and outbound rejection rates. “Teams are provided important macro factors like fuel rates, imports and exports, and industrial production. We are excited to have FreightWaves providing actual freight futures for lane-to-lane pricing across seven lanes that it has pioneered,” said Yeager. 

    Based on the data sets, students will be asked to come up with insights on average rate per mile, truckload moves and volatility across specific lanes. These insights are intended to help shippers have some predictability within their network. 

    “The goal is to see if the students can predict price and potential volatility on how shippers will pay stakeholders in their supply chains. The questions they’re answering are usually around factors that affect the end cost for shippers,” said Yeager. “Among other important decisions, shippers have a mixture of both spot freight and contract freight. We want students to analyze that split based on their take on the market trends, and the data sets provided.”

    About a dozen student teams will be participating at the event, which will be whittled down to three teams. Those teams will compete in the finals on April 7. The finals will be judged by a panel of shippers and other stakeholders in the supply chain community. At the end of this event, the first, second, and third place teams will be announced, with winners receiving cash prizes. 

  • U.S.-Mexico freight dynamics in times of contracting capacity

    The bankruptcy of several trucking firms during 2019 put a spotlight on the presence of excess capacity in the market. This “excess” occurred because of a surge in freight in the last couple of years, particularly in 2018. In turn, some trucking fleets bought more equipment in the hopes of cashing in on the robust market. As the market plateaued and trends began to reverse, the fortunes of these trucking companies sank along with it. 

    The collapse of Celadon in December 2019 was a huge blow. It is the largest U.S. truckload carrier company to declare bankruptcy to date, putting 3,500 employees out of work and dramatically impacting the capacity available in the market. This was especially true in the Interstate 35 corridor that connects Laredo, Texas, to the Midwest, where Celadon was a dominant player in hauling automotive freight. 

    Aside from Celadon’s departure, several major trucking firms pulled out or limited their trailers moving into Mexico, exacerbating the shortfall in capacity across the border. This decline in the number of U.S. equipment circulating in Mexico boils down to simple economics – trucking firms find better return on investment on their trailers when they are moved around in the U.S., rather than in Mexico. 

    With Laredo being the largest freight corridor in and out of Mexico to the U.S., the potential impact on the corridor during the peak season of May through July may be sizable. FreightWaves spoke with Troy Ryley, president of Redwood Mexico at Redwood Logistics, to understand the dynamics of cross-border trade in times of contracting capacity. 

    “For trailers that were northbound (from Mexico to the U.S.), the objective was to not violate any seals or do transloading at the border. They would move straight through to somebody’s facility in say, Chicago or Detroit,” said Ryley. “For trailers that were southbound (from the U.S. to Mexico), it has usually been transloaded. This is because Mexico has a lot of stringent regulations to match paperwork with the actual freight. So the millions of square feet of facilities in Laredo are Mexican brokers’ facilities.”

    Nearly every southbound freight load is physically offloaded and checked, before it is loaded on either a U.S. or a Mexican trailer to its final destination in Mexico. This is critical for Mexican customs brokers, as the country’s regulations dictate that they are liable for the freight’s classification. This means they could be penalized and even have their licenses revoked if there is a serious irregularity in the freight being moved. 

    This explains the density of these facilities in Laredo, which exist to take the freight out of the trailers and inspect them to ensure proper classification before they move into Mexico. Unlike their Mexican counterparts, the U.S. customs brokers do not hold liability on the goods entering U.S. borders from Mexico, with regulations clearly stating that the liability resides with the importer of record. 

    Ryley explained that this is especially hard on companies that transport fragile and bulk merchandise like plastic pellets or glass artifacts from Mexico into the U.S., as they seek to transport their freight without transloading it at the border. Because fewer U.S. trailers are in Mexico, the exporters are forced to pay premiums to secure such trailers for northbound freight. 

    “The lack of equipment or the pull-out of carriers has put pressure on clients to consider other ways of moving their freight. The ones that need to have U.S. equipment are paying a premium, while the ones that don’t need to have it are looking at other options to continue keeping their freight rates low,” said Ryley. 

    Ryley contended that to beat the adverse conditions, it is essential for shippers to not tie  themselves to just one particular carrier, but to build flexibility into their supply chains by having alternatives and a contingency plan in place. Mexico is currently teetering on the edge of a recession; therefore it is critical to scramble quickly and work with multiple carriers to have an uninhibited freight flow. 

    The new USMCA trade deal will also shake up existing situations, as it warrants an increased content requirement for parts in the automotive industry – a mainstay of the Mexican economy. This is expected to drive more production in all three countries, increasing trade between them and also ensuring more availability and flow of both northbound and southbound freight.

    “At Redwood Mexico, we are lucky to have our own assets through our carrier Freight Exchange F/X. In addition to that, we are also one of the larger truck brokers in the U.S., and we’ve already built in plenty of alternatives for our clients to move freight – either via our existing assets or via our brokerage group – even when several trucking companies exit the market,” said Ryley. 

    In addition, Redwood also has a comprehensive transloading alternative at the Laredo border. During the upcoming peak season, the company will use best-in-class carriers at the Mexican border to carry freight to its Laredo transloading facility, which will then be loaded into carriers’ trailers north from Laredo to the destination chosen by the client. 

  • Redwood Logistics partners with Transflo to expand carrier pool, market visibility

    Redwood Logistics has entered into a strategic partnership with telematics and process automation provider Transflo, with the companies integrating their platforms to widen their customers’ ability to find new capacity, while increasing visibility.

    “Transflo had an interest in building a marketplace solution for freight brokerages in the U.S., and Redwood has been building its own ecosystem of connectivity with carriers for a number of years,” said Michael Johnson, executive vice president of strategy at Redwood. “Redwood found it compelling to partner with Transflo since they have mobile adoption of over 1 million drivers in the U.S.”

    Image: Jim Allen/FreightWaves

    Redwood can now access that new-found capacity and streamline its freight transactions by leveraging Transflo’s technology. Redwood’s Digital Transportation Management Platform will integrate with Transflo’s cloud-based transportation software technology, creating an “exponential network effect” that benefits customers of both companies.

    Johnson explained that Redwood had achieved a scale that is critical to driving high utilization rates in the trucking market. As one of the leading brokerages in North America, Redwood moves hundreds of thousands of shipments every year. By finding optimal carriers through tapping into a more extensive carrier network via Transflo, Redwood can increase the overall effectiveness of its platform.

    “Within our proprietary TMS, we have matching algorithms that will select carriers based on deadhead miles and optimal utilization,” Johnson said. “And now, through this partnership with Transflo, we can introduce hundreds of thousands of new carriers that might be better candidates for our freight network, and we can better fulfill their backhaul needs as well.”

    While Transflo has created a 1.3 million-strong community of small and medium-size carriers, Redwood has built a TMS solution that meets the demands of modern-day brokerages. Through the synergies the companies’ partnership generates, truckload and LTL shippers will gain a competitive advantage with better capacity, pricing and shipment visibility.

    Johnson said Redwood would initially roll out the go-live in beta mode, where customers will have access to new capacity of over 500,000 trucks that the company did not have visibility into previously. By introducing new carriers into customers’ supply chains, Redwood can remove much of the friction in the booking process by electronic tendering.

    “We are very excited about partnering with a progressive company like Redwood Logistics to leverage their technology with our digital footprint in transportation to accelerate the delivery of services and drive significant efficiencies to our mutual customers,” said Frank Adelman, president and CEO of Transflo. “We are extremely comfortable at how well our visions align and look forward to multiple opportunities in the near future.”

    Image: Jim Allen/FreightWaves

    Johnson added that the partnership between Redwood and Transflo would continue to evolve and expand based on feedback from customers who use their mobile platform.

    “From just a competitive value perspective, there are lots of digital freight marketplaces, and Transflo represents the second marketplace that we’ve partnered with to introduce into our ecosystem of carrier connectivity,” he said. “From a positioning standpoint, Redwood is agnostic to the marketplace that we’re trying to connect into. Ultimately, we want to build our own ecosystem of carrier liquidity and then leverage the algorithms and pricing engines of our TMS to drive optimal utilization.”

  • Redwood Logistics launches Connect 2.0, a software enabling data sharing and easier workflows

    Redwood Logistics, a logistics technology company providing software-as-a-service (SaaS) solutions, has unveiled its flagship Redwood Connect 2.0 solution that helps supply chain businesses build their own data supply chains such that they can streamline their operations, leverage their data, create smoother workflows, and seamlessly assimilate all disparate logistics technology investments in a single platform.

    The Connect platform owes its genesis to a personal pain point that Redwood witnessed after explosive growth in its transport management services division. As Redwood’s managed services business grew, adding customers meant the need for greater server space and efficiency.  

    “We went through various integration technologies – both homegrown and off-the-shelf, but after a few iterations, we realized that we needed something that could scale and grow faster than what we had seen in the market,” said Eric Rempel, the Chief Innovation Officer at Redwood. “Another objective was to decouple our dependency to our own IT department, so we could be uninhibited in moving at the pace of our growth.”

    Most managed transportation engagements include a bevy of touch points, each with unique requirements that must be configured into the TMS system. Also, most IT groups understand technology but usually not logistics. By decoupling transportation engineering from IT, Redwood knew they would enable their logistics experts to eliminate most of these bottlenecks and connect and integrate with their customers more efficiently. 

    “Requirements within transport operations change quickly, and we didn’t want to go to the IT department every time there was a change. By developing a platform that allowed for the integration without the transitional coding requirements, we knew we could solve a very real problem in a very practical way. This led us to the modern version of Connect that we have today – which is a no-code integration platform for logistics,” said Rempel. “Our implementers simply select, drag and drop from integration icons, where they want data to move from start to finish, then the infrastructure, security and scalability are all handled automatically by the system.”

    Another opportunity to streamline the process was to also reduce the IT lift from the customers side.  Traditionally there are specific formats in which the data must be configured between systems. RedwoodConnect allows the customer to send and receive the data in any file format the way it exists today. Redwood does the configuration for them allowing their IT department to focus on other competing priorities.

    It took Redwood convincing the clients to send their data in its current format to be processed by Redwood and sent back in a format that can be universally consumed by all other disparate systems. Customers love the simplicity and the fact that they no longer need to compete internally for IT resources when implementing their supply chain technology.    

    “When RedwoodConnect first launched in 2015, it was the first version that came out with the idea of not needing to write code. But it didn’t have a user interface. We’ve worked way more on the back end than on the front end,” said Rempel. “We needed to make sure that we could scale based on the size of the industry and how much data we’re processing. Since we process an extraordinary amount of data daily, we really want to make sure that the back end worked properly.”

    Up until the current version,the system was programmed by essentially sending instructions to APIs and instruction tables, but the Connect 2.0 version has moved to a drag and drop interface. The marked difference between 2.0 and Redwood’s previous release is the cloud native scalability, compute performance and the superior user interface, which Rempel pointed out as reasons for it to become a truly revolutionary SaaS product. 

    “The biggest differentiator of Connect 2.0 with competitors in the market today is that we find a way to say yes to our customers, instead of trying to get them to fit inside of a mold that is predetermined for us to just crank out the same result every single time,” said Rempel. “We try to figure a way to understand our partners’ pain points and build a service that creates value. It’s a pretty simple concept.  Focus in on what your customer need and be the best at meeting that need. There is certainly a significant and growing need for this service and we believe we are the best in the industry in meeting this challenge.”

  • Migrating from on-premise OTM to the cloud for a more positive bottom line

    Within the trucking industry, there has always been a push to embrace practices and adopt technology that can help fleets improve efficiency by reducing operational costs and automating redundant manual processes, which leads to better customer service levels. Though transportation management tools have been in the ecosystem for quite a while, the storage of collected data and the services being offered were largely on-premise – within the cab. 

    Over the last few years, cloud-based technology has become mainstream across the freight market, helping fleets store data and receive services in real-time over the internet. However, for this to happen, fleets will have to migrate their systems from being Oracle Transportation Management (OTM) on-premise to OTM cloud, which is a process where fleets could make do with some help for transition.

    “In its essence, cloud migration is really about moving from a client-managed Oracle OTM infrastructure and support to an Oracle-managed OTM infrastructure and support,” said Mark Kissell, the vice president of logistics solutions at Eminent Global Logistics, a subsidiary of Redwood Logistics. “But that’s the easy part. Managing and migrating the data from the OTM on-premise to the cloud is where the actual work is.”

    Kissel pointed out that one of the primary reasons for companies to migrate stemmed from their eagerness to reduce their IT infrastructure and support costs. There also exists a functionality gap between on-premise and cloud software, with the latter having a performance edge and much more backend support, thus making it more reliable overall. 

    Before the advent of the cloud-based OTM, the on-premise OTM was an enterprise transportation management system tool that was mainly used by Fortune 500 companies, because the costs associated with IT infrastructure and support were not affordable for small- and mid-tier businesses. 

    “When Oracle came out with its cloud OTM platform, it was met with skepticism by the on-premise client base, who believed that the cloud couldn’t handle what they were doing, or simply thought it was too new to trust,” said Kissel. “But that opinion turned in a year or two of the cloud, and with the conversations I’ve had with clients in the past year, they seem to realize that they’re now getting left behind.”

    Large companies are making the shift, with cloud migration now becoming a business strategy. Fortune 500 companies view this as an opportunity to reduce their IT infrastructure and support costs, with Kissel mentioning that Redwood Logistics saw a 50 percent increase in cloud migrations since the last quarter of 2018. 

    Redwood Logistics helps its clients to cement a strategy that figures out the best approach to cloud migration. “We initially come in with strategy discussions, timing discussions and then ease into the details around the differences between on-premise and cloud, while identifying what they may need to change. Every client is a little different with how they utilize OTM,” said Kissel. 

    Kissel explained that Eminent’s clients could handle a major part of the migration, because they employ skilled individuals who understand how the environment works and what to do with their OTM. Company’s stake in the migration process is about figuring out a way to augment the strategies that its clients have set in place.

    “If, for instance, they want to scale fast, they might need some additional resources. But if they want to go a little slower, then their resources could probably handle a bit more,” said Kissel. “I see these larger clients to be very connected to Oracle, and Oracle is now looking at them and assuring them that the cloud OTM is now ready for use. This acts as a catalyst for the large on-premise customers to start looking at migrating to the cloud for good.”

  • LoadRunner, the pricing and digital freight matching engine at the center of the Redwood – Strive brokerage operation

    In February, Chicago-based Redwood Logistics announced its acquisition of Strive Logistics, a freight brokerage with offices in Chicago and Austin, Texas, placing the combined entity in the top 15 North American freight brokerages with a combined $1 billion of freight under management.

    Commenting on the deal, Redwood CEO Mark Yeager pointed out that Strive’s LoadRunner, an intelligent platform that uses advanced analytics to drive broker productivity, perfectly complements the customer-facing technology that Redwood had developed.

    We wanted to learn more about LoadRunner, so we spoke to Michael Johnson, Redwood’s new executive vice president of strategy. Before the acquisition, Johnson was most recently Strive’s vice president of strategy; Johnson spent 12 years at Strive, having started on the brokerage floor in the fall of 2007.

    Johnson said that Ben Greene, a veteran of American Backhaulers and C.H. Robinson who founded Strive in 2003, realized early on the advantage that data and automation could bring to a brokerage competing in an industry that was largely dependent on Excel spreadsheets and telephone calls.

    “Two years into learning the business, Ben was expressing to me his vision of creating a technology platform that would allow the company to scale faster and differentiate ourselves in the marketplace,” Johnson said. Johnson’s engineering background gave him the technical skills to sketch out the blueprint of what the platform would look like.

    After two years of development, the technology was ready to go live.

    “We ended up calling it LoadRunner. Our primary goal was to emulate the way high-frequency trading platforms perform in financial markets, specifically how they use data to drive automation and decision-making within their organizations,” Johnson explained.

    In its seven years of operations, LoadRunner has been enhanced by more than one hundred new releases. These refinements were driven by feedback from users, customers, carrier partners, and the company’s dictum that “complacency is not an option.” Johnson said that when LoadRunner was launched, fully 90% of the capacity it matched freight to was sourced from public loadboards; one year later, that number was down to 30%.

    “As recently as the end of last year,” Johnson said, “less than 10% of our total freight is moved by carriers we’ve booked from public load boards. LoadRunner has allowed us to change how we’re managing our own carrier networks, and our matching algorithms allow the freight we have coming in to match up to our own liquidity, in our own private marketplace.”

    We had questions about those matching algorithms—what are the algos looking for? What is the engine optimizing for? In other words, what are the attributes of a load and a carrier that cause LoadRunner to match them?

    LoadRunner’s carrier selection algorithms make probabilistic bets on which carriers can offer customers the best value and are most likely to accept the load. LoadRunner’s algorithms are dynamic in that as new information enters the system, the outcomes and suggested carriers change in real time.

    “The reason that’s important,” Johnson said, “is that just in our private marketplace alone, there are hundreds of thousands of available trucks we have visibility into. Especially on high volume lanes, like Dallas to Houston, we might have more than 60 carriers who would haul that lane, so what we need to do for our operators to help make decisions is weave in the order that those carriers should be contacted. We’re asking ourselves, how do we take data and provide recommendation engines to our team as to which carriers should be called and in which order, which dramatically increases the velocity of freight booking.”

    Apart from the technology itself, both LoadRunner and RedwoodConnect, Redwood’s proprietary integration middleware, will benefit from the increased scale achieved by combining the companies’ data, customers, and carrier networks. Load matching is a mathematical problem governed by Metcalfe’s Law, which states that network effects are proportional to the square of the number of connected users in the system. Greater scale gives brokerages an exponential, not a linear advantage over their smaller competitors.

    Another way to think of the network effects derived from increased scale is liquidity in a marketplace: It is now easier for Redwood to match a load, and to do so at a higher productivity. Shippers’ costs go down and carriers are also afforded better rates. Scale makes it easier to service valued customers’ freight with the highest quality carriers and help trusted carrier partners optimize the utilization of their assets.

    “We’re coming together from two very complementary positions in the market,” Johnson concluded. “Strive and Redwood are thought leaders when it comes to technology. Redwood has the best customer-facing technology, and Strive has spent the last ten years building the internal horsepower. The technology is at the forefront of the industry and it makes us more effective in every way. It’s the combination of these tools and our people that creates the real magic for our customers.”

    How to keep shippers happy

    In April 2017 World’s Finest Chocolates (WFC), a Chicago manufacturer, hired Redwood Logistics, a third-party logistics (3PL) company also based in Chicago, to build a transportation management system (TMS) connecting its warehouses with core business operations. The project was completed successfully on a tight timeline. So in 2018, when a trucking crunch hit the market, raising spot rates for WFC by as much as 20 percent and causing capacity challenges out of Chicago, the chocolate maker once again turned to Redwood for assistance.

    The 3PL came through. By tapping into its customer network and leveraging backhaul capacity, Redwood’s multimodal division was able to procure consistent capacity in many lanes while bringing WFC’s truckload rates down by around 10 percent. WFC responded by moving more of its carrier business over to Redwood, and the logistics provider now handles $1 million of WFC’s carrier expenditures.

    “It makes us not worry about having to be trucking experts in moving our product,” said Todd Peterson, director of logistics for WFC. The company is now working with Redwood on another project, a bid for less-than-truckload freight. “Redwood has been able to step into many of the challenges we face,” Peterson said.

    That WFC is looking to a 3PL to help address a variety of logistics issues is not so surprising.

    Just a few years ago, manufacturers and retailers were riding a wave of low transportation rates, and didn’t feel the need for outside logistics assistance. But in 2018, the market shifted and transportation costs started eating into shippers’ bottom lines. Even now, as capacity starts to loosen up, shippers are looking to 3PLs to help them make more proactive business decisions, said Erin Breen, Redwood’s senior vice president for strategic sales.

    “They’re saying, ‘hey, I don’t want to be caught where I was in 2018 when we were scrambling,’” Breen explained. As automation, driver shortages and e-commerce trends continue to upend the supply chain, 3PLs can assist shippers with everything from implementing new software platforms like a TMS to providing industry insights and macroeconomic analysis. “It’s less about selling an individual service and more about figuring out and solving specific customer problems,” said Breen.

    Basically, 3PLs and (many) shippers are now looking to build relationships that are less transactional and more strategic. That requires a shift in thinking on the part of everyone involved, as both parties have to pay attention to a broader set of concerns than spot and contract rates.

    Providers, for example, need to know as much as possible about the industry sectors in which their customers operate. Redwood accomplishes this in part by leveraging insights from third parties – e.g., Morgan Stanley indexes, purchasing FreightWaves SONAR licenses for customers – as well as its diverse client base of retailers, food businesses and manufacturers.

    Technology solutions require a similar holistic approach. Automation alone isn’t going to provide insights into what a given business requires, Breen said. Whether it’s a TMS or another software platform, “you need to understand the customer’s data and the customer’s network.”

    Shippers are looking for “continuous engagement,” he added. “If we’ve implemented a technology solution, we don’t want them to come back in two years and say it’s outdated. It’s about staying ahead of the curve.”

    For their part, shippers need to be willing to share data about their business operations – everything from production schedules to promotional strategies, said John Langley, a professor at Penn State University and a co-author of the 2019 22nd Annual Third-Party Logistics Study.

    “The more 3PLs know about their customers, the more successful the relationship is going to be, and the more they can trust each other if there are problems to be resolved,” Langley said. (A simple non-disclosure agreement can alleviate customer unease about sharing proprietary information with a 3PL.) Langley echoed Breen’s comment about 3PLs drawing on their rich client base to solve problems – if one customer has a problem, the 3PL can probably expect a similar problem with another client.

    Another big factor in the success of shipper-3PL relationships is related to the development of clear objectives, Langley said. “When the customer puts the business out to bid, the customer needs to say ‘here’s what we want.”

    That’s exactly what WFC did. The chocolate maker decided to keep growing its relationship with Redwood, Peterson said, because the logistics company was willing to start off with one small project, and then slowly find additional ways of adding value.

    “We found that Redwood and its approach was strikingly different than other logistics companies that wanted to immediate try and bundle other projects together,” Peterson said. “The Redwood team was the only one that said ‘Let’s focus on the TMS, and as we grow together, we’ll find other opportunities.’”

    “That has been very prophetic,” Peterson said.

  • How can you effectively navigate Mexico’s complex supply chain maze?

    Shipping to and from Mexico is never easy, but this year a perfect storm of market conditions is putting a crimp in rates and capacity.

    “An imbalance of trade means there’s much more northbound capacity coming out of Mexico than inbound entering the country”, said Troy Ryley, president of Redwood Mexico, a division of Redwood Logistics, a third-party logistics (3PL) provider based in Chicago.

    The electronic logging device (ELD) mandate has also made U.S. carriers more conscious of lost productivity when their trailers are stuck offloading at the border. As a result, many of those carriers are pulling their trailer equipment out of Mexico “because they get a higher return in the U.S.,” Ryley said. (In January, U.S. Xpress sold its cross-border operation.)

    Redwood Logistics has operated in the Mexico market for years and last summer launched Redwood Mexico as an expansion of its existing cross-border supply chain solutions services. The company offers expert freight constancy, not just transactional truck brokerage solutions. “We’re attacking the market as an integrated logistics provider with some asset capability,” Ryley said.

    That perspective allows Redwood Mexico to take a more strategic approach to solving client issues, saving them headaches and money in the long-term.

    And in 2019, headaches abound.

    In addition to the previously mentioned macroeconomic and technology factors, several “never before seen” challenges are popping up south of the border, said Redwood Logistics president Todd Berger. A teachers’ strike in January shut down the Puerta Mexico rail ramp in Toluca for several weeks, wreaking havoc on inbound and outbound intermodal traffic and putting more pressure on truck capacity. A gasoline shortage is causing lines of several hours at the pumps.

    Add to that the ramp-up to peak produce season – which starts in May – and shippers in 2019 should expect a challenging year. To weather the storm, Redwood executives said, shippers should be open to multiple logistics modes, useage of alternative border crossing points and avoid trying to lock in spot rates.

    “We’ve told [clients] there is a time to be on the spot market and a time not to be,” said Ryley. During the first and second quarters of this year, shippers will be making a big mistake if they focus on price alone, he warned, as those who do will see capacity evaporate. “They will be the first ones to lose.”

    The good news is that later in the year, things should cool down. “We are positioning clients for the fourth quarter to take advantage of spot opportunities for additional savings,” Ryley said.

    Transloading – the process of transferring a shipment from one kind of transportation to another – is a good option this year. Many clients are hesitant to go with the intermodal model because they don’t want people’s hands on their freight, Ryley said. “But if you have a fairly standard load, it’s an extremely effective way to mitigate cost increases, and ensure capacity.”

    Redwood, which operates its own transload border facility in Laredo, recently put together a competitive transload program for a large baking ingredients client that provided reliable capacity at its plants in Mexico and dedicated capacity for its U.S. deliveries.

    The 3PL has helped other companies navigate the Mexican logistics maze that has been made all the more sticky this year. During the teachers’ strike that shut down the Toluca ramp, Redwood helped one client switch to alternative ramps in Mexico to ensure were no interruptions with its supply chain.

    Agile solutions like this and an open-minded approach to logistics will continue to be keys moving forward if shippers hope to continue running their cross-border operations without a hitch.

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