While wide-ranging financial institutions are becoming more active in automated freight payments, more traditional, often dedicated providers of such services such as Cass, Ultra Logistics and CT Logistics are surviving by focusing on the intricacies of managing customers’ transportation spending.
St. Louis-based Cass Information Systems is the sector’s largest such provider in terms of the value processed. Cass’s roots date back to the 1906 founding of Cass Bank and Trust. Cass has been providing freight payment services since 1956. At the time, several banks were offering freight services, according to Cass Marketing Manager Tom Zygmunt.
To thrive despite competition from the big banks, Cass stresses its ability to harness the latest technology to process its customers’ “complex payables” — that is, invoices characterized by high complexity due to transaction volume, complex structures or specialized fees and services; a high tendency for errors; and high content value, which can be turned into valuable business intelligence useful throughout the corporate enterprise.
Major shippers such as Dow Chemical, DuPont, Toyota and Unilever use Cass to meet their needs for processing complex payables for freight, parcel, utilities and telecommunications expenses.
Zygmunt sees a “continued drive for more automation and more ways to look at information” aimed at meeting increased customer demands. Cass is constantly revamping and upgrading systems for some of its oldest customers, he said. The company’s growth is coming, in part, from acquisition of new customers, but also from old customers “who are going more global, companies that say to us, ‘You are doing this process in the U.S., and now we want you to do it for us in Europe.’ ”
How does Cass differentiate its services from its competitors? Generally speaking, Zygmunt said, “the information that they (Cass’s competitors) provide has very little customization. When we put together our system, it is more specific for each individual customer. What we are doing for Unilever is probably a little bit different from what we are doing for Dole … and a lot different from what we do for Toyota. Freight rating has its nuances, but not everyone does it as well as other people.”
A key payoff of Cass’s approach, Zygmunt added, is that valuable business intelligence it collects isn’t just about transportation spend, but has a broader value for the overall organization. Cass’s approach, he added, enables shippers to “look at what carriers they are using and see how much they are paying them, and they can use that (information) when negotiating their rates with them. If they are looking at their shipment patterns when going from point A to point B, they can manage (those patterns) more efficiently.”
Several customers that are food companies “like to get their transportation costs down to the SKU level so they can allocate their expenses even to different sizes of the same product,” he noted. “They know the cost components going to specific products at that (SKU) level. That helps them with the pricing of that product.”
One company that worried about overspending on expediting packages used the data from Cass’s system to learn which of its locations were unnecessarily sending packages routed “overnight” or “FedEx,” rather than “two-day delivery.”
At Fair Lawn, N.J.-based Ultra Logistics, Anthony Vitiello, director of marketing, stresses the company’s deep roots in the transportation sector. “Companies like IBM and Oracle also provide (freight payments) platforms they market toward the transportation industry, but our systems are designed with particular challenges facing shippers.”
Users of IBM, Sterling, Oracle and the larger ERP companies “also offer this as another service under their wide umbrella, but we hear that those systems are big and unwieldy and don’t get as much of the present configuration ability to address the acute challenges germane to the transportation system,” Vitiello said.
What kinds of transportation challenges does his service zero in on? As an example, he said, “Most companies use a lot of common carriers. Some have their own private fleet; while some use a mixture of common carriers and private fleet. But having so many different payees, certain carriers on one day might be able to accept the shipment, but the next day they might not be able to take the shipment in the same lane, because of limited capacity. There is always a revolving door of different players being paid, being paid on time and track the discrepancy.”
Ultra produces “a freight pay module that is part of our TMS solution that handles all of these things with great specificity; this is the difference between what the banks offer and what we offer,” Vitiello said.
Although Ultra has only 55 employees, many of its clients are big brands such as Perdue Farms, Land O’ Lakes and Kraft Foods. Such companies are big enough to get preferential treatment from the big banks, but “they opt to go with a system like ours because of the domain expertise that they get.”
When they call for support, he adds, the customer support they receive from Ultra will address the “particular transportation issue. The development team here are all technologists, but many of them come with a background in transportation to begin with. That makes them a double threat.”
Contact Alan M. Field at email@example.com.