Surface transportation capacity in the United States is tight, and supply chains are increasingly tangled. That is accelerating the ongoing drive toward supply chain automation and “digitization” of manual transportation processes, said Tommy Barnes, president of project44. Automation is “not just about getting better, it’s about survival,” he said in an interview Thursday.
“If some companies don’t go down a path of innovation, they’re not going to be around,” Barnes said. Speakers at projectAUTOMATE, a conference organized by project44 in Chicago last October, noted that transportation “isn’t a fast-moving industry.” The current environment, however, seems to offer businesses a choice between moving faster and paralysis.
Shippers are being hit with hefty pricing demands from carriers as the current round of annual rate talks begins. Companies that moved contract talks to the first quarter last year to avoid rate hikes in late 2017 are seeing those price hikes now. Spot market dry van rates remain elevated, with the DAT Solutions US average dry van spot rate at $2.15 per mile Feb. 17.
“Shippers have two challenges, one is rate increases and the second is more and more demanding customer delivery times,” Ben Cubitt, senior vice president of engineering and procurement at logistics company Transplace, told JOC.com. “They need highly capable, service-oriented carriers, so they can’t offset the [higher] prices,” at least not easily.
Shippers prioritize supply chain visibility
Those circumstances are pushing supply chain visibility to the top of the shipper priority list, if it was not there already. “It’s accelerating the trend in a big way as people look for ways to be more efficient,” said Barnes. “The most expensive part of the supply chain is the inventory segment. Companies that are really thinking about this are tying global visibility into demand planning.”
They are also looking beyond older, siloed modal solutions and toward solutions that stitch multiple modes together, Barnes said. His company, which started by supplying application programming interface or API-based connectivity software in the less-than-truckload (LTL) market, expanded into the volume LTL, truckload and rail freight sectors during 2017.
This year, project44 plans to enter the international ocean freight market, integrating global and North American transportation modes to provide door-to-door visibility that eliminates the gaps or “black holes” that obscure freight data as shipments move from mode to mode. “The way you win the game is you stitch that data together to create a single visibility layer,” he said.
The company’s “integration layer” of APIs also is being adopted by transportation management software (TMS) providers as a new element in existing TMS systems. Third-party logistics provider Echo Global Logistics this month integrated project44’s LTL and volume LTL software into its TMS. Last month, MercuryGate added its full truckload and volume LTL APIs to its TMS.
Barnes’s company is one of several leading the charge to expand the use of APIs in transportation management systems, a movement that is knocking down walls that once prevented the integration of carrier, shipper, third-party, and consignee technology systems. That kind of integration across enterprises is increasingly critical to controlling costs, he said.
“You couldn’t in the past because the technology wasn’t there,” he said. “These worlds [carrier, shipper, customer] are converging now because technology is in place that lets that happen.” For shippers facing steep freight rate hikes this spring and the promise of more volatility in transportation networks ahead this year, that convergence cannot come quickly enough.
Contact William B. Cassidy at firstname.lastname@example.org and follow him on Twitter: @wbcassidy_joc.