Third-party logistics provider (3PL) Transplace is extending its e-commerce reach by acquiring parcel technology company ScanData and integrating its technology into Transplace’s transportation management system (TMS). The acquisition adds parcel management capabilities to Transplace’s TMS at a time when online shopping, which is heavily dependent on parcel delivery services, surges amid the COVID-19 pandemic.
Terms of the deal were not disclosed, but Frank McGuigan, CEO of Transplace, said the integration of ScanData’s parcel transportation management system (PTMS) with Transplace’s multimodal platform will help shippers cope with rising e-commerce demand and optimize their freight and parcel transportation networks.
ScanData, founded in 1986, counts major pharmaceutical, floral, and apparel companies among its customers. The company specializes in supporting customers with high volumes and complex shipping rules, and the need to manage the entire “parcel lifecycle,” from origin to destination.
There’s hardly been a better time to expand into the parcel market. US e-commerce sales jumped 49 percent from March to April, according to Adobe’s Digital Economy Index, which analyzes more than one trillion online transactions across 100 million different SKUs. Online electronics sales were up 58 percent in April from the previous month, Adobe said.
“This is wonderful timing for ScanData,” said Satish Jindel, president of ShipMatrix, a parcel shipping visibility reporting tool, and president of transportation research firm SJ Consulting Group. “In April and May, parcel shipping volumes at our 1,000 customers were up by 40 to 50 percent or more. Transplace and other 3PLs have to include parcel capabilities along with truckload, less-than-truckload, and intermodal rail.”
The uptick in online sales while many brick-and-mortar stores are closed is leading shippers to look for help handling increased e-commerce volumes, as more shipments shifted to parcel channels rather than freight networks. Even for parcel carriers such as UPS, increased volumes mean changes to networks to handle more daily stops in a higher density delivery area.
With global e-commerce volumes rising 18.5 percent to $3.5 trillion in 2019, according to Statista, 3PLs and TMS providers began adding parcel functionality well before the pandemic. Software company 3GTMS, for example, acquired Pacejet earlier this year to gain small parcel capabilities, and BluJay has been expanding its parcel tools. In early January, Trimble acquired TMS provider Kuebix, which specialized in less-than-truckload (LTL) and parcel service. A week later, 3PL GlobalTranz acquired Cerasis, a freight broker that functionally acts in the market as a TMS and managed transportation provider with specific modal strengths in parcel, LTL, and final-mile.
The explosion of e-commerce business during the COVID-19 pandemic is accelerating the trend, which may not slow even when the crisis eventually subsides and consumers begin shopping in stores. “We expect some of these behavioral changes that are taking place during the pandemic to continue post-pandemic,” XPO Logistics chairman and CEO Bradley S. Jacobs said May 5. E-commerce “is a great business to be in right now.”
For Dallas-based Transplace, which has $9 billion of freight under management in North America, the parcel capabilities of ScanData will become more necessary as shippers look for 3PLs that can provide one-stop, supply chain-wide services. Those services increasingly will include modeling distribution networks that blend parcel and freight management.
“You can’t participate in e-commerce without technology that helps in parcel,” Jindel said. “I would expect Transplace will do a few more add-ons” to further bolster its parcel services.