XPO’s digital marketplace helps shippers troubleshoot supply chain

XPO’s digital marketplace helps shippers troubleshoot supply chain

XPO Logistics truck arrives at a port.

The digital platform will give customers of XPO’s non-asset brokerage and asset-based transportation services visibility into where their shipments are, their estimated time of arrival, and other business intelligence. Photo credit: XPO Logistics.

While digital brokerages look to disrupt large US freight brokers, one of the largest freight brokers is launching a digital marketplace of its own. XPO Logistics on Wednesday rolled out XPO Connect, a cloud-based, digital freight marketplace designed to give shippers access not just to XPO’s brokerage business but all of its transportation options through a single point.

The digital platform will give customers of XPO’s non-asset brokerage and asset-based transportation services visibility into where their shipments are, their estimated time of arrival, and other business intelligence (BI) — including information on total shipments in transit, pending quotes, unpaid invoices, and other operating data — on desktop and mobile devices.

The digital marketplace and BI platform is the latest technological innovation from XPO Logistics, which in February launched WMx, a cloud-based, mobile warehouse management system. “We’re leveraging our leading positions across the supply chain to help companies transform how they do business,” Troy Cooper, chief operating officer, said in a statement.

XPO Logistics, which reported $15.4 billion in gross revenue, launched XPO Connect in response to the efforts of startups such as Uber Freight, Convoy.com, and several other companies to make greater inroads into the traditional brokerage market using cutting-edge technology. Larger brokers and third-party logistics providers are not about to concede to new entrants.

XPO's digital entry represents perfect timing from a capacity standpoint

XPO’s entry into the digital brokerage market also comes as US truck and intermodal shippers struggle to source capacity, keep freight shipments moving, and deliver to their end customers on time. The impact of the electronic logging device (ELD) mandate, which includes longer transit times, has made improving visibility into truck lanes and shipment whereabouts critical.

“Our customers are looking to know where their product is at all times and assurances that the delivery will meet their end customer’s needs,” Erin Van Zeeland, senior vice president at Schneider Logistics Services, said in a Transportation Intermediaries Association report on visibility released Tuesday. “It’s much more than seeing freight on a map,” she said.

Visibility is the next rung in the ladder shippers need to climb to reach the data on the “business intelligence” shelf that will provide them with predictive analytics and the ability, not just to provide customers with better information, but to more effectively source capacity, reveal problematic links in the supply chain, and identify opportunities to improve processes.

Internally, XPO already is using predictive analytics to forecast demand for its contract logistics business and better plan how to deploy and use resources. “Our algorithms use historical trends and match them with data from customers to predict how much labor we will need the next day,” CEO Bradley S. Jacobs told JOC.com in February.

“Using predictive analytics to forecast logistics demand helps us speed up fulfillment and deliver a better customer experience,” he said. “That’s true in reverse logistics as well.” It is also true for XPO’s shipper customers, and XPO Connect is designed to give them the kind of capabilities they need to more accurately forecast demand and schedule shipments.

That type of accuracy is key to building “time” back into supply chains that have been siphoned of hours first by lean inventory management and just-in-time delivery schedules and now by the ELD mandate, which has led to a readjustment of transit times as truckers refuse loads that might violate hours-of-service restrictions.

With XPO Connect, shippers will not only see available capacity but “fluctuations in available capacity as it changes” throughout XPO’s network, a company spokesperson said.

The horizontal digital marketplace will also integrate with XPO’s vertical technology platforms, and as it is rolled out will eventually include all of XPO’s transportation modes, from truckload to less-than-truckload (LTL), intermodal, and last mile. The end result, XPO says, will be a system that can provide a more holistic view of capacity across platforms.

XPO is focusing on four areas of innovation, Jacobs said: automation and intelligent machines, visibility and customer service, the digital freight marketplace, and dynamic data science.

“We’ll be rolling out a whole host of new tools and apps throughout 2018,” he told JOC.com.

That technology will be “optimized for mobile, for smartphones. It can be used on a laptop, tablet, or a smartphone and integrates with our other technology.” That interoperability and mobility will help XPO “ramp up” projects and bring new customers on board rapidly.

Eventually, 100 percent of XPO's goods will be automatically tracked

Greater use of advanced robotics in warehousing is among the spending priorities at XPO, but XPO is also thinking about small bits of big data. For example, “we can analyze thousands of data points to arrive at optimal work loads for LTL dock workers and drivers,” Jacobs said. “That eliminates waste, and these are self-learning programs, so they get better.”

In the last-mile arena, XPO is offering customers the ability to track shipments online and send delivery appointments directly to their online calendars, giving customers more control over deliveries and raising the level of visibility. “That’s the number one request we get,” Jacobs said. “We’ll add a voice notification feature in the next few months.”

“Today, two-thirds of the goods we move are automatically tracked without human intervention,” Jacobs said. “Over time, that’s going to approach 100 percent. That’s the way the world is turning.” The digital transportation marketplace will help shippers by “finding the best carrier for a load at any given time using algorithms that do the matching.”

“These are the areas we believe will make the greatest impact on our customers, reducing inventory holding costs, reducing return cycles,” he said. “It’s our secret sauce.”

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @wbcassidy_joc.