Canadian shippers have an expectation that carriers will invest in technologies that will lower transportation costs, improve service levels and provide them with the information required to efficiently manage their supply chains. At the same time, carriers have the challenge of selecting the best technologies for meeting shippers’ expectations while providing an acceptable ROI.

Motortruck and its sister publication, Canadian Transportation & Logistics have partnered with the Schulich School of Business at York University on a ground-breaking research project to better understand the differing priorities Canadian carriers and the shippers who buy their services place on technology investments.

Separate Web-based surveys were sent to shippers and carriers. Each respondent was asked to identify technology priorities based on the primary mode of transportation used (shippers) or provided (carriers). The survey enjoyed a strong response with 580 participating Canadian shippers and carriers providing the data necessary to identify the gaps in technology priorities. It is hoped that this published information will lead to a dialogue between trading partners to better align shipper expectations with carrier technology investment plans.

Survey Results

Transportation Management Systems

As one would expect, both shippers and carriers placed a very high priority on carriers using a transportation management system (TMS) to effectively manage the flow of shipments.

Transportation Management Extension Software (carriers only)

When looking at the importance of specific extension software that can be bolted onto TMS systems, carriers responded that operational applications (Dispatch) and cost efficiency applications (Costing, Fuel Optimization, Fleet and Asset Maintenance) are high priorities in order to manage their businesses efficiently.

Dynamic Routing software is most important to LTL carriers and Couriers with high volumes of pickups and deliveries to be made. Lane Optimization software is not yet on the radar screen but the increase in the number of loads brokered out to third-party carriers is being reflected in the medium priority for Broker Management software.

Web-Based Services

The ability for shippers to use the Internet to access information and process business transactions by using the carrier’s Web site has become a standard industry offering. The range of Web-based services valued by shippers varies considerably based on the mode of transportation service being used. The following Web-based services were prioritized by both shippers and carriers:

Rate Quote Request Document Image Inquiry Return Request

Pickup Request Invoice Inquiry Analytical Reporting

Appointment Scheduling Invoice Dispute Resolution

Performance Reporting

Shipment Track & Trace Rate Quote Request

Information Download to Spreadsheet

Electronic Alerts Claims Filing Wireless Internet Access

For the LTL mode of transportation, most Web services were rated a high priority by both shippers and carriers except for the following transactions which were rated high by shippers but low by carriers:

Electronic Alerts Claims Filing

Invoice Dispute Resolution Returns Request

The Truckload mode of transportation showed the largest number of gaps in the priorities of Web services with carriers rating all of the transactions low in priority with the exception of Track & Trace while shippers expected to have access to most Web services with the following transactions rated a high priority:

Rate Quote Appointment Scheduling

Performance Reporting Pickup Request Track & Trace

For Rail/Intermodal modes of transportation, shippers and carriers rated most web services as high priority except for the following gaps which carriers rated as low priorities:

Claims Filing Return Request

The Courier mode showed shippers setting a high priority on all of the Web services (except the wireless Internet access) and carriers having the same priorities except for the following gaps:

Invoice Dispute Resolution Claims Filing Return Request<

It is clear from the survey that shippers now expect carriers to provide access to most Web-based services (except wireless Internet access) for carrying out both business transactions and having immediate access to information. Truckload carriers have the most catching up to do in order to meet shippers’ expectations.

Systems Integration Tools

The use of technology to automate the exchange of business transactions between shippers and carriers is one of the best ways to reduce overhead costs, speed up the supply chain and improve the accuracy of information exchange. Different types of technologies are available in the marketplace varying in levels of complexity, cost and degree of automation. The survey results showed the following points:

Carriers place a high value on using EDI technology to exchange transactions with shippers while shippers place a high value on EDI integration only if they can exchange transactions without incurring the cost of using VANs (Value Added Networks).

Utilizing E-Mail with attachments is rated high by both parties.

XML and IVR technologies were rated low priorities by both carriers and shippers.

The priority for using File Transfer and Automatic Fax technologies varied based on the mode of transportation as seen in the chart below:

The survey shows that both shippers and carriers must be prepared to invest in multiple types of technology in order to increase the number of trading partners with which they will be able to exchange business transactions electronically.

Mobile Computing

The use of various mobile computing technologies in vehicles is increasing in both competitive offerings and the many ways in which the technologies can be applied. The cost of purchasing and operating these mobile technologies is decreasing for carriers as the value placed on the access to up-to-date shipment information by shippers remains very high. The survey results demonstrated that:

Access to real time GPS location information and shipment updates are ranked high in priority by both carriers and shippers in all modes of transportation.

Barcode reading of documents and electronic signature capture were ranked high by shippers in the LTL and Courier businesses. The only significant gap is in the low priority LTL carriers place on providing electronic signature capture capability.

Shippers ranked the priority of Map Displays, Truck Monitoring and Trip Monitoring to Planned Routes technologies low as they saw them as efficiency tools for carriers. TL and LTL carriers generally viewed these technologies as a high priority.

Transportation Event Management Alerts

Transportation event management is all about proactively informing all interested parties in the supply chain about an activity that is not proceeding as planned. This could be a delay in arrival, damage to a product in transit or a customs clearance issue. The event notification lets all interested parties immediately put alternative plans in place so that the efficiency in the supply chain is not affected. When surveyed about the use of E-Mail and Wireless Text Messaging for issuing E-Alerts, the results showed that:

E-Alerts by E-Mail are seen as high priority by both carriers and shippers in all modes of transportation with the single exception of LTL carriers who saw it as a low priority.

E-Alerts by Wireless Text Messages are seen as a low priority by both carriers and shippers in the TL and LTL modes of transportation while seen as a medium priority by both carriers and shippers in the Rail/Intermodal and Courier modes.

The need for proactive supply chain communications is definitely a priority for shippers and the capability to issue E-Alerts is being addressed by most modes of transportation.

Business Intelligence Systems

A business intelligence (BI) system is a relatively new type of technology that helps data-intensive businesses analyse problems from multiple perspectives using a slice, dice and drill down capability that allows a company to first understand a problem, identify ways in which it can be addressed and then measure the impact of corrections on an ongoing basis. The survey asked shippers and carriers to prioritize the leading uses of BI systems in the transportation industry with the following results:

Margin/Cost Optimization was rated high by shippers but given a low investment priority by carriers across all modes of transportation.

Performance Measurement was rated a high priority by all shippers and carriers.

Lane Analysis was rated low by both shippers and carriers.

The adoption of new technology is difficult and early progress is often slow. The ability to deliver comprehensive performance measurements to shippers is a good first step in delivering comprehensive, customer service information.

Interfacing with RFID Technology

The emergence of RFID tags on containers, skids or cartons to track product movement, as well as to collect and transmit data about conditions around the movement itself, is just starting to make its way into supply chains. When asked to prioritize the need for carriers to be able to interface with RFID technology, the survey found:

Interfacing with RFID technology in the vehicles was rated low by all shippers and carriers except by the carriers in the Rail/Intermodal and Courier modes of transportation who rated the capability with medium to high priority.

Interfacing with RFID technology at the terminals was rated low by all shippers and carriers

RFID technology is not yet a mainstream technology but is being tried out by certain shippers and carriers to determine the impact of RFID technology on order fulfilment quality, cycle times, and inventory and asset productivity levels.

Integration with eMarketplaces

In the post dotcom world, there are a limited number of eMarketplaces left selling services to the transportation industry. The survey asked about the priority of carriers being integrated with these eMarketplaces including those providing spot auctions and real time bidding requests. The results showed:

Integration with eMarketplaces was ranked low in priority and usage by the carriers and shippers in all modes of transportation.

It is likely that eMarketplace technology will remain a niche offering with a limited impact on the industry.

SUMMARY

The survey results are a clear indication of the technology capability expectations shippers have of their carriers. They should provide a path for carriers to follow in making future technology investments. Carriers can use the results to compare their current technology capabilities against what shippers are specifying as high priorities and then adjust their future technology plans to fill in the gaps.

John Wilson is an independent consultant specializing in the strategic use of information technology in supply chains and also a lecturer on transportation technology at the Center for Supply Chain & Logistics Management at York University’s Schulich School of Business in Toronto.

PRIORITY OF SYSTEMS INTEGRATION

PRIORITY IN MOBILE COMPUTING TECHNOLOGIES