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JOC Uncharted: Digitalization will reduce LTL costs, improve service

Pitt Ohio says more shippers are interested in digitizing their supply chains, eliminating the exchange of paperwork at docks, because of the COVID-19 pandemic. Photo credit: Ari Ashe.

Less-than-truckload (LTL) shippers concerned with costs and customer service should examine whether they are fully integrating technology to eliminate inefficiencies and extra labor costs in their supply chains, analysts and transport executives told JOC Uncharted this week. 

“With a TMS [transportation management system] connected to your ERP [enterprise resource planning] system, you’re going to find efficiencies right away at your warehousing level,” said John Conte, founder of Conte Logistics Consulting. “All you have to do is scan a barcode, type in a purchase order number, or sales order number, and it’ll pull from your ERP and populate everything needed for a bill of lading to be generated.”

He added that digitization is more important now because fewer employees are working in centralized offices during the COVID-19 crisis.

“If you have a distribution center in Portland, Oregon, and your headquarters are in New Jersey, you have accessibility when a digital supply chain is implemented,” Conte, former director of logistics and operations for automotive manufacturer Holman Enterprises, said in the JOC Uncharted webcast. “You are going to need to be able to run locations, regardless of where they are located geographically, as efficiently as you would if you were right there on the ground on the spot.”

Getting data to customers directly

Pitt Ohio, a Midwest-based LTL carrier, has found the COVID-19 pandemic is causing shippers to prioritize digitization projects with remote working given the health risks associated with coming into close contact with another person to exchange paperwork.

For the last two years, Pitt Ohio has made eliminating paper bills of lading a primary focus, an effort that takes on additional value when many companies are looking to cut costs to offset lower-than-expected revenue due to pandemic-related shutdowns. The carrier argues that digitization can help shippers identify delays earlier so they can quickly contact receivers.

“With digital bills of lading, we can provide them ‘shipment-in-jeopardy’ updates explaining that — unfortunately — this shipment is delayed and is one scheduled for delivery the next day. It’s not good news, but it’s better to find that out on the front end, notify your customer accordingly, and manage expectations as opposed to only finding out when your customer calls to complain,” Geoffrey Muessig, Pitt Ohio chief marketing officer, told JOC Uncharted.

Shippers have told JOC.com quality customer service is just as valuable as reducing costs, especially during a pandemic in which receiver docks are operating with limited hours and resources, as well as personnel that are social distancing.

Shippers with digital service records can track which LTL carriers perform well and which are below par, especially those using a TMS linked to an ERP.

“If you don’t have a digitized platform, you just kind of go by gut reaction about how many times the customer complained that a shipment didn’t deliver on time. With digitization, you are able to proactively manage and score your carriers,” Conte said.

Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe.