However, the real back end of trucking requires complex logistics planning and management to coordinate the fleets of trucks and other transportation resources used to move materials among businesses. E-business applications are beginning to transform these systems and promise to improve the efficiency in distributing billions of tons of goods.
In the next few years, Internet-optimized logistics are likely to have a significant effect on enterprises that rely on transportation to ship and receive large amounts of material. Here's how e-business applications are changing four areas of transportation management and how these changes stand to benefit your company.
Designing, buying efficient shipping routes
Enterprises can save money and reduce the risks of buying transportation resources by coordinating the design of their truck routes over the Web. It's expensive to buy single truck shipments so companies that ship a lot of goods usually buy tours--regular routes such as a weekly run from Atlanta to St. Louis to Chicago. Companies can garner more route options at better prices by collaborating with other companies. Nistevo sells software that provides truck route visibility across a network of participating companies (which might even be competitors) so they can work together in a secure environment to optimize their shipping networks.
Managing shipping deviations
When trucking carriers decline a load, finding an alternative carrier that meets the enterprise's shipping requirements can be a time-consuming process. Companies usually end up spending hours checking out possible carriers one by one and waiting for responses via fax and phone. The problem is compounded by the fact that, as the actual shipping time approaches, fewer alternative carriers are available and prices are higher. Enterprises can reduce the time, cost, and frustration of dealing with carrier deviations and shipping changes by using asynchronous load tendering tools. "These tools let shippers simultaneously bid out jobs to multiple carriers while defining necessary service level requirements," says Jeff Woods, a senior analyst at the Gartner Group.
Reducing costs with online procurement
Transportation procurement is another area where enterprises can save time and money by collaborating over the Internet. Traditionally, companies evaluate complex transportation options by faxing or e-mailing spreadsheets to shipping companies--a time-consuming and error-prone process. Vendors such as i2, Logistics.com, and Manugistics provide collaborative procurement software that automates the bidding and procurement response processes and integrates with supply chain execution software.
Using Web services to facilitate transportation management
Looking over the horizon, transportation management would appear to be a natural for Web services technology. Trucking is a complex and volatile business that requires coordination among multiple enterprise buyers, shipping companies, and trucking carriers. By most accounts, Web services technology is well-suited for providing collaborative applications with the kind of flexible and dynamic linkages needed to manage time-sensitive data and business processes among multiple trading partners.
However, the common application of Web services technology for transportation management is probably several years away. "It's going to be a long time before the Web services metaphor is employed in supply chain management," says Woods. Gartner expects that--due to the immaturity of B2B collaborative commerce tools and the convergence of supply chain management tools--fewer than 20 percent of supply chain execution applications will be deployed using Web services for dynamic systems interoperability through 2005.
Although it will be some time before transportation networks are fully optimized for e-business, enterprises should begin to investigate nascent collaborative logistics tools. Don't forget to factor into your long-range IT plans the potential application of Web services in transportation management.
Trucks will continue to be a familiar sight on freeways, but your business should be ready to take advantage of the major changes and efficiencies likely to take place behind the scenes.
How do you think e-business applications can improve transportation management? E-mail Adrian or Talk Back below.
