October 1, 2003, 12:00 AM

Retailers take control of inbound shipping with web-based systems, AMR says

In a role reversal for many retailers and suppliers, more retailers are taking control away from suppliers in the shipment of goods to their distribution centers and stores, thanks to the growth of web-based transportation management systems, AMR says.

Kurt Peters

Executive Editor

In a role reversal for many retailers and suppliers, more retailers are taking control away from suppliers in the shipment of goods to their distribution centers and stores, thanks to the growth of web-based transportation management systems, John Fontanella, an analyst with AMR Research Inc., tells Internet Retailer. “Retailers are taking control of inbound freight, instead of letting suppliers route it and control costs,” he says. “It’s a real reversal of operations.”

Web-based transportation management systems give retailers real-time visibility into what’s being shipped, often even before products are loaded onto a truck, Fontanella says. By being able to view actual shipment data with the original purchase orders as well as store inventory data on a single web page, retailers can make quick decisions on re-routing shipments in the most efficient manner to get the right products to the right stores, he adds. In turn, this is giving merchandise managers more control over how they can manage promotions and in-store stock, he adds.

Fontanella says that many retailers up to now had controlled a small percentage of inbound shipping, but now are shooting to control about 70%. The sharpest increase in control is occurring among retailers in the grocery industry and among retailers who import from the Far East, he says.

Fontanella figures that retailers with annual freight costs of at least $8 million can receive a fast return on investment by implementing a web-based transportation management system. “I’ve seen paybacks in as little as six months,” he says.

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