Web-based transportation management drives up issue of who controls freight

With web-based transportation management systems making it easier for multiple parties to share information on shipments, some retailers are wresting more control of freight. But the road to control still has potholes, Jeff Woods, a transportation systems analyst for Gartner Inc., tells Internet Retailer.

Retailers and suppliers are engaging more often in projects designed to provide the greatest efficiency in the way goods are loaded on trucks and routed to retailers’ distribution centers, experts say. While one goal is cost savings, often the primary objective of retailers is to gain more control over the way shipments are carried and routed in order to gain more assurance that the right goods are delivered to the right stores at the right time, particularly when merchants try to coordinate shipments with special promotions.

"Retailers are setting more delivery requirements and bumping them up," says Dan Dershem, CEO of Lean Logistics, which hosts web-based transportation management systems for retailers and suppliers, including Meijer, Dean Specialty Food and PepsiAmericas.

But retailers don’t necessarily have to be the ones choosing carriers, coordinating truck loads and figuring the best delivery routes for trucks heading for multiple locations, he adds. By participating in a web-based transportation management system that lets them see near-real-time status of shipments and plans for shipments –- with status inputs from carriers as well as manufacturers -– retailers as well as their suppliers and carriers can better work around unexpected disruptions, Dershem adds.

But getting the most benefit out of these systems still requires a level of business procedures that many retailers have yet to perfect with their suppliers and carriers, says Woods. "Retailers will gain a little more confidence in their ability to get products delivered on time and avoid out-of-stocks, but out-of-stocks are random events with too many variables. It’s still hard to say what caused them."

One common problem in operating transportation management systems, he adds, is dealing with bad data often input by carriers related to shipments. "Over the long term, retailers and suppliers and carriers will get better at using these systems," he says. "But often the first benefit they get from the extra visibility is learning how bad some of their data is."