International Transportation Services Are Changing – Are You Keeping Up?
By: Sheila Hewitt, Vice President, International Logistics, Transplace
International logistics services have changed over the last few years and are continuing to evolve. The change has been customer driven, and is due to many of the major global players letting their infrastructure lapse in keeping up with the demands of the global supply chain. When it comes to international logistics, there are a number of separate entities involved on both the import and export side, and there’s not one cohesive location managing everyone as well as all the data involved. Until recently, where we’ve been able to connect and manage all the dots. Due to the nature of our business, we’ve been able to step in and handle all of these relationships and processes, upping our international services game.
The Importance of Infrastructure
The lag in keeping infrastructure current comes from these large global players having a much lower budget and resource pool on international transportation spend vs. what their domestic spend is (oftentimes tens of millions of dollars vs. hundreds of millions of dollars). Why? The risks are greater with international transportation, and sometimes so is the cost. Companies are always looking for a way to drive out cost and incorporate efficiency, and when it comes to international transportation, they look at reducing actual first cost with ocean freight, and procurement is a way to do that. Extra costs are the result of a poorly executed supply chain. Our goal is to serve as a single source to allow these global players to be able to make decisions based on unified visibility and actionable data.
The IT infrastructure is critical to the global supply chain and serves as the foundation for a solid logistics program. From our point of view, there are three parallels of the global supply chain:
- Physical movement of cargo
- Data associated with the movement of goods
- Actual documentation associated with the movement of goods
When you have multiple parties involved, the common denominator is being able to report on all three of these – physical, data and documentation – moving in sync. If it’s out of sync, there are fines and additional costs involved, so IT infrastructure is fundamental to your logistics program. All three are codependent and equally important, and you can’t have one without the others. More importantly, you don’t want to automate a bad process. The first thing you do is build a solid process design and then the IT is structured around that. By collaborating with our global customers, we make sure we have the right process design in place that meets all the needs within the reorganization and then structure and build the IT to properly support the design.
International Services with Transcending Benefits
The value of providing international services has extended reach. For example, because these global players are often so large, there are cross-functional groups that touch international and overlap in processes. There are communication gaps and redundancies in roles and responsibilities. By applying our lean principles to our international services and design, we can help identify which ones can be eliminated, improved or automated. We can do an overview of groups across functions and see these gaps as well as the opportunities, and then implement the changes needed. It’s important to note having change management support within the organization can help make it all the more successful.
From a risk standpoint, regulatory compliance is a critical part of an international transaction and is at the core of the process design and IT infrastructure. It’s of the utmost importance to have all of this information and to be on top of it. Another benefit has to do with exception management. We’re relieving the decision making process for management by delivering to them more information around key performance indicators (KPIs) including meaningful reports from a strategic procurement standpoint. We have the ability to arm decision makers with enough data to demonstrate whether their international transportation plan is on track or if they need to get back on course.
International Services Reboot
Currently, there’s no one system on the market that does end-to-end management of all the international transportation services needed. Yet, we have the tools to facilitate strategic procurement, RFP exercises as well as maintain all of those contract rates to create an electronic routing guide in a database so that everyone involved can see the data. By showing inventory in real time, you can plan for real-time scenarios. From purchase orders and execution all the way through to track and trace, by automating processes and evaluating data, customers can obtain real-time visibility and save time. No more logging onto carriers’ websites to track a system, it’s all automated and up-to-date. How about that for the latest international transportation services?
Is it time to reexamine your international services?