Grow Your Transportation Business Through Partnership
“You’re only as good as your word”, this simple expression has sat at the heart of the business of transport for millennia. Today, thousands of businesses in the transportation business sector are relying on potential competitors to keep their word to their own customers. The results from doing it though are compelling. Organizations using services like CX North America are reducing their empty running miles from an industry average of 29% down to typically 9%* which is boosting their bottom line as you would expect.
A Brief History of Trust
At its core, the transportation sector has always relied on trust. The customer trusts their freight will be carried safely, securely and on time and the carrier trusts they will be paid. However, over time, a single carrier frequently became a luxury. Economics and increasingly demanding customers have meant that transport companies, carriers, sub-contractors, brokers and other specialists have needed to work together building what has become known as ‘trust networks’. These too have been around for centuries (for example the Venetian shipping alliances of the Renaissance period) but how do you build trust with companies you’ve never met, who may also be your competitors in other circumstances?
Different times call for different solutions, we can no longer afford the luxury of cozy guild houses and handshakes. With issues like driver shortages, elasticity of resources, seasonality, and wafer-thin margins trust networks are now having to be built ‘on demand’, spanning geographies and specializations at a click or tap. In response to this, a new class of service evolved around the start of the millennium. Organizations looked to focus not on carrying (or selling carriage) but on helping transport professionals build, operate and extend their trust networks.
Technology Fix or Essential Business Process?
At the core of such a service are three key transport areas that need to be met. Advanced technology plays an important role in this but essentially it is all about good, agile business processes.
These are:
Location, Location, Location
Unsurprisingly the single biggest classes of services is based on being able to match work to resources, in ‘real-time’. Transport Exchange Group uses a technology called S.C.A.L.E. (Smart Context and Location Engine) to integrate over a dozen different telematics provider feeds with their own apps, member data and even TMS integrations to do this.
Best Practice Working
A mistake often made in the technology industry is to assume that there is just one way of doing things (usually the one closest to the technology vendor’s product!). In a mature and highly professional industry like transportation, there are often multiple, equally valid ways of doing things. As a result, it is essential that any services looking to build and sustain networks can accommodate these different ways of working. If the customer demands a paper POD then there is little point putting them in touch with an e-signature only carrier!
Mobility
Continuing with the theme of supporting different ways of working, modern collaboration needs to explicitly support work on the move. Whether it is apps, secure messaging or just end-point support (smartphone, tablet, desktop etc).
The ‘Self-Interest’ Police
So, what makes would-be competitors ‘play nicely’ together? The simple answer is self-interest. When trust networks reach the size of CX North America, the value to members collaborating starts to far exceed the potential short-term benefits of poaching a customer or undermining a competitor. When the ratio of subscription cost to revenue generated for a member exceeds 10x self-interest becomes the perfect ‘police’.
*Average Haulage Exchange/Courier Exchange member empty running level for 12 months to 31st July 2016