The P's and Q's of Rail Rate Negotiation

Partnership

Develop relationships. One of the most important things you can do is to build a relationship with your railroad partners. Do the carriers consider you a customer or a partner? Encouraging the rail carriers to view you as a partner is helpful to a successful rail negotiation. From the local freight agent to the yardmaster to the switching crew, the sale representative to the vice president, from the customer service department to the commodity manger, there are many people with whom you should be acquainted. Though many of these positions may have been eliminated, try to maintain those that you can.

A great deal of current and pending regulation constrains the railroads. Determine ways in which you can help your carrier by backing legislation or initiatives that make sense. Get involved, offer your company’s support. Whatever regulations the railroads face will ultimately affect your company, so the more informed, involved, and supportive you are in the process, the better a partner you will be.

Preparation

Know your freight volumes. Most freight ships under contract rates, but that doesn’t mean that all freight does. If you ship a reasonable amount of volume, it is in your company’s best interest to pursue a contact with your carrier. Even a poorly negotiated contract is typically better than paying tariff rates. If you have enough freight to make a contract negotiation worthwhile, be prepared to invest the time, research, and effort to ensure the negotiation produces the best outcome for your company.

Know your industry. You certainly know your business, and you probably have a pretty good handle on your industry in general, but how do the rail carriers perceive your company as compared to competitors in your industry? Analyze your freight spend, determine patterns of shipments, and understand your private car vs. free runner equation (if applicable).

A common misconception is that rail pricing is a cost-plus strategy. In reality, rail carriers set prices based on the customer’s market health. A great example is the frac sand market. Frac sand is a premium sand used in oil/gas drilling. To the carrier, there is no difference in the overhead/cost of moving frac sand vs an equivalent car hauling raw sand, but frac sand rates are 20% to 50% higher because the railroad believes the oil and gas industry can afford to pay the premium.

Know about your competition. Are they rail-served? Where are their facilities located and, if they are rail-served, on which rail carrier? Is it easier for the rail carrier to serve your competitor than to serve your company? What is your competition’s market share? The railroad may be very interested in helping you grow your market share if it directly improves their market share versus their competition.

Know your railroad’s key drivers. Anticipate carrier positions and develop a sound negotiation plan. Know the increase that your carrier plans to seek, and determine what is driving it. Why is the railroad seeking an increase? Is there new investment or planned upgrade to track or terminal operations that will benefit your company in more expeditiously handling your freight? Is the railroad investing in new equipment that will help your company load/unload more efficiently or that will help improve load factor? Is the increase tied to rising interest rates or other global factors? Is the increase tied to the market, to interest rates, or is there something more involved?

Something often overlooked in a rail bid is the annual escalator in multi-year contracts. We’ve seen multi-year contracts signed with escalators as high as 8%. A $1000 rate with an 8% escalator would increase 36% over a 5-year contract. This compounded increase is frequently overlooked, but negotiating a lower escalator can be one of the best strategies for long-term cost avoidance. Try to negotiate the escalator to be in line with the All-Inclusive Less Fuel Index, which is an index of the rail cost adjustment factor without the influence of fuel cost. This is an industry standard for measuring rail operating cost adjustments over time (the index has shown an annual increase above 3% in 10 years – typically around 1.5% to 2.5%). In most cases, the escalator is never in line with the actual increases in annual operating cost.

Know when to employ Rule 11. With a thru-rate, the escalator in the contract applies to all segments within the thru-rate. Rule 11 allows the customer to negotiate each segment individually, which allows the customer to negotiate each the rate and escalator with each carrier separately.

While negotiations may seem weighted in favor of the railroad, remember that the rail carriers have massive infrastructures to maintain, fluctuating fuel prices, unions to support, economies of scale to manage, and modal competition to deal with. Like your company, railroads must deliver value to their shareholders and continue to draw investors. Know your carriers’ pain points: labor negotiations, weather and other acts of God, capital expenses, congestion and a physically constrained network, and government regulations are just a few of their concerns. What amount of resources has the railroad had to commit to PTC (Positive Train Control) and other government mandates? While at historically low levels, the operating ratio of most rail carriers is often higher than in other industries. Rail’s competition is primarily motor carrier, and while the motor carriers do pay highway taxes help to support the highway infrastructure, they have much less overhead allocated to physical plant. Without railroads, competition in other modes would most certainly increase and capacity would not be adequate, driving up prices.

Understand fuel surcharges, accessorial charges, 15-day payment terms, escalators and other factors that affect your total rail spend. You may do a terrific job of negotiating linehaul rates, only to find your company subject to other charges you hadn’t considered as part of the negotiation. This is a commonly overlooked piece of a negotiation. Remember that the freight rates should not be the only aspect of the negotiation. In many cases, the contract term, annual escalator and volume incentives yield better long-term results than the initial base linehaul rate.

It is very challenging (virtually impossible depending on the railroad) to get an established rate lowered. That’s why it is crucial to negotiate the lowest possible rate in the beginning and then work keep the rate low by limiting the escalator.

Know your options. Consider all options, not just freight rates. Are there areas in which your company can help the rail carrier? Be willing to offer concessions in exchange for something – is your company able to pre-block traffic, stagger switch times, eliminate weekend service, or otherwise assist the railroad in cost reduction?

Prepare a written bid package to present to the railroad. Your rail negotiation should be well planned and researched. Know your goals going in; this is not the time to shoot from the hip or to capitulate to general industry averages. Putting a written bid package together forces you to deal with facts and remove emotion. Calculate the railroad’s cost and profit for each of your lanes and educate the railroads when you believe they are not pricing their movements properly or competitively. Know the pivot point for each railroad in your bid evaluation. Negotiate your entire rate structure and not just individual movements—potentially be prepared to give something to gain overall.

Prioritize

Allow enough time, but don’t become overly consumed by the process. You still have day-to-day freight to manage and many other internal responsibilities. Does the tactical suffer at the sake of strategic or does the strategic suffer because of tactical demands? Some companies spend many months in negotiation, only to do it again the following year. It’s helpful to ensure that not all contracts expire at same time, and expiration dates in the middle of the month are often easier to manage since they don’t conflict with regular month-end reporting. Consider multi-year agreements if you are going to invest a significant amount of time in negotiation. Every hour spent on the process is an hour you don’t have to devote to other things. Many contract negotiations will go several rounds; do not be deterred or lose sight of your goals.  IntelliTrans can help manage your daily operations, freeing you up to spend time on stratetic matters.  Converely, we can partner with you to manage strategic efforts, including rail rate negotiaton, so that you can continue to manage your company's daily needs.

Predict

Establish a long-term rail transportation strategy. While it may be tempting to award freight strictly on price, remember that partnering with your rail carrier is a way to ensure viable modal competition remains. Where will your company be in five years, 10 years? Be honest about volumes and provide accurate forecasts. How much growth do you anticipate? Can the carrier handle the amount of planned volume increases with the current infrastructure and personnel? Develop a story for why you need a better rate structure to keep rail viable in the long-term. Just as you need to understand the factors driving your carriers’ request for a rate increase, make the case for why your company needs lower rates. What value proposition does your company bring to the table?

Always utilize expert legal counsel for the final transportation contract. As with any contact, be sure to use your company’s legal counsel before signing anything. Negotiation is your job, but the details belong to the attorneys. And, remember, the STB does not get involved in contract disputes, but does in tariff disputes.

Quantify

Once your negotiation is complete, continue to benchmark your performance. If having a contract rate in place is important, then so is following the stipulations of that contract. Undertake a thorough examination of tariff rates versus contract rates, as well as how well your company executes those contracts. Is your shipping department using the wrong junction or the wrong type of equipment? You may have negotiated the best rate possible, but if your shipping department doesn’t execute properly, your company has left money on the table and may be subject to unplanned and unnecessary fees and accessorial charges. Internal routing procedures and enforcement are required.  Our analytic dashboards make quick work of highlighting discrepancies and outliers. 

Questions

Ask questions; knowledge is power. Arm yourself with a thorough knowledge of rail industry standards regarding haul cost, rates, and agreements. Resources are readily available. IntelliTrans can provide multiple analytical dashboards for use in understanding your baselines, looking at your shipping history and options, as well as running different scenarios to determine your best-case outcomes from negotiations. In addition, our sister company DAT provides rate and capacity information on dry van, flat and reefer trucks for use in modal comparison. The railroads use this information themselves to benchmark their competition so it behooves any savvy negotiator to be operating from the same knowledge set. The amount of information available has never been greater, so equip yourself as well as possible.

Having the ability to undertake a modeling analysis will help you achieve the best possible results, however day-to-day duties may prevent you from being able to do so. Seek outside guidance where necessary.

IntelliTrans has many years of experience in assisting our customers with rail freight rate analysis, negotiation, and execution. We can share with you the successes we’ve had helping clients of all sizes – from small businesses to Fortune 500 companies. Because we track a very large portion of the North American rail volume each month we have an extraordinary view of the marketplace. Coupled with DAT’s truck rate benchmarking, we have an unprecedented view into areas of opportunity to help you conduct the best possible rail negotiation.

IntelliTrans can provide a cost/benefit statement that will help you easily see the value we bring to your specific situation and share some of our recent success stories with you. For more information on how IntelliTrans can help you achieve your most successful rail negotiation, visit our website at www.intellitrans.com or call us at (800) 551-8815.

Rail, Road, and Intermodal Freight

The Chartered Institute of Logistics and Transport in the UK - Gatwick Group meeting 2017

If the members of the Gatwick Group were unsure of what IntelliTrans and its parent company Roper Technologies Inc. actually did and where they fitted into our logistics and transport scene, James Reading their Account Director for the UK and Europe, soon put matters to rights during his presentation in February.  He started off by placing IntelliTrans, with its headquarters in Atlanta Georgia (the ‘freight capital’ of the USA) in the context of its American parent company, before explaining where his own field of responsibility fitted in.  IntelliTrans was founded in 1992 and acquired by Roper in 2006.  In the USA, 46% of the freight miles are handled by rail and, for goods with a low product cost and high volume, the freight costs are critical.  The parent company covers a wide range of activities from industrial technology, energy systems and controls, traffic and toll systems, to medical imaging and freight analysis.  RF technology is at the heart of much of what the company does, with its use for scanning vehicles on toll roads and for tracking every railway wagon in the USA.  The transport management systems and software services supplied by IntelliTrans fit very well into this overall picture.

The company’s European arm is responsible for transport, warehousing, procurement and automation technology.  Its offering is centered on ‘software as a service’ and covers areas as diverse as depot management, yard management and the monitoring and refilling of storage tanks and silos.

James Reading covered the UK rail freight business, which he said was in the middle of a process of substantial change, in some detail.  Traditional sources of traffic, primarily coal, are declining rapidly and rail’s overall contribution to freight movement is quite small, particularly by comparison with the United States.  However, at a time of increased environmental awareness it has to be recognised that rail produces 76% less carbon than road transport and that one freight train can take the equivalent of between 43 and 76 lorries off the road.  Rail freight volumes, other than for coal, increased by 58% between 1994/95 and 2015/16 and the rail operators are clearly both commercial and customer focused.  At the same time developments in the road freight industry should lead to a reduction in its carbon footprint.  Waitrose is introducing a fleet of CNG powered vehicles and Mercedes-Benz Trucks are launching a small series of all-electric heavy duty trucks, while vehicle platooning trials hold out the prospect of a 20% reduction in fuel costs due to improved aerodynamics.  Other challenges such as the shortage of lorry drivers and the high proportion that have been recruited from Eastern Europe in recent years still remain.

On the UK rail scene, freight volumes are holding up well, despite the reduction in coal and steel traffic, and substantial investment is taking place to support growth alongside the creation of more capacity in the network, including the planned construction of HS2.  There is an opportunity to grow aggregate traffic, including two way loading in some cases and, despite intermodal traffic through the Channel Tunnel having been hit by the migrant crisis, there is confidence that it will grow again in the future.  The arrival of a through freight train from China in January (an 18 day and 7,456-mile journey) points the way to the development of a link that would be both quicker than the seaborne alternative and cheaper than air transport.

The market is changing however, with the growth of internet shopping and next-day deliveries taking place alongside an increasing awareness of the need for carbon reduction.  Price sensitivity remains.  Road transport benefits from long-standing customer confidence, its high efficiency, well organised trunk network, flexibility and its ability to tailor loads to vehicle size.  In addition, chilled and frozen movements are important.  However, major food retailers, such as Tesco and Sainsbury’s, now see rail as an option, while shared trains are starting to be considered and deep sea multimodal freight can be well suited to rail in the right circumstances.  To increase rail’s share further, network capacity will need to be increased and the average speed of freight trains (reported to be less than 30 MPH) will need to be raised.  In addition, the main logistics consumers and providers and 3 PL planning teams will need to be given increased confidence in this mode.  Intermodal rail has, however, doubled in the last ten years with services to the UK main deep sea ports, 33 trains per day serving Felixstowe, 18 from Southampton and 8 from London Gateway currently.

James Reading explained how the GVP multi-modal transportation management software brought all the elements of ‘track and trace’, analysis, monitoring, management intervention and performance reporting together.  The example of IntelliTrans’ current work tracking 50,000 shipments each year for automotive companies with North American assembly plants was examined as was the role of the GVP iCargo Control Tower journey planning and booking system.  This latter system books shipments from origin to destination across different transport modes and compares journey options to permit a choice based on price, transit time and carbon footprint.  The detail behind these packages was particularly impressive covering everything from GPS position updates and Proof of Delivery to the scoring and evaluation of carriers against a range of standard criteria.  Multi-modal journey selection was a particularly impressive capability.

The discussion which following the presentation covered such matters as the differences of approach between British and continental rail freight operators; the potential for distributing beer by rail and the scope for rail to capitalise on the delays frequently found on the road network at present. The Chairman closed the meeting by proposing a vote of thanks that was warmly supported by all present and by presenting James Reading with a well-earned Speaker’s Certificate.

Written by John Baggs FCILT

Multi-Modal Transport Operations

The execution of end-to-end journeys with multiple transport providers.

Multimodal can bring benefits to all Logistics Consumers, particularly where transport cost is important.

For some freight movements, the use of multimodal transport can bring very measurable cost and environmental benefits with no detriment to customer service. Logistics consumers require route optimization, just-in-time supply chain operations, a secure environment and low cost transport. Control tower technology is an enabler to achieve shipment visibility and optimize inventory and assets in a congested environment. To provide optimum results the technology that supports a control tower must be specific to the company’s need.  IntelliTrans supports the seamless completion of journeys using more than one operator. IntelliTrans’ Global Visibility Platform is designed to simplify multimodal operations, covering the aspects of planning, execution and track and trace. Information can be sent to destination points and partner operators alike with real time updates on journey progress and the estimated time of arrival.

The use of multimodal transport can reduce transport costs and CO2 emissions while achieving a highly predictable delivery performance.  Achieving this reduced cost may involve complex planning and operational processes that can be overcome with technology that allows services to be tailored to needs.  Combining different modes of transport (sea, road, rail or inland waterways) to create a journey that meets cost and time objectives can provide a real competitive advantage. Technology that allows journeys to be planned and modes of transport to be synchronized with simple operational  control and paperless transactions is critical to successful utilization of multimodal transportation.

To transact multimodal transport the steps are easy to state but have been difficult to achieve:

  • Plan to create a journey that will satisfy the delivery time required by the customer.
  • Consider product characteristics, such as hazardous or temperature requirements.
  • Search from a number of available options to complete end-to-end services within the journey time allowed.
  • Calculate the overall journey costs and compare those with other routes.
  • Calculate carbon emissions for a journey.
  • Book all legs of the journey – a single point of booking with information entered only once is preferred.
  • Dynamically re-plan and re-book transportation based on real-time information (i.e., if a drayage move to port is going to be late, re-book the container on the next voyage).
  • Integration of information in the logistics processes to track progress and provide an ETA that can be shared as needed with parties involved.

These needs can be combined with other services such as  Proof of Delivery obtainment using IntelliTrans ePOD application and automated calculation of emissions at the shipment level.

See also http://www.intellitrans.eu/icargo-1/

Freight Brokers vs. Shipper's Agents

Transportation Services in the Age of Transparency

Brokers have their place in every shipper’s roster of available carriers and capacity. Brokers often fill the need for infrequent, one-off, unusual, and complex transportation services.  If a shipper doesn’t have the time or the means to find asset-based carriers to haul their business, brokers can help—but there is a cost. 

All shippers need a broker strategy. At a minimum, a shipper should have relationships with at least 1-5 brokers, have contracts in place with them, and have rates established where possible.  Shippers need to be careful to work out liability, payment terms, accessorials, and required minimum carrier quality standards in advance with their broker partners so they are protected from unforeseen and uncontrollable circumstances that may occur with their shipments.

Brokers are needed in the transportation marketplace. They fill the gaps between shippers and owner-operators and draymen, assist resource and technology-constrained shippers and trucking companies, help with capacity shortfalls, and innately provide transportation management outsourcing.

Brokers are in business for the same reason as everyone else - to make money. They earn their income by making connections and by knowing their market as well or better than anyone else.  Brokers live and die by information.  They use arbitrage and leverage between available truckload capacity and shipper demand.  When there are plenty of trucks around, brokers keep their fees to a minimum and work hard to put available capacity together with shipper needs.  When capacity is tight, everyone’s rates go up and their fees are higher because of the more difficult work in securing capacity and to increase their margins over time —sometimes resulting in significant markups over the actual cost of the truck.  It doesn’t take long for them to cover enough shipments to make a profit that offsets any losses or break-even shipments they covered when trucks were plentiful.  What’s interesting here is that these capacity tightening’s are often quite seasonal and occur with regularity—barring catastrophic events like hurricanes, major storms, etc.—yet, shippers always seem willing to pay the premium when capacity tightens.  Brokers can usually be assured that they will be able to make most of their annual profits come Produce Season, Fall Peak, and other regularly occurring surges of demand.

What makes a shippers’ agent different from a broker?

A shipper’s agent acts as an extension of your staff. Like your employees, they are measured by a combination of service, cost, and quality of work.  However, the shipper’s agent model minimizes your fixed costs, allowing you to not have to make difficult staffing decisions in either good times (difficulty in finding personnel) or bad times.  The transparency that is possible with this model also allows you to see exactly how well your partner is doing in terms of providing the shipper’s agent services, and potentially allows you to change the level of services provided without having to make a technology change.

A company like ours, IntelliTrans, augments the shipper-broker-carrier relationship and provides complete transparency. Transparency to rates, pricing, capacity, and throughout the entire supply chain.  We provide accurate, easy-to-access metrics, and we give our customers a clear picture of their freight in the marketplace.  Our pricing is tied to services provided and value delivered and is on a per-shipment basis, making it purely transactional—if your shipment volumes fall, so do your costs for the service.  Our success is enabled by our team of career professionals, using honed business processes, and the robust performance of our Transportation Management System, CarrierPoint, that provides the underlying infrastructure we use to perform these services.

You can rest assured that we work hard to manage your freight regardless of the season or state of capacity in the market. Rather than take advantage of limited truckload supply, we work on your behalf to keep your costs as low as possible by making sure we effectively manage the commitments you have in place with your carriers and avoiding having to pay higher fees during periods of high demand and low supply as much as possible.

IntelliTrans is looking to form long-term trusted partnerships with our customers and earn our fees based on the quality of services we provide and our ability to innovate. You can depend on us to come up with creative, technology backed solutions to your freight challenges.

Our Approach.jpg

VMI: Power in the Background

GlobalVMI screen shot.jpg

Sure, you've heard of it.

Vendor Managed Inventory (VMI) has been heralded in many industries, including automotive, consumer products, retail, and more recently healthcare and pharmaceuticals. However, the use of this tool spans wider than just those industries and there are a multitude of applications based on specific industry needs. For example, most companies that use the IntelliTrans Global VMI solution primarily produce or consume chemicals, plastics, and oil & gas products. Regardless of the industry, successfully implementing VMI will require senior management "buy-in", collaborative mindsets and trust, great technology, and the ability to rethink the traditional ordering process. Without these essentials VMI initiatives often fail. If those basic building blocks are in place, you are set to reap the rewards: improved inventory turns, service, and sales.

Although there are a multitude of applications for VMI, supplier managed inventory, continuous replenishment, CPFR, or whatever you choose to name it that day, the principles remain the same; electronically send demand information to suppliers and let them generate replenishment orders based on that demand and mutually agreed upon objectives for inventory levels, fill rates, and transaction costs. Sounds easy, right?  Not exactly. VMI needs can vary even across your own supply chains, so it’s essential that you consult VMI experts with supply chain expertise specific to your business.

A VMI solution should be tailored to meet your needs.  If you have a short lead time supply chain with relatively simple replenishment logistics, then your solution should allow you to set high, re-order, and safety stock inventory levels, obtain readings multiple times per day, and allow alerts sent to the customer service team to drive order fulfillment.  This will ensure the customer always has enough product, while the supplier always has enough lead time to fill the order using the desired mode & transport carrier.

Consider too the lifecycle of VMI solutions.  Providers of reliable solutions will seek a long-term relationship, offering service that includes a hardware warranty for the LIFETIME of your agreement. 

Look for automation that goes beyond measurement.  Game changing VMI will have the capacity to integrate electronic order creation and send replenishment orders directly from the VMI system to your ERP system.  Such solutions will exchange the necessary purchase order information to create the transaction, and then monitor quantities delivered against that purchase order.

Have a longer lead time in your supply chain?  Integrated Collaborative Planning, Forecasting, and Replenishment (CPFR) solutions integrate a demand forecast, silo inventory, and in-transit inventory tracking to provide a forward-looking replenishment plan.  This allows the creation of orders with enough lead time to use the preferred mode of transport (i.e., rail) and carrier instead of having to rush orders in higher-cost modes.

What all this means is that the supplier has a lower cost-to-serve their customers, the inventory at the site is maintained at a lower level than before, and the relationship between supplier & customer evolves from transactional to strategic.

IntelliTrans provides a unified and proactive way to integrate shipping and inventory needs across all modes of transportation, especially rail, truck and intermodal.  Our world-class GVMI solutions leverage sensor technology and six sigma data analysis to help customers lower cost and maximize efficiency in their supply chain, and meets all of the aforementioned requirements, from availability of Supply Chain experts to an integrated CPFR solution.  Contact us to learn more about how we can help you do the same.

Further Reading & References

https://www.intellitrans.com/gvmi/

http://scm.ncsu.edu/scm-articles/article/vendor-managed-inventory-vmi-three-steps-in-making-it-wor

Rate & Pay

Transportation Spend

Transportation is a primary cost driver for many companies. Research from Accenture shows that transportation represents "upwards of $30-$60 million for every $1 billion in material cost for product-based companies". Besides the enormity of transportation costs, there is also an astounding amount of cryptic invoices and inaccurate billing floating around. This means auditing procedures that ensure accuracy spell big savings. While freight payment seems like a single function, there are many elements that freight bill payment and auditing services uncover such as automating labor-intensive processes and most importantly, giving customers the data to focus on true savings opportunities.

Automating Freight Audits

Automated freight auditing and payment services can save companies time and money. However, it is important to not only find a system that audits and pays freight, but one that can also match a multitude of variables. The matching process is one of the most important functions of any bill audit and pay system. Ideally, you will want a system that matches invoice rates to specific contracts or tariffs, while handling multiple pricing conditions such as rates based on car type, owner, and net weight. Additionally, the system should also match invoice fuel surcharge rates and mileage to shipment rates and lane mileage in a data repository. If you are dealing with rail shipments, it will also be important to find a system that matches invoice shipments to their corresponding waybills.

Lastly, the system should be a one-stop shop for the payment process. Companies should have the ability to electronically transmit (via EDI) approvals to a payment system. Reports listing approved invoices in a shareable format should also be made available. 

Analytics & Reporting

Conducting analysis on historical spend data will lead to major insights as to where the most money can be saved, so it is important that your system acts as a single repository for all freight invoice data that can easily be analyzed. Some systems can also present activity-based reporting by cross-referencing active shipments with contract rates and current invoices, which can help pinpoint the greatest areas of improvement. 

Conclusion

Don't underestimate the benefits of automated freight payment and auditing. Easily catching billing inaccuracies and analyzing historical invoices could lead to an array of savings lurking just beneath the surface.  Please contact us today to see how IntelliTrans can help you with your freight rating, auditing, and payment needs.

IntelliTrans - A Partner In The iCargo Project

What's iCargo?

A project where IntelliTrans and other partners are helping to build an open, affordable information architecture that allows real world objects, existing systems, and new applications to efficiently co-operate, enabling more cost effective and lower-CO2 logistics through improved synchronisation and load factors across all transport modes.

The iCargo project aims at advancing and extending the use of ICT to support new logistics services that:

  • Synchronize vehicle movements and logistics operations across various modes and actors to lower CO2 emissions
  • Adapt to changing conditions through dynamic planning methods involving intelligent cargo, vehicle and infrastructure systems and
  • Combine services, resources and information from different stakeholders, taking part in an open freight management ecosystem.

What this means for our customers is that they will have a seamless process for booking the optimal multi-modal route for their orders, taking into account cost, transit time, and carbon footprint reduction.

To learn more please visit the iCargo website.

Freight Management Savings Case Study

Goal

Large manufacturer sets a target of $2.5M in annual implemented savings established, with a longer-term objective of delivering at least $7.5M without structural changes.

Discovery

IntelliTrans engages in a detailed discovery process with the customer to understand all aspects of their distribution, transportation, and warehousing, including:

  • Analyzing the high-level, current state of all aspects of the company's logistics functions.
  • Sizing potential opportunities in a rational priority.
  • Generating high-level, future road map.

Execution

  • Least-cost carrier selection
  • Modal conversion and selection
  • Warehouse optimization
  • Fuel surcharge management
  • Detention & demurrage management
  • Invoice auditing
  • Dedicated operations for local and short haul markets
  • Truckload and rail carrier benchmark and RFQ management
  • Continuous moves and dedicated routes
  • Order consolidation
  • Optimal sourcing - Inbound and outbound
  • Network optimization and redesign

On-Going Freight Management

    Real-Time Support - compliance management and carrier commitment management

    • EDI integration and support
    • Carrier approval and training
    • Monitor lane allocations, contract carriers, rates, tendering, interfaces and diagnostics

    Analytics and Metrics

    • Least-cost mode and carrier utilization
    • Monthly KPIs - mill, mode, carrier
    • Rate benchmarking using TransCore Rate Index tools to ensure competitive rates
    • Reports are available for all shipments, regardless of the mode, in IntelliTrans GVP

    Ad-hoc Projects

    • Bids and RFQs – all modes
    • Rate analysis – all modes
    • Fuel surcharge audit and analysis
    • Extend KPIs to include next level of analysis on shipments:
      • Reason codes on deviation from plan
      • Definition of technical limit based on negotiated rates and market indicators
      • Load factor by equipment type
      • Optimal mode analysis

    On-site Implementation and Training

    • Weekly visits to facilities to meet with personnel
    • Support and analytics
    • Training and compliance expectations
    • Monitor to ensure continued realization of prior savings across all facilities
    • IT testing / integration to ensure swift and high-quality implementation
    • New development / features
    • Trailer pool and equipment tracking and utilization

    Result

    Total Annual Savings: $12.4MM - almost $10MM more than expected!

    TransCore selected by New York City’s Metropolitan Transportation Authority Bridges and Tunnels to deploy All-Electronic Tolling system

    “As we begin to utilize AET technology, our key goals remain to increase mobility for our customers while collecting tolls in a highly accurate and auditable manner. Selecting TransCore enables us to achieve these goals through the use of industry-leading toll collection technology”

    NASHVILLE, Tenn.--(BUSINESS WIRE)--The Metropolitan Transportation Authority Bridges & Tunnels (MTA B&T) has selected TransCore to deploy the agency’s first All-Electronic Tolling (AET) system. This system will be implemented on the historic Henry Hudson Bridge.

    Built in 1936, the iconic bridge provides passage for more than 63,000 vehicles each day. The AET project is part of a three-year, $33 million MTA B&T bridge rehabilitation project to replace the original 1930s steel supports as well as install 3,600 feet of new bridge decking, new energy-efficient roadway lighting, and wider traffic lanes.

    The objectives of the AET project are to:

    • Provide an efficient, cost-effective, revenue-secure AET system that is flexible, expandable, and adaptable
    • Increase driver mobility and safety by eliminating the need for drivers to slow down or stop at tolling plazas
    • Provide drivers with an accurate, secure, and seamless means to automatically pay tolls
    • Reduce auto emissions and increase fuel consumption

    “As we begin to utilize AET technology, our key goals remain to increase mobility for our customers while collecting tolls in a highly accurate and auditable manner. Selecting TransCore enables us to achieve these goals through the use of industry-leading toll collection technology,” said Robert Redding, senior director, New Toll Initiatives, MTA Bridges & Tunnels.

    TransCore will deploy its Infinity∞ Digital Lane SystemTM for the MTA B&T. Because the MTA B&T ranks as the largest toll agency in the United States, the requirement for this AET system to capture every transaction in a highly accurate and auditable manner was a critical aspect in the technology selection process. The Infinity system integrates automatic vehicle identification, vehicle classification, and video capture and recognition systems specifically designed to automatically collect transactions in high-volume traffic across a wide variety of traffic speeds and patterns with the highest degrees of accuracy in the industry. Infinity’s fully integrated digital video audit system also provides MTA B&T auditors with a real-time, user-friendly tool to facilitate true end-to-end revenue traceability and auditability.

    “The MTA B&T has long been recognized for their ability to get the most out of their infrastructure investments while providing safe, reliable and efficient passage for the users of their facilities. We are excited to partner with them to implement this state-of-the art project on such a historic facility. Both MTA B&T and TransCore share a common goal to continuously enhance the mobility of our customers through the deployment of innovative solutions,” said Whitt Hall, senior vice president, TransCore.

    About MTA Bridges and Tunnels

    Created in 1933 by Robert Moses, MTA Bridges and Tunnels serves more than 800,000 vehicles each weekday — over 280 million vehicles each year — and carries more traffic than any other bridge and tunnel authority in the nation. Surplus revenues from the authority’s tolls help support MTA transit services.

    MTA Bridges and Tunnels bridges are the Robert F. Kennedy, Throgs Neck, Verrazano-Narrows, Bronx-Whitestone, Henry Hudson, Marine Parkway-Gil Hodges Memorial, and Cross Bay Veterans Memorial; its tunnels are the Hugh L. Carey Tunnel (formerly Brooklyn-Battery Tunnel) and Queens Midtown. All are within New York City, and all accept payment by E-ZPass, an electronic toll collection system that is moving traffic through MTA Bridges and Tunnels toll plazas faster and more efficiently. Eighty-one percent of the vehicles that use MTA Bridges and Tunnels crossings on weekdays now use E-ZPass.

    MTA Bridges and Tunnels is a cofounder of the E-ZPass Interagency Group, which has implemented seamless toll collection in 14 states, including New York, New Jersey, Delaware, Illinois, Indiana, Maine, Maryland, Massachusetts, New Hampshire, Ohio, Pennsylvania, Rhode Island, Virginia, and West Virginia; tolls are charged electronically to a single E-ZPass account.

    About TransCore

    A leader in the transportation industry, TransCore provides innovative, technical solutions and engineering services for applications encompassing next generation Open Road Tolling, Traffic Management Systems and Radio Frequency Identification systems that secure access for airports, hospitals, parking garages, border patrols, trucking fleets and rail carriers. TransCore also operates tolling customer service centers for departments of transportation throughout the U.S., Puerto Rico and Dubai.

    Based in Nashville, Tenn., TransCore is a wholly-owned subsidiary of Roper Industries, a diversified technology company in the S&P 500, Fortune 1000 and Russell 1000 indices.

    Our Truck TMS Integrates with North America's Largest Freight Match Service

    Our web-based truck transportation management system (CarrierPoint) is fully integrated with TransCore's flagship DAT® freight match products, enabling shippers and third-party logistics providers (3PLs) to use a single system, not multiple systems, to manage contract freight, private fleets and spot market moves.

    By coupling our TMS and DAT freight match service, which processes more than an estimated 4.6 million load postings per month, we simplify and reduce the number of steps necessary to tender a load. Instead of having to open several applications, a shipper can now open a single frame and view all the necessary information with immediate access to various functions.

    “This enhancement fulfills a fundamental component of our acquisition strategy to merge disparate systems and reduce inefficiencies in transportation systems,” said the president of TransCore. “In a market where capacity is scarce, this simplified design will allow shippers and 3PLs access to a vibrant spot market and increase their asset utilization. Likewise, brokers will have greater capacity selection.”