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Real Stories of Supply Chain Agility – Part Nine

Mahesh Rajasekharan
Transportation Company Builds Resiliency

Every day, on calls with Cleo customers, I am learning first-hand how leading supply chain-driven businesses are adjusting to the COVID-19 pandemic. In this blog series I share insights about how companies in various industries are responding. Their agility is remarkable, and something we can all learn from. Hope this helps everyone think differently.

Blog #9 – Transportation Company

I recently had a fascinating conversation with one of our customers, a large global transportation company with market leadership in less-than-truckload (LTL), flatbed, and expedited transportation services. This company is doing extremely well in the face of COVID-19.

On exploring the factors behind its success despite the challenging business climate, I realized that they have built resiliency through an exceptional blend of three different key areas:

1. Business Model Innovation

2. Customer Service Excellence

3. Investments in Integration Technology

The company’s strategy with these three pillars has accelerated its transformation into a digital enterprise that has allowed it to better manage the current crisis.

Business Model Innovation

Due to its well-established leadership in LTL, the company realized that while the traditional LTL sector that’s largely been focused on supporting manufacturers is still strong and growing, and with higher prices, there is explosive growth in retail and e-commerce with direct home delivery. Given this insight, company leadership decided that pursuing more e-commerce, shorter haul, final-mile type moves would be a prime fit to drive growth.

This led to the introduction of a new business unit focused on providing a comprehensive transportation solution with a blend of full truckload deliveries from shippers to its distribution centers as well as smaller shipment, “last-mile” deliveries to job sites or homes, to complement its LTL core business. With the new business unit, the company witnessed rapid growth in excess of 50% and that growth is continuing to increase.

In addition to reaping rich rewards with its new business unit, the company is also innovating its traditional LTL business by adding a set of expansion services to maximize its share of wallet with its customers. Essentially, this company is pioneering two additional, complementary revenue streams to achieve market share growth and profitability:

  • LTL Business:

Expand traditional LTL with a full-service approach, i.e., adding flatbed, expedited services, drayage, as well as pursuing opportunistic add-on acquisitions. The company can offer a variety of services and win more market share as a full-service transportation company with a global footprint.

  • End-to-End Transportation Solution Business:

Introduce a new business unit dedicated to providing a comprehensive transportation solution, including the coveted last mile, by pursuing dedicated accounts. For example, for retailers, given the explosion of warehouses moving closer to demand points for same day delivery, it can handle both LTL to the warehouses, as well as lightweight, smaller shipments, to the stores as well a final mile to homes.

For manufacturers, it is an attractive option because it can consolidate and reduce transportation costs by shipping truckloads to a central location and from there sending smaller shipments to the various manufacturing sites. Ultimately this reduces the company’s expense and delivers results to the customer faster compared with the traditional LTL approach of sending a single truck to each of the sites.

Customer Service Excellence

Our customer’s leadership also recognized that providing exceptional service can be a core differentiator in the transportation business. Based on its multi-decade culture of caring deeply for its customers and building trust in the way it conducts business, the company had the ideal underpinnings to formulate a customer-focused Top Accounts sales strategy, rather than purely focusing on selling freight.

Today, it is rapidly winning new customer accounts instead of winning just the freight business, which has allowed it to further expand its overall business by way of these top accounts. By focusing on end-to-end customer service rather than individual SLA metrics, for instance, it is building a vibrant transportation solution business where customers are adding new service lines with it in a predictable manner.

Integration Software Platform as a Competitive Differentiator

Historically, most transportation companies only rely on EDI to integrate with their shippers and carriers. What this company realized, however, is that, from its customers’ perspective, increasingly moving data is considered even more important than delivering on freight. With this realization, it set out to differentiate itself by investing in an ecosystem integration platform so that it can provide a blend of EDI and API for load tenders and invoices, APIs for status notifications, XML, and even email where requested to provide exceptional SLAs for all its supply chain processes.

The company’s robust and flexible ecosystem integration platform has allowed it to deliver on three capabilities far better than most transportation providers in the market today:

  • Rapid onboarding of shippers and carriers
  • End-to-end visibility for the entire load-tender-to-invoice process
  • Relying on one integration platform to wrap around purpose-built mainframe TMS systems with modern financial packages and provide EDI and API integration across shippers and carriers to efficiently capture load tenders as well as provide real-time freight visibility

The continued success of this global transportation company is a true example of the power of resiliency in a company’s business strategy and execution. By building in resiliency through their three pillars described above, this Cleo customer has pivoted and expanded via its business units, has better control over its existing and new revenue streams, and has more confidence in its integration platform. Plus, the company’s customer driven culture has allowed it to make these strategic investments proactively in anticipation of the evolving needs of its customers.

As always, please reach out to me here on LinkedIn with any questions or comments that you might have. And refer to Cleo’s COVID-19 FAQ guide for more suggestions to help you navigate these difficult times.

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