This Week in Logistics News (August 18-22, 2014)

As you read this, I am driving back home from Niagara Falls, where I spent a few days with my extended family, including my in-laws who were celebrating their 50th wedding anniversary. After two weeks of beaches, waterfalls, driving, and ice cream after every meal, I am officially vacationed out.

Niagara_Rainbow

With very little time before I hit the road, here’s the news that caught my attention this week (and a couple of items from last week too):

The big news this week was the strategic alliance between Trimble (parent company of TMW Systems) and 3Gtms. According to the press release:

The alliance includes an equity investment in 3Gtms by Trimble and a commercial reseller agreement with TMW Systems, part of Trimble’s Transportation and Logistics Division. 3Gtms offers 3G-TM planning and shipment management software that will be marketed by TMW Systems as part of its transportation solutions portfolio.

Since I was out of the office this week, I haven’t had a chance to speak with anyone at either company. A couple of years ago, however, I presented at the TMW Systems User Conference, and I wrote about how the company was working to enhance its TMWSuite solution with transportation planning and mode selection capabilities. At the time, TMW had introduced a new module called TMW Mode Planner that provided rating, mode selection, multi-tier planning, and carrier selection capabilities — but as I noted in my report, “it’s a decent solution for a first version, but more work is required to close the gap with best-of-breed TMS offerings.” Apparently, investing in 3Gtms was a faster way to close that gap than continuing with internal development.

Why bring together asset-based and non-asset based transportation management solutions? A key driving force is that many trucking companies and freight brokers, especially small and mid-sized ones, are looking to move up the value curve and become more than just providers of trucks or capacity for shippers. They want to become 3PLs — that is, provide shippers with managed transportation services — to diversify their business and create new revenue-generating opportunities, and to establish “stickier” (longer-term) relationships with their shipper clients.

As I’ve written about before, many small and mid-sized shippers still don’t have a transportation management system and they still manage their operations in-house. For a variety of reasons (high cost of sales being one of them), most TMS vendors and 3PLs have historically underserved this segment of the market, focusing their sales efforts on large shippers instead. In contrast, trucking companies and freight brokers already have relationships in place with many small and mid-sized shippers. The challenge is moving those relationships up the value curve.

Of course, as I communicated in my presentation at the user conference (excerpt below), it takes more than implementing a TMS to become a successful 3PL; you also have to invest in the right people and take a more strategic approach to selling and managing customer relationships.

And with that, it’s time to pack the car and head back home. Have a great weekend!

Song of the Week: “My Sweet Summer” by Dirty Heads

Note: Elemica and Manhattan Associates are Talking Logistics sponsors.

 

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