A Truth About Global Transportation: It Happens Locally

As shippers of all sizes expand their global sourcing, manufacturing, and distribution operations, they have to navigate the complexities involved with global transportation management. What are the main challenges global shippers face today?

“It depends on who you are as a company,” said Mike Skinner, Vice President at CLX Logistics, in a recent episode of Talking Logistics. He went on to explain:

We’re working with companies that are large and global and got there through organic growth, and they’re dealing with global transportation networks, systems, and organizations that are bursting at the seams and held together with a lot of baling wire and lots of programmers who have been managing legacy systems over the years.

We’re also working with companies that have gotten there through acquisitions. Ten years ago they might have had $1 billion in global revenues and today they’re at $10 billion after multiple acquisitions in different regions, [which creates its own set of challenges].

So you have to look at these global organizations very differently [depending on how they got there].

But there’s a truth about global transportation that applies to all companies, regardless of how they became global: transportation happens locally. As Mike explained:

Most companies are trying to get a global view of transportation, but the reality is that transportation happens locally.

We have customers who are shipping pallets of goods every day to a manufacturer next door and they need to track and understand those flows, and at the same time they’re shipping hundreds of containers on a global basis across many thousands of lanes and worrying about customs declarations and track-and-trace and working with ocean carriers and so forth.

So the complexity is really at the local level…and those complexities are further complicated by regional cultural differences and transportation needs. What palletized freight shippers in Ohio are dealing with on a day-to-day basis is very, very different from shippers in Europe who are shipping pan-Europe across all modes (intermodal, short sea, and across borders), and that’s different from shippers who are dealing with freight movements in places like Brazil where you have to worry about freight being intercepted and hijacked, and that’s different from having to deal with the myriad of local carriers in Asian countries.

“There’s a lot of pressure on global organizations to manage freight globally and be able to present to [upper management] information about costs, flows, and volumes,” said Mike, “and yet they need to rely on that local activity that is happening on a day-by-day, minute-by-minute basis, and they have to rely on local plant managers and local planners and shipping departments to enable them to [gather that intelligence] and that’s a big challenge.”

Mike went on to talk about how transportation management systems (TMS) have evolved to meet the needs of global shippers, with the rise of cloud and software-as-a-service solutions playing an important role, and he also discussed the key capabilities companies should look for in a TMS (hint: usability and configurability are important).

In the short clip below, Mike shares some case study examples that illustrate how leading companies are managing their global transportation operations.

So, how do you know if you’re a leader or laggard in global transportation management? Mike has an easy litmus test: “A leader is a company that when you ask them to show you their global transportation network costs, volumes, hotspots, and so forth are able to pull up that information in a matter of minutes and show you; laggards are not able to answer those questions quickly or accurately.”

I invite you to watch the rest of my conversation with Mike for additional insights and advice on this topic. Then post a question or comment and keep the conversation going!