Transportation Insight Strengthens its Lead Logistics Presence
Hickory, North Carolina USA
October 2007
By
Evan Armstrong

Key Personnel:
Paul Thompson, CEO
Toby Tate, CFO
William Pazdera, COO
Laura Easley, Chief Business Development Officer
Michael Hui, VP of Market Development
Reggie Walker, VP of Client Services
Chris Mendenhall, VP of Pricing Services
Charles Moore, VP of Parcel Services

Overview
Founded in 1999, Transportation Insight (TI) is led by CEO Paul Thompson and an executive team with extensive LTL, parcel and truckload transportation knowledge. The team has leveraged its experiences to create a sizeable, quality non-asset based transportation management operation. TI has grown organically to revenues of $212 million in 2006 and a staff of 114 employees.

TI develops complete transportation management programs for shippers. Its overall service is a mix of consulting, transportation planning, and technology supported transportation execution. Services include: carrier contract negotiation, transportation request for proposal development, carrier routing guide development and compliance monitoring, supply chain redesign and network modeling services, freight bill audit and payment, loss and damage claims processing, and transportation management systems support and management reporting. TI acts as a Lead Logistics Provider (LLP) for virtually all of its customers. Key customers include: Lance Foods, American Tire Distributors, The Thomas Kinkade Company, Herff Jones Inc., Von Drehle Enterprises Inc. and Royal Purple, Inc.

TI’s Transportation Management Systems Suite
To support internal and customer transportation management operations TI has developed a proprietary transportation management system (TMS). The TMS provides robust functionality to customers through its “TI Tools” with the following internet dashboard modules:
Insight Rater: Allows customers to find optimal carriers for shipments, identify routings, and calculate transportation charges.

Insight Tracker: This is an online shipment tracking and tracing tool that allows shippers to search over 25 carriers from one interface. Customers can track shipments by carrier pro number, bill of lading (BOL) number or customer specified reference numbers.

Insight BOL: This tool allows customers to create online bills of lading. Customers can save, print, email and make copies of BOLs. It also allows customers to build and store commodities lists and addresses to be used in other BOLs.

Insight Payer: Provides customers with individual carrier shipment payment information through the Transportation Insight website. Payment information can be searched by carrier pro number, purchase order number or BOL number.

In addition to its online tools, TI has also developed a cadre of detailed transportation management reports. Standard reports detail: transportation costs trends, transportation cost savings, administrative cost savings, transportation shipping patterns/traffic trends, and carrier service trends.

For large customers and carriers, TI also has experience integrating its systems with enterprise resource management (ERP) systems such as SAP and Oracle and developing electronic data interchange (EDI) messaging interfaces.

Strategic Partnership for Logistics Optimization Case Study
Background: Headquartered in Charlotte, North Carolina, Lance, Inc. has 4,800 employees and manufacturers and distributes snack food products. The food industry is highly competitive with intense cost and service pressure. Companies that employ out-of-date methods quickly find themselves at a disadvantage in the marketplace. To strengthen its competitive advantage within transportation and distribution, Transportation Insight was selected to assist Lance in creating innovative solutions.
Solution: Lance, Inc. is comprised of multiple operating units. To effectively manage its complex supply chain and track key metrics, a Distribution Optimization Team was assembled from all units to provide overall logistics vision and strategy. Transportation Insight was invited to join the team so Lance could leverage TI’s logistics expertise and technology solutions. Both were necessary for achieving key annual performance metrics.

An initial project was launched to evaluate current costs versus a proprietary best practices database and identify improvement opportunities for carrier management. Transportation Insight provided extensive cost management tools and expertise to reduce freight costs and ensure invoice accuracy. Beyond the initial cost savings, ongoing continuous improvement activities were implemented to evaluate shipments for least-cost alternatives.

In prior years, Lance management utilized a number of internal metrics for measuring logistics costs. Transportation Insight evaluated the prior metrics and implemented a new consolidated dashboard that not only saved valuable Lance employee resources, but also streamlined the metrics into an easy-to-use management tool for increased cost visibility. Internal private fleet costs are included in the metrics package for a total transportation network approach to cost improvement.

The strategic partnership between Transportation Insight and Lance, Inc. was started in 2004. Through the joint efforts of Lance‘s logistics staff and Transportation Insight, targeted freight savings have exceeded 20% in some operating units. Today, Transportation Insight provides carrier negotiations, contract management, data warehousing, reporting, invoice audit and payment, and visibility tools for additional supply chain savings.

American Tire Distributors (ATD) DC Network Optimization Case Study
Background: American Tire Distributors (ATD) has 2,100 employees and 35,000 customers throughout the United States. It distributes a variety of automotive products to the replacement market from 71 distribution centers. Products include private label tires, wheels and accessories, and related service equipment, tools, and supplies. The company‘s customer base includes national and regional retail chains, service stations, auto parts stores, automobile dealers, and automotive repair facilities.

ATD has grown rapidly in part by acquiring smaller tire distributors. As its U.S. customer base continually expands, ATD ensures customer satisfaction by providing fast delivery service from its comprehensive finished goods inventory. Evaluating the strategic value of newly-acquired distribution centers proved to be a time-consuming challenge for the ATD’s logistics staff. To help out, ATD enlisted Transportation Insight to conduct a study of ATD’s distribution center network and submit recommendations for retaining or closing facilities to optimally support ATD’s growth.

Solution: Network optimization can be very complex as the amount of data, technology and logistics expertise required to effectively analyze transportation service needs for each location can be significant. The primary consideration for ATD‘s distribution center consolidation was to provide one-day service to 100% of its clients. A secondary consideration was to minimize distribution center redundancy.

ATD utilized Transportation Insight‘s location optimization recommendations and further evaluated their capability, operating costs and ability to serve customers within corporate guidelines. Solutions were created to evaluate the number of DCs required for 100% next-day service, 90% next-day service and 80% next-day service. Transportation Insight‘s analysis showed 100% next-day service is a costly strategy to maintain. Changing this strategy to enable two-day service for 5 to 10% of ATD’s customers would allow for an over 50% reduction in the number of required distribution centers. ATD management then evaluated other costs and individual customer requirements to ultimately determine if a newly acquired distribution center could be consolidated into an existing location.

Transportation Insight‘s strategic network optimization solution complemented the day-to-day transportation management services it provides to ATD. Transportation Insight has worked with ATD since January 2001 and manages ATD‘s carrier contract negotiations and freight audit and payment process. In addition, Transportation Insight monitors routing compliance and provides inbound and outbound transportation management reporting to ATD. With the help of Transportation Insight, ATD has seen increased profitability, time savings, improved customer service, enhanced business intelligence and increased managerial control from using TI’s suite of transportation management systems solutions.

Summary
Many 3PLs have a few lead logistics provider relationships with key customers. But Transportation Insight is the only 3PL we have visited where the majority of its relationships are lead logistics provider relationships. TI is a solid example of a company getting many small things right, executing operationally with tier-one systems supporting internal and external customers and driving above average growth by anticipating customer needs.

 

Sources: A&A Primary Research, http://www.transportationinsight.com/

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