E-COMMERCETRANSPORTATION

EXECUTION

Streamlining transportation execution in today’s omni-channel distribution environment is a clear cut process if you’re using a modern, multi-mode

transportation system

W H I T E P A P E R

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According to the 25th Annual Trends and Issues

in Transportation and Logistics, e-commerce has

both shippers and third-party logistics providers

at a strategic crossroads right now. “For many

companies, the growth of e-commerce has

drastically changed how they manage this

distribution channel,” the study’s authors write,

“and they’ve worked towards creating a unified

and coherent omni-channel strategy.”

Of course, achieving that unified and

coherent strategy isn’t always easy, nor is

there necessarily a good roadmap to follow.

Shippers are literally pioneering new territory

in their quest to achieve this Holy Grail. “And

as many have learned, omni-channel is not just

another distribution option to be added to the

other independent networks managed by the

company,” according to the study. “It requires an

integrated strategy to create and deliver value

for all members of the supply chain—regardless

of where the customer is shopping, what device

they’re using, and how often they login/out of

the system.”

E-commerce sales are on track to hit $523

billion by 2020, up 56% from $335 billion in

2015, according to Forrester Research, Inc.

And by 2020, the firm expects 270 million

consumers to be browsing and buying online,

up from 244 million in 2015. Business-to-

business (B2B) e-commerce sales are hitting

even bigger targets, and on track to surpass $1

trillion by 2020, Forrester reports, up from $305

billion in 2014.

As manufacturers, distributors, and retailers

struggle to wrap their arms around what

these upticks mean for their businesses,

the pathway from point of origin to end user

for this billions of dollars in merchandise

continues to be assessed, dissected, and

approached in various ways.

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“Transportation Execution seems to be forgotten about until it’s too late and then shippers find themselves rushing around trying to solve the problem after the fact.”

—JP Wiggins, VP of logistics at 3Gtms Software

Unfortunately, many shippers overlook the need

for execution when selecting and utilizing TMS in

today’s fast-paced, e-commerce-centric logistics

environment. For example, many logistics

managers assume that order management

(OMS) and warehouse management (WMS)

will address their order fulfillment challenges.

“Transportation Execution seems to be forgotten

about until it’s too late,” says Wiggins, “and then

shippers find themselves rushing around trying

to solve the problem after the fact.”

Dynamic Transportation OptimizationEnabling streamlined transportation for both

B2C and B2B e-commerce channels requires

some upfront legwork on the shipper’s part. As

portals, websites, and shopping carts are either

developed or upgraded, for example, special

thought should be given to how systems will

integrate with one another, how information

will be fed in and out of the enterprise resource

planning (ERP) system, and how orders will

be physically handled, managed, and delivered

once they come in. To work most effectively,

these decisions should also factor in the need

to deliver high levels of customer service at the

lowest possible cost.

These issues aren’t always easy to pin down

in the e-commerce world, where order sizes

and quantities are extremely fluid and liable

to change quickly. “Everybody is responding

to their customers changing supply chain, and

forcing changes on their vendors.”

So where a manufacturer used to ship out

6,000 units of a specific product to a B2B

customer on a monthly basis, for example, that

same company is now ordering a few thousand

units every week, and not always using

consistent order sizes.

For many shippers, the solution lies in

e-commerce-focused transportation

execution enabled by a modern transportation

management system (TMS). In this white paper,

we’ll further explore the key challenges that

shippers are facing in the e-commerce/omni-

channel environment and show

how transportation execution and

optimization is already helping

companies jump these hurdles,

improve customer service levels,

and cut costs.

Addressing the Amazon Effect Few would argue the impact

that Amazon has had on the

logistics environment, where

same-day, next-day, and two-

day have become common

freight approaches for even the smallest,

inconsequential, and unimportant packages.

Where this level of urgency was once reserved

for critical products, over the last 5-10 years

consumers have literally come to expect that

pair of shoelaces, dog food bowl, or bath towel

ordered online to be delivered within a day or

two, max. This is just one of the many ways that

Amazon has impacted the supply chain, and it’s

bubbling over onto the business-to-business

(B2B) side of the e-commerce equation.

“Both businesses and consumers are expecting

more rapid delivery of smaller orders, and that’s

forcing shippers to use faster order cycles,” says

JP Wiggins, VP of logistics at 3Gtms Software. To

support this trend, TMS must be able to execute

properly across multiple transportation modes,

including parcel, LTL multi-stop truckload, pool

distribution and intermodal. This requires a

modern, multi-mode TMS that manages tendering

and booking; documentation; and tracking and

proof of delivery as well as transportation planning

functions like load planning, load consolidation,

carrier selection, and carrier connectivity.

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Meeting the Challenge Head-On“The flowering of e-commerce—while

welcomed by most manufacturers and

retailers—has introduced far more risk and

complexity for logistics managers,” Logistics

Management’s Patrick Burnson writes in

E-commerce reshaping logistics. “Determining

the optimal distribution network has never been

more of a challenge, as shippers strive to strike

a delicate balance between service and cost.”

Shippers can achieve that balance by utilizing

a multimode TMS that can deftly manage

execution and optimization in a highly automated

manner. By selecting a TMS that integrates

easily with the company’s omni-channel

distribution plan, shippers can:

• Gain a 360-degree view of their fulfillment

operations

• Attain accurate order visibility and status

from carriers to understand exactly where

inventory is at any moment

• Tightly integrate with an ERP, thus allowing

order adds/changes/deletes while planning

“With e-commerce, the fact that order sizes are

constantly changing directly impacts shipment

quantities,” says Wiggins, “and that, in turn,

affects both carrier and mode selection. The only

way to efficiently address these fluctuations is

through dynamic transportation optimization.”

So where figuring out which mode is best is

fairly straightforward in the offline world, the

same decision needs more careful thought

in the omni-channel arena. It also has to be

executed faster and with more precision. Ignore

this reality and before long your company will be

forced to manage transportation cost spikes and

other negative impacts of that oversight.

“It’s simple if you’re using just one mode

like parcel, but parcel only works in the

B2C environment,” Wiggins explains. “In

B2B, shippers need a multi-mode strategy

and must be able to execute and choose

between parcel, LTL truck, inter-modal,

find consolidation opportunities, and keep

transportation costs down.”

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“Determining the optimal distribution network has never been more of a challenge, as shippers strive to strike a delicate balance between service and cost.”

“To do that using old-school integration methods

would be entirely too complex,” says Wiggins.

“It’s much better to set up a web service and let

these systems use it.”

Wanted: Fast, Efficient Customer Service A producer of quality mattresses for

independent retail stores, regional outlets,and

national chains across the U.S. for more than

40 years, Corsicana Bedding, LLC, is one B2B

company that is realizing the benefits of good

transportation execution. A maker of a wide

range of premium mattresses and bedding

products, the company prioritizes service

and on-time delivery with strategically placed

production facilities throughout the country.

As its communications around loads became

more complex and numerous, Corsicana sought

out a TMS that would enable new business

initiatives, increase its use of automation, and

streamline its operations. “For example, some

loads had as many as 20 emails going back and

forth, making sure we knew what was covered,”

explains Michael Strickland, director of logistics.

“It was cumbersome and we needed a TMS to

help streamline that.”

Ultimately, the company selected the 3Gtms

3G-TM system, which boosts productivity

by improving shipment efficiency and

communications; increasing shipment visibility;

and providing greater financial transparency.

Using sophisticated optimization algorithms and

actual rate cost, 3G-TM delivers the best plan

that can be realistically executed.

• Equip route planners with the ability to

dynamically optimize up to the point of

freight actually leaving the warehouse

• Make proper mode decisions for specific

shipments, from parcel to truckload to

carload

• Account for constraints

and leverage exception/alert

handling (i.e., to know when

orders will be delayed or which

of them can be rerouted)

• Gain inbound visibility at the

warehouse (or even store) level

to forecast labor requirements

• Utilize freight opportunities

such as consolidation, pool

distribution, and reverse logistics

Orchestrated properly, the e-commerce supply

chain also improves customer satisfaction,

enables new warehouse efficiencies, exposes

shippers to new delivery capabilities, helps

reduce inventory, and leads to cash flow

improvements. All of these benefits directly

impact the shipper’s bottom line while

ensuring that it stays ahead of the pack on the

e-commerce/omni-channel front.

To enable smooth integration with existing

systems and users, a modern TMS from 3Gtms

makes it easy to “hook in” to anyone who needs

access to transportation costs, services times,

and shipment visibility—including in-house

users, suppliers, and customers.

For example, when an ERP needs to figure out

transit time and a carrier for an order it can get

that information from the web service. And if a

customer order portal needs to quote real transit

times and costs for an order and give them

options, it can hit up the TMS web service for

that data.

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Corsicana’s improved automation and business

intelligence have improved the manufacturer’s

efficiencies while providing additional benefits.

“We strive to provide an exceptional customer

experience before and after each purchase, right

down to strategically shipping our products,”

explains Strickland. “Now with improved visibility

and operational data, we can ensure fast, efficient

service for our customers.”

Executing Efficiently & Producing Results The transportation industry has changed

dramatically in the last 20 years, when many TMS

solutions were originally designed. Challenges that

are now considered normal weren’t even thought

of then, including e-commerce and omni-channel.

“3Gtms’ unique focus on providing the most

advanced functionality in an architecture that

emphasizes usability, flexibility and expansion,”

Wiggins says, “provides a TMS platform that

will execute effectively and produce results for

companies that are struggling to adapt to the

e-commerce logistics environment.”

About 3Gtms3Gtms is the fastest growing, Tier-1 transportation

management system (TMS) provider. It is dedicated

to helping mid-to-large shippers and logistics

service providers gain a competitive advantage

through technology. Whether you move $5 million

or $5 billion in freight, 3G-TM solution seamlessly

manages the full transportation lifecycle, including

transportation planning and optimization, execution

and settlement, empowering customers to make

better shipping decisions while meeting their

service goals. 3Gtms is dedicated to delighting its

customers and as a result, holds a 100% customer

satisfaction rate that is unmatched in the industry.

For more information, visit: www.3gtms.com.

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