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Last-Mile Visibility in a Global Supply Chain

April 11, 2014
Ocean carriers and 3PLs are using collaborative technology to eliminate blind spots in the movement, delivery and return of import containers to and from the last mile—the final customer destination.

Compared to the others, intermodal users—companies moving containers to and from ocean ports, rail ramps and container yards as part of international shipments—face more complex requirements. These include not only coordinating container movements from port, rail, truck and inland customer delivery locations, but also the tracking and return of the containers and the associated chassis to the turn-in facility designated by the respective ocean carrier and chassis lessor. The length and complexity of global container supply chains compared to a typical domestic supply chain magnifies the challenge.

As companies become more proficient at managing international inbound supply chains, how well the last mile is managed plays a critical role in their ability to stay competitive and profitable.  As the importance of last mile logistics grows, obtaining real-time visibility of goods, the associated equipment and maintaining control every step of the way is critical.  To successfully manage the last mile companies must coordinate the related activities of a diverse group of trading partners, such as drayage motor carriers.

The Network Connection

By connecting to a specific network of trading partners, companies lay the foundation for gathering the many and varied pieces of actionable business information required to gain true visibility into actual last mile container movements.  Gathering this information allows them to better manage their motor carriers' performance, better control their motor carrier costs, better utilize their transportation assets (containers, chassis, warehouses) and provide timely and accurate status information to their customer—the beneficial cargo owner.

Enhancing visibility can mean coordinating with motor carrier partners by executing match-backs (also called "street-turns") to reduce the empty miles associated with almost every last mile move.

The triangulated move, rather than two round trip moves, reduces empty miles driven.  This leads to a significant increase in motor carrier asset and driver utilization, a reduction in the base drayage charge, and greatly benefits both the motor carrier and the ocean carrier or freight forwarder paying for the last mile transport by increasing efficiency and profitability.

Originators of an intermodal drayage move—an ocean carrier, freight forwarder, or 3PL—typically offer (dispatch) this work to a closed but flexible network of pre-approved motor carrier trading partners. These motor carriers receive and confirm acceptance of transport work orders, report full container pick-up from the ocean terminal or rail ramp, provide delivery appointments, proof of delivery (POD), empty container returned to the container yard and related information.

Additionally, the motor carriers also submit invoices for review, approval and payment.

The challenge to both originators and their motor carrier trading partners is that the exchange of this time sensitive, complex and important information is most frequently done through email and phone conversations.  This manual exchange of last mile information makes all parties involved in the exchange less efficient and less competitive when compared to those who have implemented solutions and processes to exchange this information electronically and in near real time.  

To more competitively and profitably execute last mile deliveries, companies should consider technology and processes that automate many aspects of communication among the parties involved in the last mile. The use of collaborative cloud-based platforms can bring all the relevant trading partners on board and achieve the required levels of visibility for the last mile.

Elements of Visibility

Automation of manual dispatch processes for last mile transport allows trading partners to quickly and efficiently exchange critical event milestones electronically.  Critical events such as confirmation of transport work order received, pick-up times, delivery appointment times, POD and time of return of the empty container are most valued.  A collaborative cloud-based solution helps motor carriers receive transport work orders electronically through a web-based portal or—if they have implemented modern systems—electronically into their proprietary system through a variety of electronic formats such as ANSI X-12, XML, CSV or custom maps.

Once the motor carrier has received the transport work order electronically, updates of key milestones are also performed electronically to their ocean carrier, freight forwarder and 3PL trading partners.  Both sides benefit from the streamlined information flow and are better able to focus their efforts on quickly identifying and resolving problems and issues with last mile deliveries rather than simply administering moves and hoping that nothing goes wrong.  

Case in Point

As an example, Nippon Yusen Kaisha (NYK Lines), a large ocean carrier, was able to enhance last mile visibility and execution using such a platform.

"Several years ago, we began to investigate options to eliminate or reduce blind spots in our supply chain with respect to container moves from the port to inland customer destinations and back," says Dan Sheey, vice president operating services at NYK. "Because of the number of motor carriers, rail and terminal locations, and the corresponding point-to-point coordination needed to efficiently manage the movement of containers through a variety of partners and back to the port, we began to look at cloud-based solutions with existing connections to the rail and motor carrier base. Prior to that point, systems were largely phone, fax, email, and a limited amount of EDI." The company lacked visibility and control across dispatch points, and had limited visibility to available pickups and matches to maximize the use of containers on the return trip to the port.

Subsequently NYK Lines implemented a cloud-based system covering North America.

Using a cloud-based platform, transactions are automated for rapid coordination with motor carriers to move containers to and from a DC. Motor carriers can electronically confirm delivery has taken place, then instantly invoice the appropriate party. The system NYK uses can create, update, and amend loads and movements and send and receive delivery confirmations. It can also track appointments, delivery and completion through to the final destination. Motor carriers' invoices are received electronically then approved or rejected if charges are incorrect.

NYK receives last mile visibility through to delivery and its staff is more productive and efficient.

The freight forwarder community has also embraced collaborative cloud-based solutions to solve their last mile visibility challenges.  Two of the top ten global forwarders currently use a cloud-based solution to connect electronically to their motor carrier partners in North America for true last mile visibility.  Critical last mile event milestones are transmitted electronically to the freight forwarders through their proprietary systems for improved visibility and customer service. 

As with ocean carriers, forwarders understand the importance of this information to increase competitiveness and profitability. 

Last-mile visibility allows companies providing international intermodal services to ensure their beneficial cargo owner customers don't have to wonder where their products and goods are during transit.  A cloud-based system can provide a single collaborative "version of the truth" that allows all trading partners increased visibility and control of last-mile events—and most importantly allows all trading partners to increase their service levels, improve their ability to compete in an increasingly crowded market and be more profitable.   

Christopher P. Mazza is chief commercial officer for International Asset Systems, providers of cloud-based systems for intermodal transportation.

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