C.H. Robinson Worldwide, Inc.
C.H. Robinson, headquartered in Eden Prairie, Minnesota, is one of the largest nonasset-based 3PLs in North America and the world. The firm has extended its service from its historical brokerage service to virtually every aspect of transportation and logistics service, which ranges from truckload/ocean/air shipping to TMS platform services and supply chain consulting. Today the company delivers supply chain solutions to more than 113,000 customers across the world, and works with 107,000 contract carriers of all modes and suppliers through an integrated network of 280 offices and more than 14,000 employees.
You, an undergraduate junior student majoring in supply chain management at a major state university, were just hired by C.H. Robinson as a summer intern at any one of C.H. Robinson’s global offices. Your role will most certainly involve engaging shippers and/or carriers in the process of managing freight transportation services through the use of C.H. Robinson’s Transportation Management System (TMS). TMS is a technology that connects C.H. Robinson with its customers, as well as with its contract carriers, to meet the transportation needs of customers in a cost efficient manner. Basically, customers use TMS to find the best carrier, or the best combination of carriers (which may involve multiple transportation modes), to ship freights in a timely manner while satisfying the delivery time window of consignees at minimal shipping costs. Customers also use TMS to check shipment status, manage invoices, and gather transportation data. C.H. Robinson provides two types of TMS to its customers, each of which has different features and price.
Navisphere®
The first TMS is called Navisphere®. This TMS is a comprehensive system that provides flexible, efficient, and integrated technology solutions to customers that bring all aspects of supply chain together. The system is capable of managing all transportation needs of customers (all modes and customs clearance globally), and allows customers to enhance supply chain visibility, optimize their business processes, connect with service providers and consignees, and obtain strategic data and reporting to help drive decisions.
Customers access Navisphere® via the Internet; no installation of software is required. They can request quotes and send freight tenders at any time with detailed freight specifications (when it needs to be shipped, when it needs to be delivered, what kind of equipment is required, etc.), and the system can provide the solutions that meet the customer’s requirements with minimal cost. Tenders, shipment specifics, and facility profiles can be pre-established and can include defined business processes that ensure consistent data capture and timing of order lifecycle events. Communication between the shipper and C.H. Robinson can be either manual or fully automated. Once the freight tender is provided, C.H. Robinson will optimize the best way to ship the freight, so customers do not need to contact each individual carrier or negotiate rates with them. Navisphere® also allows customers to obtain near real-time updates on the status of freight. Navisphere® is connected with contract carriers’ freight tracking systems, which usually take advantage of GPS systems (either the one installed in vehicles or the GPS-capable cell phones used by vehicle operators), so that customers can monitor the progress of freight in Navisphere®. In the event that a shipment will be delivered late, the system notifies the customer about this incident in a timely manner, and provides a new estimate of the expected arrival time. Navisphere® Customers access Navisphere® via the Internet; no installation of software is required. They can request quotes and send freight tenders at any time with detailed freight specifications (when it needs to be shipped, when it needs to be delivered, what kind of equipment is required, etc.), and the system can provide the solutions that meet the customer’s requirements with minimal cost. Tenders, shipment specifics, and facility profiles can be pre-established and can include defined business processes that ensure consistent data capture and timing of order lifecycle events. Communication between the shipper and C.H. Robinson can be either manual or fully automated. Once the freight tender is provided, C.H. Robinson will optimize the best way to ship the freight, so customers do not need to contact each individual carrier or negotiate rates with them. Navisphere® also allows customers to obtain near real-time updates on the status of freight. Navisphere® is connected with contract carriers’ freight tracking systems, which usually take advantage of GPS systems (either the one installed in vehicles or the GPS-capable cell phones used by vehicle operators), so that customers can monitor the progress of freight in Navisphere®. In the event that a shipment will be delivered late, the system notifies the customer about this incident in a timely manner, and provides a new estimate of the expected arrival time. Navisphere®
Navisphere® is also used by C.H. Robinson’s contract carriers, which allows them to access to shipper freight they might not otherwise have access to due to the size of their business or technical limitations. The system used by carriers is called Navisphere® Carrier. It is used by trucking companies, and can be used by both dispatchers and drivers (the system used by drivers is called Navisphere® Driver). Each driver can install Navisphere® Driver in his/her cell phone. The system then works as a communication tool between the driver and his/her manager (dispatcher) and C.H. Robinson. Drivers using the Navisphere® Driver app have access to assigned load information and maps directly on their smartphones, so that they know the location of the next load promptly without contacting their dispatcher. Navisphere® Driver also allows drivers to update freight status automatically. The system uses cell phones GPS capability to automatically send location information to C.H. Robinson on a regular basis, so that drivers can focus on driving without being bothered by phone calls or messages asking for the current location. Drivers can start the automatic tracking by selecting “on way to pick-up” button in the app. Once tracking begins, the system receives timely location updates. Automatic stop updates are received when drivers cross a predetermined geo-fence at stop locations. After delivering a load, drivers can also use the app to submit load documents (e.g., delivery confirmation with consignee signature), which can speed up the payment process. Shippers and dispatchers can monitor all payment statuses through Navisphere® too. Dispatchers can use Navisphere® Carrier to manage loads for their drivers. It allows dispatchers to send load information to assigned drivers, monitor the status of all freights with hourly updates, check billing status, and find loads.
Freightview®
The second TMS is called Freightview®. This TMS is a tool for small- and medium-sized shippers that may not have other enterprise planning and operations tools to adopt a comprehensive TMS. Freightview® focuses on shipping freight by trucks, including both TL and LTL. Freightview® uses an online platform, meaning that customers can use this TMS via standard Internet Web browsers without installing any program in their PCs. Freightview® is designed to help shippers cut the time and money they spend on managing their shipping needs, and it seeks to provide streamlined quoting, booking, tracking, reporting, and visibility of shipments. It is a tool that can find efficient and cost-effective ways of shipping freight for customers with low implementation effort and low fee-based costing model.
Small- to medium-sized shippers, that normally ship less than truckload (LTL), typically must obtain quotes from multiple LTL carriers and choose the one that provides the best rates (subject to the condition that the arrival time of a freight to consignee is within the specified time window). This requires shippers to log in to multiple LTL carrier websites, and provide necessary information for getting quotes multiple times, which is quite time consuming. Often times, these shippers must also contact multiple TL carries to obtain quotes and compare them with the LTL quotes, because when they are shipping freight that is LTL but fairly large, the use of TL service can sometimes save freight costs (as we discussed in Chapter 4—Costing and Pricing for Transportation). Hence, these shippers are very often spending much time and effort to find the best available rates, TL or LTL, for a given freight shipment, or a set of freight shipments. Freightview® can help these shippers save time and effort.
Freightview® works as follows. A customer first identifies the set of its preferred carriers from the marketplace of trucking companies including both LTL and TL carriers. Once this carrier set is identified, Freightview® automatically obtains tariffs of LTL carriers that are included in this set. This means that after the initial set up is completed, the customer will only need to provide the freight information just once to Freightview®, and it will automatically obtain quotes from all the LTL carries in the set of preferred carriers by using the latest tariffs. Hence, the customer no longer has to log in to multiple carrier Web sites, or enter freight information multiple times, which will save customers time. Freightview® can also obtain TL quotes based on the freight information already entered (for LTL or TL quotes) in a timely manner, so that the customer can compare the best LTL rate with the best TL rate to find out if using TL service makes sense for a specific shipment.
Freightview® also allows customers to track shipments in the manner similar to Navisphere®, so that customers can obtain freight status information at any time online. Freightview® may be used to generate reports as well. With Freightview®, customers have access to the data such as on-time delivery statistics (average, standard deviation, etc.), which are not generally available to many small shippers. Freightview® charges customers based on the volume of usage (how many freight shipments they shipped per month), so that small shippers do not need to pay large costs to use this TMS.
CASE QUESTIONS
1. What are advantages and disadvantages of using Navisphere®? Make sure that you discuss this from the viewpoint of both customers and contract carriers.
2. What are advantages and disadvantages of using Freightview®? Make sure that you discuss this from the viewpoint of both customers and contract carriers.
3. What type of companies are good targets (potential users) for Navisphere®? Make sure that you discuss specific characteristics of target customers such as size, industries to which they belong, technological capabilities, and geographic locations.
4. What type of companies are good targets (potential users) for Freightview®? Make sure that you discuss specific characteristics of target customers such as size, industries to which they belong, technological capabilities, and geographic locations.
5. As you learned in Chapter 5, the trucking industry is highly fragmented (that is, there are many small carriers and few large carriers). Does this fact affect your answers to the above questions; that is, does this fact affect your strategy of customer segmentation?
6. Do you think it is a good idea for C.H. Robinson to approach companies (shippers) that have their own fleet (private carrier)? Why or why not? How can the TMS of C.H. Robinson help these firms?