With iLENS, McLeod Software dives into freight management

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Freight management and fleet management technology may seem to be polar opposites. On one side, shippers are looking to reduce freight costs with bid packages and transportation management systems (TMS). On the other side, carriers and third-party logistics providers (3PLs) are using software to control assets and protect their profit margins.

During the dot-com boom in the late 1990s, some technology ventures tried to bridge the gap with “transportation exchanges.” The idea was to reduce shippers’ costs and increase carriers’ visibility to freight by creating online spot markets. Carriers could compete for freight in a reverse auction process.

Michael Voelk saw the inherent flaws of transportation exchange while working for Bid Freight Global, an IBM-backed company that he says ignored the importance of shipper-carrier relationships in the bid process. “That was the ludicrous nature of what was going on (at the time),” Voelk says. “The thinking was really way out there.” Voelk says a bid process that beats carriers up over price forces them to start playing games, such as asking for rate increases and rejecting loads once the bid process is complete.

After the dot-com bubble burst in 2001, Voelk sought to return shipper-carrier relationships to the bid procurement process. He became a consultant for several large shippers’ bid procurement projects and used the income to create iLENS (Integrated Logistics Execution Network Systems), a new type of freight management software. The company developed an efficient Web-based system used by shippers and freight management service providers to create money-saving rate guides without beating carriers up over pricing, he says.

To do this, iLENS uses a bid procurement process called Carrier Alignment in which carriers submit bids one time; the shipper does not see the bids until the bid closes. The iLENS system optimizes the rate guide and awards freight to carriers based on volume commitments by lane.

Early users of iLENS for bid procurement included Pilgrim’s Pride and Smithfield Foods. Freight and data management companies – often called fourth-party logistics providers (4PLs) – also use the software; Dallas-based Greatwide Logistics was one of the first 4PL customers. Voelk says that in addition to bid procurement, iLENS also offers load tendering, load execution and other features common to transportation management software (TMS).