When General Mills posts data on a logistics network about a truckload of Wheaties being shipped from Minnesota to California, Pillsbury sees that information and decides it could use that same trailer to transport freight from the West Coast to Minnesota on the backhaul.
Both shippers and the trucking partner involved benefit from optimal use of capacity.
General Mills and Pillsbury participate in Nistevo Corp.’s Internet-based Collaborative Logistics Network, which enables invited shippers and carriers to manage contracts online, match truck demand and capacity between members and jointly execute each step of a shipment.
Based in Eden Prairie, Minn., Nistevo’s private networks enable trusted partners – companies that wouldn’t dare turn their freight over to little-known carriers that post available equipment in the Web-supported spot market – to share and optimize their trailer capacities.
The Nistevo Network Builder application service provider technology can track shipments, alert participants of arrival times or delays and process hundreds of thousands of transactions every day under an annual subscription plan. Members can improve customer service, cut costs, automate communications between partners and streamline their supply chain processes. And shippers can build collaborative tours, which help carriers to convert their truck assets from over-the-road service to dedicated operations.
Relationship-based collaborative networks “are the enabling technology that both shippers and carriers can leverage to break traditional performance barriers,” says Nistevo President and CEO Kevin Lynch.
Nistevo recently held a network members’ community meeting, which was attended by 18 shippers and 10 carriers. Many of the shippers are Fortune 500 corporations in the consumer packaged goods business. A survey of the shippers at the meeting revealed that they plan to use the network to convert an average of 25 percent of their transportation to dedicated service.
That’s music to the ears of Mike Bunnell, senior vice president of corporate sales and marketing for C.R. England & Sons, which has been participating in the Nistevo alliance since early this year.
Bunnell said his company got involved because one of the refrigerated carrier’s major customers that is “very involved in dedicated service” called him about joining the network. “He was excited about it, and I told him that if he’s excited about it, I’m excited, too,” he says.
Bunnell says he likes dedicated work so much that he’d “put every one of our red trucks in it,” if possible. He noted that there’s 35 percent less turnover when drivers are involved in a dedicated operation, and it’s steady, guaranteed work.
“Trucking bankruptcies are up almost 40 percent from five years ago, and industry capacity is steadily decreasing,” added Bunnell. “We see dedicated service as playing a major role in the future of profitable transportation services. Dedicated service not only helps carriers improve driver satisfaction and increase truck utilization, it also provides carriers with a fixed revenue stream.”
Nistevo’s research also found that many industries are geographically clustered. For example, many companies in the retail industry ship goods from the East and West Coast, while many packaged goods firms ship from the Midwest to the coasts. As a result, that scenario presents an opportunity for cross-industry collaboration to generate backhauls that’s much greater than collaborating within the same industry.
