Opinion: Information Logistics Improves Efficiency

By Bob Helms

Chairman and CEO

Pegasus TransTech

This Opinion piece appears in the March 12 print edition of Transport Topics. Click here to subscribe today.

In order to grow their revenue, many carriers say they want to be as flexible as possible in adapting to the specific needs of shippers and freight brokers.

But many carriers also want to eliminate the need to work with multiple portals and complex integrations. And many freight brokers want to eliminate manual paper processing with small carriers and disparate information systems with large carriers.

The next step in the evolution of trucking management finally delivers what EDI (electronic data interchange) promised 40 years ago but never accomplished. For the purpose of this article, we’re going to call this process “information logistics” — business processes that are truly paperless and more.

It’s not a brave new technology, but like so many good ideas, it is a leveraging of applications and systems that already exist. Total visibility has been important in the supply chain for many years but not achieved. Add to that the failure to connect data and images effectively across disparate platforms, and the time-consuming aspect of the problem comes into focus. Some carriers and brokers already are pursuing solutions that work — or at least elements of it to one degree or another.

The idea of logistics took hold in the business world of the newly deregulated 1980s. Borrowed from the military, the word “logistics” implied a view of business in a total geographic and financial context — not just transportation itself, but sourcing materials, locating facilities, and, of course, delivering the goods in the most efficient way possible.

Information logistics sees the information side of trucking in a comparable, big-picture way, considering all information — not just what can be represented in text — and delivering it quickly and easily when and where it’s needed, regardless of platforms, portals or protocols. For these reasons, information logistics is a major step beyond EDI and is a more encompassing definition of “paperless.”

Some four decades ago, EDI digitized much of the transportation business, making it possible to tender loads, update shipment status and more, electronically and in a standard format. But much paper remains in the system, particularly where smaller shippers are involved — bills of lading, freight bills and signed delivery receipts, for example.

Information logistics is a process that works with any size carrier, broker or shipper. It includes EDI-type data, as well as those remaining paper documents, in digitized form by scanning or the inclusion of electronic forms.

But there’s more. Information logistics encompasses the output of new electronic devices — most notably at the moment, the ubiquitous, camera-equipped smart phone. While this is only one form of capture, its photos can be of documents and are the equivalent of scans with the newer apps available. They can include visual documentation of freight damage, accidents on the road or any conditions that affect the on-time delivery — or nondelivery — of freight.

Those images can be useful in billing, safety, claims, human resources and even the legal department. In other words, it goes well beyond basic EDI.

True information logistics brings all these resources together in a single package that can be accessed quickly and easily. When necessary, relevant elements can be shared among companies and across platforms, most obviously between carrier, broker and shipper. But this may also be done between transportation businesses and insurance companies, law enforcement agencies and regulators, if desired.

A major effect of information logistics is in cost savings of back-office processing. Some processes can be totally automated, made “low touch/no touch” by humans. And in those that are not, a person no longer needs to deal with information piecemeal.

Everything necessary to move the process forward will be available in electronic format. The responsible person is able to look once, make a decision and be done. There is no need to go back and search for more information, for a copy of this or that.

The carrier has what it needs all in one neat electronic package of data and images — a package that can be shared widely in real time.

Many people have attempted to realize this potential through various means. Shippers and carriers have installed elaborate portals. Some have written complex integrations with trading partners or devised schemes to send XML files and the like.

These ideas often optimize efficiency for one party with much less benefit to the other, if any. What has long been needed is total visibility in a format the receiving parties can incorporate simply into their own systems.

Carriers should be particularly interested that information logistics can include irrefutable evidence — in a format desired by the shipper or broker — that the carrier is entitled to be paid. When this is automated on both ends, the process of getting paid happens much faster. Again, the process for the shipper or broker should at the most never be more than “look once, make a decision and be done.”

Fully realized, information logistics benefits all transportation parties — carriers, brokers, and shippers — by providing total visibility, shaving administrative layers and reducing the costs of transportation overall.

Pegasus TransTech, Tampa, Fla., provides technology-enabled business process improvement solutions.