Freight Collaboration Platforms - What Should You Know in order to Zoom-In && Project Cargo Suitability

Issue # 7 - LogTech Reviews & Info: online freight platforms, booking portals, carrier networks are here since begining of internet era; this segment today; read on for trends and reviews

As a Supply chain and Logistics Expert I am issuing insights and letters in 3 workstreams: A) Logistics & Shipping Industry Insights, B) LogTech Reviews & Info and C) SAP Logistics Explanations & Updates. This time we zoom into LogTech Reviews & Info workstream.

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Industry buzz or hype?

We frequently hear about Freight Exchanges, Freight Platforms, and carrier collaboration, and how essential these are for achieving agility and performance gains in shippers' end-to-end (E2E) transport operations. It’s true that these platforms provide significant value, including the ability to collect data on external ecosystems and measure actual performance and SLAs against contractual benchmarks. Some of these Freight Collaboration Platforms (FCPs) also publish industry indexes, offering insights on lead times and benchmark prices for various trade lanes (see, for example E2open or FreightOS).

What is important to realize what would FCP do for your business, for what price costs and what is the degree of me exposing my sensitive data to the industry vs what do I gain back. This article focuses on some of these aspects.

FCP Space Definition:

How do I define “Freight Collaboration Platform” (FCP)?

Typically freight collaboration means all related processes when shipper is interacting with carrier (either mode), such as annual tenders, once off tenders (spot), bid negotiation, capacity reservation (aka booking), shipping instruction and bill of lading exchange, dock appointment scheduling (for pickup, for delivery), in transit visibility (shared with RTV type of solutions), exception management, carrier issuing and providing freight invoice (rated bill of lading), freight audit or dispute management, performance analytics.

Some platforms would also offer features like carrier marketplace, air process management, predictive ETA and location services but those are at the edge of what RTV platform should actually provide. Many of FCP platforms do ally with RTV platforms, but don’t be confused - RTV platforms are not FCP solutions!

Main value is to automate to maximum level carrier exchange, bring agility to exceptions and disruptions in process and flexibility of adding or removing carrier on the fly without lengthy integration processes.

What FCP is not:

Often even industry leading analysts or publishers mix up into FCP some of the other types of solutions. There is certainly an overlap, and each of the other type of solution do deal also with carriers, but they are built for something else.

A) Main difference to Real Time Visibility (RTV) platforms

Solutions such as Shippeo, Wakeo, Project44, Gatehouse Logistics, Searates, Raft, Gnosis Freight, FourKites, Terminal49 or CARGOES Flow are based on particular capability to connect to one or more IOT data vault to receive whereabouts of trucks, vessels or containers, combining it with API connectivity for statuses with carriers or even better with terminals. Their value proposition is the “Real Time” view of the physical world. That said it also means its the visibility of real cargo, once it is shipped, it is not pre-loading process visibility nor collaboration type of platforms. This field did experience a boom in recent years, and lots of investors went into this field. But it is now radically cooling down sub-industry and most of the RTV players need to pair up with any of the FCP or TMS solution to go forward.

B) Main difference to Transport Management System (TMS) solutions

TMS are likely the “oldest” brother to their younger siblings FCP or RTV and many of the TMS are trying to teach a lesson to their younger brothers. TMS focuses mainly on planning and optimization, questions like how to decide on loading, how to consolidate, and which route or carrier to take are in core of TMS. Some TMS did try to embed the carrier collaboration into them, with various success. Often soon or later they did split carrier collaboration into separate software suite, like SAP or Oracle. Often TMS are gearing up with FCP to provide seamless experience and even more often some TMS grew up from FCP offering initially (like InforNexus or AlpegaTMS). Key difference is that TMS focuses on algorithmic calculation for planning and optimization, whereas FCP focuses on “executing” what TMSs already planned for.

C) Main difference to Container / Asset exchange solutions

There are very specific platforms that picks on corner use cases of transport and shipping, but bringing very great value in their own fields, like e.g.

Avantida - ocean container street turns process between truckers and ocean liners; basically, trucker asks for approval of liners that empty container would be given to next customer in vicinity vs being brought back to depot

Cargowise Landside - collaboration platform to share “parking” space for empty container or trailer; mainly available in North America

These corner use cases do provide value mainly to truckers or liners but have very appealing CO2 savings as well as direct cost savings proposition that even some larger shippers with their fleet (assets) jumps on these digitalized processes.

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Overview List of some key players (EU perspective):

Featuring vendors as OneNetwork, Blume, cargobase, SAP, cargoo, FreightOS, buyco, e2open, InforNexus, Descartes, myLeo, Trans.EU, alpegaTMS, elogate and Transporeon.

Note: List of vendors above is in unsorted order, no meaning given to a vendor position in the list. Also “Characteristics / review / pros & cons” are based on public research, websites, commentaries and my own experience with these solutions from project bases. This list is prepared from EU perspective.

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SAP BN4L - few words

Outline of functionality

Understand: Business Network 4 Logistics or “Logistics Business Network” as it used to be named before, is from SAP perspective a complementary tool to their SAP Transportation Management solution. SAP sees this mainly as hub and spoke solution for various carriers and LSPs, currently there is no intention to turn this into an open marketplace like space or issuing any generic index on top of its data. This may change although.

Some key risks and consideration about FCP

• FCPs are transport / freight execution solutions platforms, all in cloud in multi-tenant deployment - that means part of your data are out in cloud

• Lot of FCPs are offering also TMS solutions, and they would title themselves as such; but they can (and are often happy to) offer “only” the freight platform functionality (i.e. external planning) 

• Next to FCP there are specific Rate platforms for benchmarking and insights into pricing and trends (most notable is Xeneta)

• You may also review my post from some time ago about how to read/understand the MQ on this topic https://wisechainconsult.substack.com/p/gartner-tms-magic-quadrant-what-should

• In all cases these software vendors would range between two positions a) being strong on connectivity (# of carriers/LSPs on their platform) and b) being good with functionality (like supporting of external planning)

• Also, only few players are truly multi-modal – most of them are focus strong on road, or focus strong on ocean

• Lots of shippers do eventually decide to choose one FCP for Road transports and one FCP for ocean moves

Recommendations

• Realize what you really would expect from Freight Collaboration Platforms for your business, if you have full scale TMS in place, maybe this would be only a postman job

• Put your basic requirements as a list to these vendors

• What is a good practice is to list your carriers / LSPs that you work with today and ask these vendors if they got them onboard (and on which data point) and insist that the % of presence of carriers is the highest

• Research if the platform is issuing any index, global analytics or alike - this tells you that this platform has something to offer

• Insist on shortest enablement time (time to market) of a new carrier or LSP

Special: Suits for project cargo?

Special attention to FCP is to be given to project cargo. Project cargo is typically very dedicated set of shipments / deliveries for particular project (be it factory build up in country A, or construction of bridge in country B), and is very specific to its exact time of transport, it has often unusual size or volume and maybe fragile cargo (machines).

For project cargo what shipper needs is project structure and reference to be binding all underlaying inbound or outbound shipments and have links between ETAs and delivery promises either from suppliers or to customers. Don’t forget, when assembly of new machine happens at customer factory site, often there are deliveries from sub/suppliers direct to factory - and the freight contracting shipper may not ever see the physical shipment.

Customers typically rely on TMS to bind this altogehter, and in this aspect those TMS that have their own network (collaboration) offer comprehensive answer to this type of business requirements.

Conclusion:

Freight Collaboration Platforms are going to grow and get more prominent. Their main proposition, network - the Facebook of logistics - is the key here. We see that many of the players are offering TMS, trade compliance or real time visibility, those that do that have certainly upper hand in hard competitive landscape of today.

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Thank you!

Jakub

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The text, knowledge and conclusion in this article is NOT generated by AI, it is human-written.

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