Global Transportation Management Benchmark Study: Climbing the Visibility Sophistication Ladder

Transcription

1 In partnership with: Global Transportation Management Benchmark Study: Climbing the Visibility Sophistication Ladder Written By: Eric Johnson Research Director American Shipper Published November 2013 Sponsored by:

2 Executive Summary Welcome to American Shipper s fifth annual benchmark study of global transportation management, produced in conjunction with the Retail Industry Leaders Association (RILA). This report annually looks into the trends that impact how shippers and logistics service providers manage their international freight transportation processes, and the technology that helps support those processes. ii This year, readers might notice a small, but substantial change in the title of the report. The report is now called the Global Transportation Management Benchmark Study to reflect the way shippers supply chains have grown. Shippers and their service partners don t just manage the movement of goods from one country into another rather, they manage freight flows across multiple countries, with sourcing markets quickly evolving into consumer markets. Executive Summary This report also differs a bit from those in years past in that it dives deep into three particular areas of global transportation management: visibility; the quality of data underlying that visibility; and the extent to which shippers transportation management has gone global. Nearly 350 qualified global logistics practitioners participated in the survey from early September through early October. Visibility At its most basic level, visibility is the collection of key pieces of information about a shipment, and the dissemination of that information to relevant stakeholders. How complex the data gathering and dissemination is depends on the demands of the ultimate consumer of visibility. Yet there is little consensus among shippers and 3PLs about what constitutes visibility. Shipper respondents were three-times more likely than 3PLs to view visibility as merely knowing details about a shipment. But forwarders were more likely than shippers to define visibility on the more sophisticated end of the spectrum. This makes sense in that forwarders increasingly see themselves as providers of technology and data aggregators, not just movers of freight. One of the hardest areas of visibility for IT vendors and LSPs to communicate to shippers is the return on investment. In many cases, visibility provides a hard-to-define benefit that nonetheless exists. Many shippers, and often even forwarders, have a difficult time determining

3 the dollar benefit of visibility. This report found that around two-thirds of shipper respondents say they can identify the ROI from visibility, while the other third said they are either uncertain of the benefits or unable to quantify them. Nearly a quarter of respondents said they haven t made any investment in visibility. A slightly higher percentage of forwarders (about 75 percent) said they can identify the ROI in their visibility investment. Data Quality Shippers whether using a system or not are intent on improving their data quality. Nearly 90 percent of systems-based shippers and 75 percent of manual, or spreadsheet-based shippers, say they are actively working to improve data quality. More than half of systems-based shippers said they strongly agree that improved data quality is a priority. It makes sense that systems-based shippers would have even more impetus in this regard. Feeding reliable, accurate data into a system can alleviate man-hours spent chasing shipment status updates, or auditing shakier data. This year, respondents were asked to rate the quality of data accuracy, timeliness, and completeness. Third-party logistics providers, ocean carriers, and air carriers rate the best across all three metrics, while rail and drayage operators rate at the bottom. Respondents reported slightly better quality in terms of timeliness and accuracy versus completeness across all partners. One other thing to note: large swathes of respondents in all three metrics reported data quality was only fair. That s hardly a damning indictment, but also not a ringing endorsement for the state of data quality among any individual providers. iii Executive Summary Going Global Shippers use their global transportation management platform to manage a number of geographies, with Asia and North America unsurprisingly the most well represented. Large shippers, in particular, report that their systems reach every corner of the trading world. Yet respondents to the survey said their logistics decision-making power is overwhelming concentrated in North America. Shippers also characterized foreign-to-foreign global transportation moves as harder to manage than inbound or outbound moves from their home market. Hardly any said their inbound/outbound shipments were harder to manage.

4 Table of Contents Section I: Introduction...4 Section II: Demographics...5 Section III: Defining Visibility...7 Section IV: Measuring Data Quality...13 Section V: Automation s Role in Global Transportation Management...18 Section VI: How Global is Global TM?...23 Section VII: Best Practices Appendix A: About Our Sponsors...26 > Amber Road...26 > CargoSmart Limited...26 Table of Contents > INTTRA...27 > JDA Software Group, Inc...27 > LeanLogistics...28 Appendix B: About Our Partner...29 > Retail Industry Leaders Association (RILA)...29 Appendix C: About American Shipper Research...30

5 Figures Figure 1: Industry Segments...5 Figure 2: Company size...5 Figure 3: Job Titles Surveyed...6 Figure 4: Definition of Visibility Shippers vs. 3PLs...8 Figure 5: Visibility Days Prior to Shipment...9 Figure 6: Does Visibility Provide Quantifiable ROI Shippers vs. 3PLs...10 Figure 7: Does Visibility Provide Quantifiable ROI Large Shippers vs. Small/Medium Shippers...11 Figure 8: What Systems Provide Visibility Input Manufacturers vs. Retailers Figure 9: Are You Working to Improve Data Quality Systems-Based vs. Manual Shippers...13 Figure 10: Number of Unique Integrations Shippers vs. 3PLs...14 Figure 11: Quality of Integrations with Global TM Platform...15 Figure 12: Quality of Data Timeliness From Partners...16 Figures Figure 13: Quality of Data Completeness from Partners...16 Figure 14: Quality of Data Accuracy From Partners...17 Figure 15: Definition of Visibility System-based vs. Manual Shippers...18 Figure 16: Current Global TM Platform...19 Figure 17: Current vs. Most Critical Global TM Functionality...20 Figure 18: Does Global Transportation Platform Meet Needs Shippers vs. 3PLs...21 Figure 19: Biggest Benefit of Using Global TM Shippers vs. 3PLs...22 Figure 20: Biggest Challenge in Using Global TM...22 Figure 21: Geographies Covered by Global TM Platform...23 Figure 22: Location of Logistics Decision-Making Power...24 Figure 23: Difficulty in Managing Foreign-to-Foreign Shipments...24

6 4 Section I: Introduction Welcome to American Shipper s fifth annual benchmark study of global transportation management, produced in conjunction with the Retail Industry Leaders Association (RILA). This report annually looks into the trends that impact how shippers and logistics service providers manage their international freight transportation processes, and the technology that helps support those processes. This year, readers might notice a small, but substantial change in the title of the report. The report is now called the Global Transportation Management Benchmark Study to reflect the way shippers supply chains have grown. Shippers and their service partners don t just manage the movement of goods from one country into another rather, they manage freight flows across multiple countries, with sourcing markets quickly evolving into consumer markets. Section I: Introduction This report also differs a bit from those in years past in that it dives deep into three particular areas of global transportation management: visibility; the quality of data underlying that visibility; and the extent to which shippers transportation management has gone global. Nearly 350 qualified global logistics practitioners participated in the survey from early September through early October. It s important to recognize that global transportation management is a broad term that covers the full cycle of transportation activity, including procurement, planning, order management, tendering, event management, and financial settlement. For the purposes of this study, the focus is placed specifically on the stages involving planning through event management and the visibility into each leg of those processes. Procurement and settlement are purposely set aside to focus on the blocking and tackling of global logistics management. It is also critical to understand that this benchmarking initiative strictly pertains to global and cross-border transportation management. Qualified respondents represent a variety of industry segments, including retail, manufacturing, materials, and third-party logistics. Responses from carriers, consultants, technology vendors, and other unqualified respondents are not included in the aggregate data presented of this report. Distribution channels for the 27-question benchmarking survey included American Shipper s Website, lists, and newsletters. In addition, RILA s members were invited to participate via promotions directly from associatiom. As a policy, American Shipper does not share any individual survey responses. All data is displayed in aggregate only.

7 Section II: Demographics A typically broad mix of industry groups participated in this year s survey, with a little more than a third of respondents coming from the 3PL sector, and around a quarter each from the retailing and manufacturing sectors. In terms of company size, participants broke evenly between small, medium, and large, characterized by those companies that have sales of less than $100 million annually, those with sales between $100 million and $1 billion, and those with sales of more than $1 billion. American Shipper finds particular significance in using the $1 billion in sales marker as a threshold for comparison. Figure 1: Industry Segments 5 12% 8% 13% 5% 4% 22% 37% 3PL/Forwarder/NVOCC/Intermediary Retail/Wholesale Process manufacturing Discrete manufacturing Government/Public Sector Raw materials/commodities Engineering/Construction/Energy Section II: Demographics 304 total respondents Figure 2: Company size 37% 34% Less than $100 million Between $100 million and $1 billion More than $1 billion total respondents

8 More than half of respondents in this year s survey identify themselves as managers, with another 20 percent at the director level. The rest of the respondent pool is split evenly among executives and staff. Figure 3: Job Titles Surveyed 2% 8% C-Level (CEO,CIO,CFO, etc) Executive (SVP, VP, GM, etc.) Director Manager 6 53% Staff Other, please specify 167 total respondents Section II: Demographics

9 Section III: Defining Visibility This report has traditionally looked at what visibility shippers have into their freight transportation process, but this year s report attempted to dive deeper into the issue. Visibility has become a highly sought-after component for shippers, and a necessary offering for logistics services providers. But there remains a lack of clarity about what visibility constitutes. Speak with five different shippers and you ll get five slightly different definitions for visibility. The same is true with freight forwarders. Respondents to this year s survey were pointedly asked for their definition of visibility, and the responses fell into four broad categories: those who view visibility simply as having knowledge about shipment details; those who see it as being about tracking-and-tracing their shipments; those who see it as having a true end-to-end view of their freight transportation process; and those who see visibility as incorporating some degree of business intelligence and analytics into the information gathered. 7 Among the gathered responses, these were some of the most compelling ones: Access to details involving the product, the packaging, the terms, the destination and the availability from manufacture to delivery. Real-time knowledge of position, possession, and availability of goods. The ETA of the next handoff, the final arrival at port, and the final destination, as well as the flow of funds and the documented approval processes that affect final delivery. The ready availability of a standardized set of data in a searchable format specific to planned and in-transit shipments that provides accurate assessment of shipment status, size, schedule, content and cost. Section III: Defining Visibility

10 Figure 4: Definition of Visibility Shippers vs. 3PLs % 53% Shippers 3PLs 4 33% 3 22% 25% 7% 4% 7% 8 Shipment Details Pure Track and Trace True End to End View BI/Analytics 142 total respondents Section III: Defining Visibility At its most basic level, visibility is the collection of key pieces of information about a shipment, and the dissemination of that information to relevant stakeholders. How complex the data gathering and dissemination is depends on the demands of the ultimate consumer of visibility. As Fig. 4 shows, there is little consensus among shippers and 3PLs about what constitutes visibility. Shipper respondents were three-times more likely than 3PLs to view visibility as merely knowing details about a shipment. But forwarders were more likely than shippers to define visibility on the more sophisticated end of the spectrum. This makes sense in that forwarders increasingly see themselves as providers of technology and data aggregators, not just movers of freight.

11 Figure 5: Visibility Days Prior to Shipment 3 28% 28% Systems-based Shippers 25% 22% Manual Shippers 15% 13% 18% 1 16% 13% 13% 13% 7% 8% 5% Less than 24 hours 1-2 days 3-5 days 6-10 days days More than 30 days 189 total respondents 9 Fig. 5 shows the way this report has traditionally looked at visibility how far in advance does a shipper know about his or her freight. In other words, how far ahead of time does a shipper know about the freight before it has even become freight. Breaking respondents up between those that use a global transportation management system and those that don t, it s clear that respondents using a system are more than twice as likely as those that don t to have a view of their shipment in that window of 10 to 30 days before the transportation process begins. Manual-based shipper respondents, meanwhile, said they are nearly twice as likely to only have visibility to their freight less than 24 hours before shipment. Section III: Defining Visibility

12 Figure 6: Does Visibility Provide Quantifiable ROI Shippers vs. 3PLs 45% 42% Shippers 4 35% % 3PLs 25% 15% 15% 1 23% 10 5% Strongly agree Agree Uncertain 6% 6% Disagree Strongly disagree 4% N/A - We have not made any investments in visibility 140 total respondents Section III: Defining Visibility One of the hardest areas of visibility for IT vendors and LSPs to communicate to shippers is the return on investment. In many cases, visibility provides a hard-to-define benefit that nonetheless exists. This is a generalization, of course. There will be shippers that derive clear-cut benefits from their visibility systems reduced inventory, shorter transit times due to pinpointing chokepoints, and less staff required to manually pull status information from various carriers. But many shippers, and often even forwarders, have a difficult time determining the dollar benefit of visibility. Fig. 6 underscores this, with around two-thirds of shipper respondents saying they can identify the ROI from visibility. The other third said they are either uncertain of the benefits or unable to quantify them. Nearly a quarter of respondents said they haven t made any investment in visibility. A slightly higher percentage of forwarders (about 75 percent) said they can identify the ROI in their visibility investment.

13 Looking at the same issue through the lens of shipper size, nearly 36 percent of small and medium shippers said they can t identify a ROI on visibility, or are uncertain about it. Again, a little more than half of respondents said they can tell what their ROI is. Figure 7: Does Visibility Provide Quantifiable ROI Large Shippers vs. Small/Medium Shippers 45% 42% Large Shippers 4 35% 34% Small/Medium Shippers 3 28% 25% 24% 11 15% 17% 12% 15% 15% 5% Strongly agree Agree Uncertain 6% 6% Disagree Strongly disagree N/A We have not made any investments in visibility 140 total respondents Section III: Defining Visibility

14 12 One of the crucial elements of building and maintaining a visibility system is the work it takes to connect all the components of a transportation chain. Remove a single link from a shipper s chain, and the chain breaks. In this case, it s the chain of information. True visibility comes from having insight into every leg of a transportation move, but that s often easier said than done. Practitioners tasked with managing visibility whether with a shipper or 3PL know it s more than just connecting with service partners like ocean carriers, trucking companies, railroads, and customs agencies. It s also about effectively drawing information from other systems, some internal and many external. Fig. 8 shows that visibility users must pull data from a variety of systems to complete their puzzle. Both manufacturers and retailers rely on their 3PLs to support their visibility, but manufacturers rely on their ERPs and domestic transportation management systems (TMS) more than retailers, while retailers rely more on their warehouse management systems, ocean booking portal and international TMS. Section III: Defining Visibility Figure 8: What Systems Provide Visibility Input Manufacturers vs. Retailers 3PL/Managed service ERP Domestic Transportation Management System (TMS) Inventory Management System 2 28% 35% 38% 33% 44% 55% 62% Manufacturers Retailers Warehouse Management System (WMS) 27% 43% Ocean Booking Portal International Transportation Management System (ITMS) 24% 24% 28% 38% N/A We do not have a system that provides visibility 13% total respondents

15 Section IV: Measuring Data Quality Behind every great visibility system is great data timely, accurate and complete data. Recognizing how crucial data quality has become, this report endeavored this year to explore the quality of data shippers and 3PLs have, and what they re doing to improve it. Nothing underscores the point more than Fig. 9, which shows shippers whether using a system or not are intent on improving their data quality. Nearly 90 percent of systems-based shippers and 75 percent of manual, or spreadsheet-based shippers, say they are actively working to improve data quality. More than half of systems-based shippers said they strongly agree that improved data quality is a priority. It makes sense that systems-based shippers would have even more impetus in this regard. Feeding reliable, accurate data into a system can alleviate man-hours spent chasing shipment status updates, or auditing shakier data 13 Figure 9: Are You Working to Improve Data Quality Systems-Based vs. Manual Shippers % Strongly agree 3 37% 35% Moderately agree 6% Uncertain 2% 2% 2% 2% 2% Moderately disagree Strongly disagree N/A 12% Systems-based Shippers Manual Shippers 172 total respondents Section IV: Measuring Data Quality

16 The challenge in visibility often comes from the sheer number of data integrations needed to properly run a system. Fig. 10 shows the bulk of respondents have between one and 10 such integrations, a somewhat manageable figure. But more than a third of shippers, and nearly 30 percent of 3PLs, have more than 10, and one in five shipper respondents said they had more than 30 integrations. That s a lot of complexity to manage. Figure 10: Number of Unique Integrations Shippers vs. 3PLs % 61% Shippers 3PLs Section IV: Measuring Data Quality 3 8% 0 unique integrations 1-10 unique integrations 17% 16% unique integrations 12% More than 30 unique integrations 126 total respondents

17 More to the point, are those integrations providing quality data? Fig. 11 shows not many are providing what respondents would consider high quality data. There isn t a single category of integrations where as many as 50 percent of respondents said data quality is good or great. Most fell into the good-to-adequate to not-very-good range. Figure 11: Quality of Integrations with Global TM Platform % 1 23% 28% Domestic transportation management system 11% 15% 22% 6% 36% ERP 4% 14% 15% 25% 15% 23% Freight payment 25% 21% 13% 4% 28% Inventory management 17% 25% 14% 7% 28% 14% 2 11% 6% Procurement Purchase order management 5% 16% 21% 38% Sales and operation planning 24% 28% 5% 25% 3PL-managed systems 18% 23% 15% 5% 3 Warehouse management Very well Well Adequately Not well Not well at all N/A 81 total respondents 15 Section IV: Measuring Data Quality

18 In years past, this report has asked respondents to rate the timeliness, completeness, and accuracy of its transportation partners, but never separately. This year, respondents were asked to rate those three elements individually. In truth, there is not much variation. Third-party logistics providers, ocean carriers, and air carriers rate the best across all three metrics, while rail and drayage operators rate at the bottom. Respondents reported slightly better quality in terms of timeliness and accuracy versus completeness across all partners. Figure 12: Quality of Data Timeliness From Partners % 36% 5% 28% 32% 24% 17% 25% 13% 28% 25% Excellent Good Fair Poor Section IV: Measuring Data Quality % 3% 22% Air Carriers 33% 4% 1% 2 Customers 32% 7% Motor Carriers 28% 12% 2% 25% Drayage Operators 42% 21% 7% 12% 1% 27% 8% 2% 3 41% 7% 11% Ocean Rail/ Suppliers Carriers Intermodal Service Providers Figure 13: Quality of Data Completeness from Partners 41% 22% 2% 11% Third Party Logistics Providers Very Poor N/A 117 total respondents % 33% 22% 7% 2 22% 22% 8% 27% 13% 31% 26% Excellent Good Fair Poor % 26% 6% 1% 23% 27% Air Carriers Customers 38% 4% 22% Motor Carriers 1% 32% 27% Drayage Operators 1% 31% 32% 2% 11% 2% 23% 7% 2% 32% 41% 6% Ocean Rail/ Suppliers Carriers Intermodal Service Providers 38% 23% 2% 11% Third Party Logistics Providers Very Poor N/A 112 total respondents

19 Figure 14: Quality of Data Accuracy From Partners % 41% 8% 24% 34% 8% 38% 8% 3 26% 21% 38% 3 23% 38% 25% 3 Excellent Good Fair Poor Very Poor N/A 4 21% 3% 24% Air Carriers 5% 2 Customers 28% 3% 23% Motor Carriers 7% 27% Drayage Operators 1% 23% 6% 13% 5% 31% 2% 33% 7% 12% Ocean Rail/ Suppliers Carriers Intermodal Service Providers 23% 2% 11% Third Party Logistics Providers 112 total respondents 17 One other thing to note: large swathes of respondents in all three metrics reported data quality was fair. That s hardly a damning indictment, but also not a ringing endorsement for the state of data quality among any individual providers. Section IV: Measuring Data Quality

20 18 Section V: Automation s Role in Global Transportation Management Whether a shipper uses a transportation management system is an integral variable in determining how it defines visibility. Indeed, it s little surprise that shippers with a manual approach were more likely than systems-based shippers to characterize visibility along the least sophisticated lines, as seen in Fig. 15. Eighty percent of these manual shippers define visibility as having access to shipment details or basic track-and-trace, compared to 64 percent of systems-based shippers. Alternatively, systems-based shippers were nearly twice as likely to consider visibility to be either an end-to-end view of their transportation process or an analytics and business intelligence-driven process. Perhaps the message here is that shippers already using a system are looking to evolve to the next stage of visibility, while those that are not using a system simply aspire to tackle visibility in its most basic forms. Section V: Automation's Role in Global TM Figure 15: Definition of Visibility System-based vs. Manual Shippers 6 57% 5 48% 4 31% 3 23% 16% 17% 6% 3% Shipment Details Pure Track and Trace True End to End View BI/Analytics Systems-based Manual 142 total respondents

21 Fig. 16, meanwhile, shows the variety of ways in which modern shippers handle global transportation management. Less than a quarter of respondents said they handle it manually, which is encouraging, especially considering that percentage tends to be higher in other American Shipper operations benchmark reports. That a mix or hybrid of these various approaches remains the most common platform is not surprising. Transportation management remains a tricky task to tackle, considering the coordination of foreign transportation providers and management of a freight move as it transitions from international to domestic. As shippers seek to align their TMS with upstream capabilities like purchase order management, the task gets trickier. The reality is that global transportation management is hard to fit under one umbrella, even in an environment where cloud-based deployment models and communities are gaining undeniable traction. 19 Figure 16: Current Global TM Platform 5% 32% 5% 4% 1% 16% 23% 15% Manual, we handle all global transportation with phones/faxes/ 3PL(s) represents us in foreign countries and manage most/all of the activities In-house developed and maintained software Remote via on-demand systems or platforms provided by technology vendor(s) Remote via cloud systems or platforms provided by technology vendor(s) Traditional licensed installed software provided by technology vendor(s) A mix or hybrid of all of these None of these 199 total respondents Section V: Automation's Role in Global TM What functions shippers have and what they consider most critical is presented in stark relief in Fig. 17. While track-and-trace, scheduling, booking, and documentation production are the top current functions, among that list, only track-and-trace is also considered among the most critical. Tellingly, analytics is the second most commonly cited critical function, followed by better connectivity to supply chain partners. One thing to note: Almost across the board, what shippers consider to be critical is far less than what they have, indicating IT vendors are perhaps providing more system than most shippers need.

22 Figure 17: Current vs. Most Critical Global TM Functionality 20 Section V: Automation's Role in Global TM Tracking & tracing Shipment scheduling Electronic shipping documentation Electronic booking Order management Analytics Connectivity to customers, vendors, partners, etc Freight invoice management Event management Collaborative transportation management Route/schedule optimization Contract management Transportation network optimization Mode optimization Parcel shipping Claims management Financial settlement Returns/reverse logistics Dynamic rate engine Freight exchange Other Network design 5% 5% 4% 3% 3% 1% 6% 11% 11% % 15% 12% 12% 11% 3% 8% 15% 18% 24% % 27% 18% 24% 1 24% 44% 41% 45% 41% 4 45% 4 56% 56% 6 71% Most Critical Current 79 total respondents

23 To further this point, the report asked shippers directly to rate whether their global transportation management platform was meeting their needs. Fewer than half of both shippers and 3PLs said their system met all their needs. Around 40 percent of both groups said it covers some or none of their global transportation needs. Not a single shipper said their system exceeds their needs, another sign that managing global transportation is not a simple exercise. Figure 18: Does Global Transportation Platform Meet Needs Shippers vs. 3PLs 45% 4 35% 3 42% 37% 31% 3 Shippers 3PLs 21 25% 15% 5% It exceeds my global transportation needs 8% 8% It meets my global transportation needs 14% 14% Uncertain It covers some, but not all of my global transportation needs It covers none of my global transportation needs 5% N/A 2% 127 total respondents Section V: Automation's Role in Global TM

24 So what benefits do shippers and 3PLs get from their global platform? Both groups largely cited increased efficiency and better data as the biggest benefits. Shipper respondents reported marginally more benefit in transportation service, while more 3PLs said a reduction in headcount was a benefit. Interestingly, there was virtual consensus between shippers and 3PLs about the biggest challenges of global transportation management. The cost to invest in a system, and the challenge in integrating it with other internal systems were considered slightly bigger challenges than integrating with external service providers and systems or training staff to maximize the value of the platform. Figure 19: Biggest Benefit of Using Global TM Shippers vs. 3PLs 22 Section V: Automation's Role in Global TM Figure 20: Biggest Challenge in Using Global TM % 85% Efficiency 61% Better transportation rates 66% 57% 43% 35% Better transportation service 2 4 Reduction in headcount 61% 52% Data accuracy 51% 4 46% 47% Shippers 3PLs 191 total respondents Shippers 3PLs Cost to invest in the platform Lack of integration between global transportation platform and other internal systems Lack of integration between global transportation platform and systems from external service providers Training required to maximize value of platform 195 total respondents

25 Section VI: How Global is Global TM? Another area of emphasis in this year s report was measuring just how global shippers have become. Fig. 21 highlights that shippers use their global transportation management platform to manage a number of geographies, with Asia and North America unsurprisingly the most well represented. Large shippers, in particular, report that their systems reach every corner of the trading world. Figure 21: Geographies Covered by Global TM Platform Asia North America 77% 72% 77% 6 Large Shippers Small/Medium Shippers 23 Europe 65% 55% Latin America 56% 45% Middle East 44% 17% Other 13% 3% N/A 8% total respondents Section VI: How Global is Global TM?

26 Yet respondents to the survey said their logistics decision-making power is overwhelming concentrated in North America. This decision-making power is spread out slightly more among 3PLs. Notably, few organizations said their decision-making power is decentralized. Figure 22: Location of Logistics Decision-Making Power North America Our global transportation management decisions and policies are not centralized Europe 4% 5% 4% 7% 71% 87% Shippers 3PLs N/A 2% 3% 24 Latin America Asia 1% 4% 1% Section VI: How Global is Global TM? Other 1% 1% Middle East 1% 1% With shippers expanding into new markets, more and more have to incorporate moves between foreign markets ones that don t touch their home market at all. Respondents were asked whether these foreign-to-foreign global transportation moves were harder to manage than inbound or outbound moves from their home market. Not surprisingly, 40 percent said these moves were more difficult to manage. Another 37 percent said they were about the same. Hardly any said their inbound/outbound shipments were harder to manage. 351 total respondents Figure 23: Difficulty in Managing Foreign-to-Foreign Shipments 14% 4 3% 6% Much more difficult to manage foreign-to-foreign moves More difficult to manage inbound/outbound home market moves Uncertain About the same 37% More difficult to manage foreign-to-foreign moves 65 total respondents

27 Section VII: Best Practices Each American Shipper benchmark report seeks to impart strategic knowledge on its readers, and in this case, the emphasis is on improving global transportation management through better visibility and data quality. This report advocates that shippers: 1. Move toward a more sophisticated view of visibility that incorporates upstream components, like purchase order management, as well analytics that feed into planning and optimization. 2. Strive to understand and delineate the costs of visibility and the return on investment you get from your system or process. 3. Establish relationships with transportation providers and service partners with the understanding that data quality is paramount. 4. Examine your current global transportation management platform intently, and determine whether it is the correct approach for where your company will be in the next two to five years. 5. Work with your IT vendors and logistics partners to create a system that truly meets your needs not more, not less. 6. Clearly spell out what the biggest benefits of your global transportation management system are a lack of clarity will inhibit future investment. 7. Make sure your platform is capable of going to the places your company plans to go as companies enter new markets, global transportation becomes exponentially more complex. 25 Section VI: How Global is Global TM?

28 Appendix A: About Our Sponsors Amber Road Amber Road is the world s leading provider of on-demand Global Trade Management (GTM) solutions. By helping organizations to comply with country-specific trade regulations, as well as plan, execute and track global shipments, Amber Road enables goods to flow unimpeded across international borders in the most efficient, compliant and profitable way. 26 Appendix A: About Our Sponsors Our Global Logistics solution provides a range of transportation management, logistics and supply chain visibility capabilities for importers and exporters including contract and rate management, carrier selection and booking, freight audit, order and shipment visibility, data quality management, and performance management reporting. By taking a holistic, integrated approach to global trade, Amber Road accelerates the movement of goods across international borders, enhances compliance and reduces global supply chain costs. For more information, please visit or us at Solutions@AmberRoad.com. CargoSmart Limited CargoSmart Limited is a Software as a Service (SaaS) global shipping and logistics solutions provider that enables shippers, consignees, logistics service providers, NVOCCs, and ocean carriers to keep cargo moving and delivered on time. Award-winning shipment management applications include visibility, documentation, contract management, compliance, and private label solutions. CargoSmart launched its services in October Leveraging over 10 years of experience and an extensive network of over 30 ocean carriers, CargoSmart is dedicated to providing high quality products and services that consistently meet or exceed customers requirements and expectations. CargoSmart has successfully helped over 22,000 customers worldwide to lower transportation management costs, streamline operations, and reduce the risk of late shipments. To learn more, please visit

29 Appendix A: About Our Sponsors, Continued INTTRA INTTRA is the world s largest, multi-carrier e-commerce network for the ocean shipping industry. INTTRA professionals work with 49 leading carriers and NVOCCs, 109 software alliance partners, as well as their customers, to streamline and standardize their shipping processes worldwide through a network of more than 220,000 shipping professionals. Over 530,000 container orders are initiated on the INTTRA platform each week, representing 21 percent of global ocean container trade. For more information, visit JDA Software Group, Inc. JDA Software Group, Inc., The Supply Chain Company, offers the broadest portfolio of supply chain, retail merchandising, store operations and all-channel commerce solutions to help companies manage the flow of goods from raw materials to finished products and into the hands of consumers. JDA s deep industry expertise and innovative cloud platform help companies optimize inventory, labor and customer service levels. As a result, JDA solutions have become the standard for the world s leading retailers, manufacturers and distributors. To learn more, visit jda.com or info@jda.com. JDA The Supply Chain Company Worldwide Headquarters Scottsdale, Arizona, U.S.A. Office: Worldwide: Appendix A: About Our Sponsors

30 Appendix A: About Our Sponsors, Continued LeanLogistics LeanLogistics is a global solutions provider of transportation management system (TMS) applications and supply chain services enabled by the industry s largest transportation network. The LeanLogistics Transportation Network empowers shippers, carriers and other participating members to reduce costs, improve services and gain complete visibility. 28 Used by many Fortune 1000 companies, LeanLogistics LeanTMS delivers complete transportation planning, execution, settlement and procurement, as well as supply chain visibility and business intelligence. LeanTMS processes millions of shipments across the largest multimodal transportation network in the US. Appendix A: About Our Sponsors For outsourced transportation solutions, LeanLogistics offers Managed Transportation Services that leverage the data intelligence of the network with transportation expertise to ensure clients receive maximum value. For additional information, please visit

31 Appendix B: About Our Partner Retail Industry Leaders Association (RILA) RILA is the trade association of the world s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad. For additional information visit 29 Appendix B: About Our Partner

32 Appendix C: About American Shipper Research Background Since our first edition in May 1974, American Shipper has provided U.S.-based logistics practitioners with accurate, timely and actionable news and analysis. The company is widely recognized as the voice of the international transportation community. In 2008 American Shipper launched its first formal, independent research initiative focused on the state of transportation management systems in the logistics service provider market. Since that time the company has published more than a dozen reports on subjects ranging from regulatory compliance to sustainability. Scope 30 Appendix C: About American Shipper Research American Shipper research initiatives typically address international or global supply chain issues from a U.S.-centric point of view. The research will be most relevant to those readers managing large volumes of airfreight, containerized ocean and domestic intermodal freight. American Shipper readers are tasked with managing large volumes of freight moving into and out of the country so the research scope reflects those interests. Methodology American Shipper benchmark studies are based upon responses from a pool of approximately 40,000 readers accessible by invitation. Generally each benchmarking project is based on qualified responses to a question survey depending on the nature and complexity of the topic. American Shipper reports compare readers from key market segments defined by industry vertical, company size, and other variables, in an effort to call out trends and ultimate best practices. Segments created for comparisons always consist of 30 or more responses. Library American Shipper s complete library of research is available on our Website: AmericanShipper.com/Research. Annual studies include: Global Trade Management Report Global Transportation Planning & Procurement Benchmark Global Transportation Management Benchmark Global Transportation Settlement & Measurement Benchmark Import Operations & Compliance Benchmark Export Operations & Compliance Benchmark Contact Eric Johnson Research Director American Shipper ejohnson@shippers.com

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