Case Study 9-2 C.H Robinson Worldwide, Inc.

C.H Robinson, headquartered in Eden Prairie, Minnesota is one of the largest non-asset based 3PLs in North America and the world. The firm has extended its service from its historical brokerage service to virtually every aspect of transportation and logistics service, which ranges from truckload/ocean/air shipping to TMS platform services and supply chain consulting. Today the company delivers supply solutions to more than 113,000 customers across the world, and it works with 107,000 contract carriers of all modes and suppliers through an integrated network of 280 offices and more than 14,000 employees.

You, an undergraduate junior student majoring in supply chain management at a major state university, were just hired by C.H. Robinson as a summer intern at any one of C.H. Robinsons global offices. Your role will most certainly involve engaging shippers and/or carriers in the process of managing freight transportation services through the use of C.H. Robinsons Transportation Management System (TMS). TMS is a technology that connects C.H. Robinson with its customers, as well as with its contract carriers, to meet the transportation needs of customers in a cost-efficient manner. Basically, customers use TMS to find the best carrier, or the best combination of carriers (which may involve multiple transportation modes), to ship freight in a timely manner while satisfying the delivery time window of consignees at minimal shipping costs. Customers also use TMS to check shipment status, manage invoices, and gather transportation data. C.H. Robinson provides two types to TMS to its customers, each of which has different features and price.

Navishphere

The first TMS is called Navisphere. This TMS is a comprehensive system that provides flexible, efficient, and integrated technology solutions to customers that bring all aspects of supply chain together. The system is capable of managing all transportation needs of customers (all modes and customs clearance globally), and allows customers to enhance supply chain visibility, optimize their business processes, connect with service providers and consignees, and obtain strategic data and reporting to help drive decisions.

Customers access Navisphere via the Internet; no installation of software is required. They can request quotes and send freight tenders at any time with detailed freight specifications (when it needs to be shipped, when it needs to be delivered, what kind of equipment is required, etc.), and the system can provide the solutions that meet the customers requirements with minimal cost. Tenders, shipment specifics, and facility profiles can be pre-established and can include defined business processes that ensure consistent data capture and timing of order lifecycle events. Communication between the shipper and C.H. Robinson can be either manual or fully automated. Once the freight tender is provided, C.H. Robinson will optimize the best way to ship the freight, so customers do not need to contact each individual carrier or negotiate rates with them. Navisphere also allows customers to obtain near real-time updates on the status of freight. Navisphere is connected with contract carriers freight tracking systems, which usually take advantage of GPS systems (either the one installed in vehicles or the GPA-capable cell phones used by vehicle operators), so that customers can monitor the progress of freight in Navisphere. In the event that shipment will be delivered late, the system notifies the customer about this incident in a timely manner and provides a new estimate of the expected arrival time. Navisphere can be integrated with customers ERP (Enterprise Resource Planning) system, so that it automates workflows between transportation and other business operations, which gives customers greater control over their supply chain activities, and allows customers to easily access transportation data for various analytics.

Navisphere is also used by C.H. Robinsons contract carriers, which allows them to access shipper freight they might not otherwise have access to due to the size of their business or technical limitations. The system used by carriers is called Navisphere* Carrier. It is used by trucking companies, and can be used by both dispatchers and drivers (the system used by drivers is called Navisphere Driver). Each driver can install Navisphere* Driver in his/her cell phone. The system then works as a communication tool between the driver and his/her manager (dispatcher) and C.G. Robinson. Drivers using the Navisphere* Driver app have access to assigned load information and maps directly on their smartphones, so that they know the location of the next load promptly without contacting the dispatcher. Navisphere Driver also allows drivers to update freight status automatically. They system uses a cell phones GPS capability to automatically send location information to C.H. Robinson on a regular basis, so that drivers can focus on driving without being bothered by phone calls or messages asking for the current location. Drivers can start the automatic tracking by selecting on way to pick up button in the app. Once tracking begins, the system receives timely location updates. Automatic stop updates are received when drivers cross a predetermined geo-fence at stop locations. After delivering a load, drivers can also use the app to submit load documents (e.g., delivery confirmation with consignee signature), which can speed up the payment process. Shippers and dispatchers can monitor all payment statuses through Navisphere too. Dispatchers can use Navisphere Carrier to manage loads for their drivers. It allows dispatchers to send load information to assigned drivers, monitor the status of all freight with hourly updates, check billing status, and find loads.

Freightview

The second TMS is called Freightview. This TMS is a tool for small and medium-sized shippers that may not have other enterprise planning and operations tools to adopt comprehensive TMS. Freightview focuses on shipping freight by trucks including both TL and LTL. Freightview uses an online platform, meaning that customers can use this TMS via standard Internet Web browsers without installing any program with their PCs. Freightview is designed to help shippers cut the time and money they spend on managing their shipping needs, and it seeks to provide streamlined quoting, booking, tracking, reporting, and visibility of shipments. It is a tool that can find efficient and cost-effective ways of shipping freight for customers with low implementation effort and a low fee-based costing model.

Small to medium- sized shippers, that normally ship less than truckload (LTL), typically must obtain quotes from multiple LTL carriers and choose the one that provides the best rates (subject to the condition that the arrival time of freight to a consignee is within the specified time window). This requires shippers to log into multiple LTL carrier websites, and provide necessary information for getting quotes multiple times, which is quite time consuming. Often, these shippers must also contact multiple TL carriers to obtain quotes and compare them with the LTL quotes, because when they are shipping freight that is LTL but fairly large, the use of LT service can sometimes save freight costs (as we discussed in Chapter 4costing and Pricing for Transportation). Hence, these shippers are very often spending much time and effort to find the best available rates, TL or LTL, for a given freight shipment, or a set of freight shipments. Freightview can help these shippers save time and effort.

Freightview works as follows. A customer first identifies the set of its preferred carriers from the marketplace of trucking companies including both LTL and TL carriers. Once this carrier set is identified, Freightview automatically obtains tariffs of LTL carriers that are included in this set. This means that after the initial set up is completed, the customer will only need to provide the freight information just once to Freightview, and it will automatically obtain quotes from all the LTL carriers in the set of preferred carriers by using the latest tariffs. Hence, the customer no longer has to log in to multiple carrier websites, or enter freight information multiple times, which will save the customer time. Freightview can also obtain TL quotes based on the freight information already entered (for LTL or TL quotes) in a timely manner, so that the customer can compare the best LTL rate with the best TL rate to find out if using TL service makes sense for a specific shipment

Freightview also allows customers to track shipments in the manner similar to Navisphere, so that customers can obtain freight status information at any time online. Freightview may be used to generate reports as well. With Freightview, customers have access to data such as on time delivery statistics (average, standard deviation, etc.) which are not generally available to many small shippers Freightview charges customers based on the volume of usage (how many freight shipments they shipped per month), so that small shippers do not need to pay large costs to use this TMS.

Question: What kinds of companies are good targets (potential users) or Freightview? Make sure that you discuss specific characteristics of target customers such as size, industries to which they belong, technological capabilities, and geographic locations.