Non-asset based logistics provider Transplace is taking to the next level a collaborative distribution program it perfected with a handful of shippers the past three years that enables them to reduce transportation costs by sharing space on a truck for cargo heading to a common destination.
The Dallas-based company has long been known for its ability to use technology to manage truck lanes for multiple clients in a coordinated fashion to eliminate empty backhauls. The TransMatch program goes further by allowing companies with facilities in close proximity to one another — and cargo going to the same or nearby locations — to co-ship rather than each dispatching full trucks they may not be able to completely fill.
Transplace on Monday said that consumer product and grocery manufacturers (CPG) — including Clorox, Colgate-Palmolive and Del Monte Foods — were now using the TransMatch service.
Last year, the third-party logistics provider won a Supply Chain Innovation Award from the Council of Supply Chain Management Professionals for its co-shipping program out of Monterrey, Mexico, for delivery in the United States. The program matched heavy cargo, which prevents trailers from being fully loaded because of weight restrictions, with lightweight cargo that fills up the cubic space before it reaches the weight capacity. The participants are Dal-Tile (tile), Whirlpool Corp. (washers, dryers and refrigerators), Convermex (disposable plastic cups), and Werner Co. (ladders).
Transplace has engineered the lessons it learned from that customer engagement to create repeatable, scalable processes for the broader market and is now replicating TransMatch in the United States for CGG manufacturers.
The program "is mature enough to promote as a stand-alone service," Transplace Vice President Brent Hudspeth told American Shipper
at CSCMP's annual conference in Denver this week. Nine CPG companies are participating in the program, he added. The collaborative distribution program involving manufacturers in Mexico is based on mixing cargo from opposite ends of the density spectrum, whereas the driving factors behind the CPG program are proximity and similar products.
The manufacturers ship from distribution centers within 20 miles of each other in the Atlanta, Dallas/Fort Worth and Southern California regions to retail warehouses or stores within a 250-mile radius, Hudspeth said. Transplace receives the tenders, makes transportation arrangements with motor carriers to make multi-stop pick ups, manages the shipment to ensure timely delivery, arranges the EDI feeds back to the customer with shipment status, pays the carrier, and invoices the shipper.
The service helps address the challenge of meeting retailers' expectations for frequent replenishment without booking transport on trucks that are less than full. Retailers also like the service because the only receive one truck instead of three, which cuts down on labor and congestion at their loading docks. Co-shipping also can help cargo owners when truck supply is tight and provides environmental benefits through lower fuel consumption and carbon emissions.
Despite its potential benefits, multi-client consolidation on truckloads has been slow to take off, analysts say, because shippers often are afraid to share information or participate in a program that could help a rival.
Kane is Able, a Pennsylvania 3PL that specializes in serving the CPG industry, is another company that offers the truck-sharing concept. In one case, several confectioners and chocolate producers ship their products together.
Hudspeth said some of the manufacturers are existing users of Transplace's transportation management system and others are not. Transplace can work those outsiders into the program as long as they provide details of their shipping patterns — the volume to a targeted set of retailers within a region so the 3PL can analyze whether they have enough loads to create the necessary density to make pick ups economically viable.
Transplace distributes the savings to its partners based on the weight or cube characteristics of their product, Hudspeth said.