Haversack Logistics Launches First-Party Logistics Management Service
For years, shippers have been limited to two principal strategies for managing logistics and transportation: keep the function in-house and cobble together various legacy and off-the-shelf systems to manage it, or outsource to a third-party logistics (3PL) firm and be captive to the 3PL’s standardized, inflexible systems, processes and ever-rising costs.
Today shippers gain a new alternative with the launch of first-party solutions provider Haversack Logistics. Its services are powered by a unique combination of advanced in-the-cloud transportation management, optimization, data connectivity and business intelligence technologies. And it’s supported by expert personnel working side-by-side with the shipper’s in-house staff to plan, optimize and execute freight transportation and logistics operations against lowest-cost, highest-service standards.
“We partner with our customer’s internal team to help them fully understand their logistics spend and opportunities, then support them with the tools and training to drive out costs, drive-up performance and retain the savings,” said Haversack President Christopher Nadeau. “Our sole focus is enabling our customer to take ownership of their logistics, and through advanced technology tools, best-practice processes, real-time analytics and support, gain true competitive advantage—without outsourcing.”
Flipping the model
In a traditional 3PL engagement, the client gives all the data and responsibility to the 3PL. The 3PL assesses the client’s logistics spend, designs a plan, optimizes it, negotiates and secures rates with carriers, and then operationally executes the plan. For this the 3PL gets a fee that can be as much as 16 percent of the spend managed. That’s the up-charge, the margin the 3PL gets for doing the work.
Under the Haversack business model, its specialists first do an assessment with the client regarding current-state volumes and costs for freight transportation and warehousing. A preliminary plan is developed, identifying cost savings and performance improvement opportunities through strategic sourcing, route and load optimization, labor management and lean continuous improvement practices.
Once the client approves the plan, a specific instance of Haversack’s in-the-cloud software platform is configured for that client. Pricing and routing data are confirmed, carrier integrations are verified, KPI’s are set, and the client’s team trained and coached on operating features and business analytics.
Nadeau noted that Haversack’s revenues are earned solely through the savings generated for the customer. “We are an invested partner in improving their P&L, so if the operational execution of our plan doesn’t generate the projected savings, we don’t earn our fees,” he said. “Our model sells itself because the client sees the value every day, how cost per mile or cost per hundredweight goes down. They have complete visibility to the costs of operating on our platform.”
Tapping into an underserved market
Nadeau says that proprietary research they did prior to launch found an underserved market: organizations that want to bring the control and functional execution of transportation and logistics back in house (or keep it in-house), and build up their internal capabilities, instead of outsourcing.
Meeting this demand required a flexible, agile partner with proven logistics knowledge, tactical operating experience and process expertise, coupled with powerful, easy-to-use software that could be quickly implemented—in 30 days or less.
“With our technology partners and engagement process, that’s the sweet spot we’re after,” Nadeau noted. “We are the anti 3PL. What gets us in the door is the ability to show true savings. Underlying that is the technology behind the solution, the methodology in how we do it, and how we maintain savings over time, even as a shipper’s freight profile and needs change week-to-week, month-to-month or year-to-year.”
Innovative technology partnerships
Haversack selected MercuryGate and project44 as technology providers for the proven capabilities of their software and services, and each company’s innovative approach to collaboration and real-time information exchange.
With MercuryGate, Haversack becomes one of the first solution providers to resell this industry-leading TMS software. Haversack holds the subscription license and as it on-boards customers to the TMS, they are individually configured with their own “private label” version on the platform. As a certified MercuryGate reseller with a complete understanding of the TMS solution, Haversack’s customers also benefit from expert professional services that help derive the greatest value from the technology.
“MercuryGate is pleased to support our customer, Haversack Logistics, as they offer a new business model to the transportation and logistics industry,” said Monica Wooden, CEO and Co-Founder, MercuryGate International, Inc. “Our years of experience with shippers in many industry verticals will enable Haversack to offer proven technology solutions to their customers.”
Withproject44, which is accessed through a global integration into MercuryGate’s TMS interface, Haversack is leveraging p44’s extensive network of API (application programming interface) connections with capacity providers to create a smarter, more productive shipping experience for their customers. project44 has been selected as the industry’s top API provider to facilitate the real-time exchange of normalized pricing information, shipment status, electronic documents and other data.
Unlike legacy systems, such as EDI or rate bureaus, the technology provider delivers a single, one-to-many integration point. This drastically reduces set-up time and costs, allowing Haversack and their customers to beat their competitors to market by an impressive margin.
“This kind of modern technology collaboration enables an unprecedented level of visibility, productivity and cost savings,” said Tommy Barnes, President of project44. “By launching with project44, Haversack and their customers will immediately have access to the industry’s largest network of multimodal capacity providers. That accelerated speed to market is not possible with any other EDI or API technology provider, and it empowers the agility necessary to successfully compete in today’s competitive landscape.”
High transparency, accountability, control
The goal, says Nadeau, is high transparency, real-time visibility and 100 percent control over LTL and truckload transportation costs and execution. “By teaming with the customer’s staff and enabling them to efficiently take advantage of advanced technologies and sophisticated business intelligence,” he explained, “we collectively drive, and are jointly accountable for, performance quality, savings and process improvement.”