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  September 15th, 2014 | Written by

Tech Savvy

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Logistics software platforms, used widely for domestic shipments, are now catching on in the export market and are including other related services, such as federal, foreign and international export-related rules and regulations, often utilizing cloud technology as an off-site service provider. Such technology developments have been accelerating in number and frequency, logistics officials say.

“Use of the cloud is a natural progression for exporters who want the benefits that domestic shipping has been receiving,” says Ian Hedges, vice president of Foster City, California-based E2open, which has a platform that, among other benefits, connects companies with truck, rail, vessel and air carriers and has more than 125,000 registered users in 69 countries. “But logistics is just one component.”

The cloud and other newer technologies can connect all the steps involved in exporting, including ever-changing rules and regulations, Hedges and others note.

“It’s been a significant evolution,” comments Craig Stoffel, vice president of Global Logistics at Omaha, Nebraska-based Werner Enterprises, “and it comes in almost three- to five-year waves. When looking back, you’ll notice a significant difference every three to five years. We have customer requirements that come out continuously and we’re constantly modifying and improving our platform to accommodate all those new requests.”

Adding new programs to existing platforms is being done by all service providers, not only Werner.

“But the real game changer,” Stoffel explains, “was everything going web-based, cloud-based and mobile. Now everyone’s iPhone or Blackberry or Galaxy has applications that allow them to view inventory levels, monitor shipments, receive status update—all in real time. So technology, as it has advanced, has pushed everything to transparency.”

“Everything we do is in the cloud, including our email,” says Scott Malat, chief strategy officer at XPO Logistics, Inc. “The move, technology wise, has been toward more consistent quick releases. We develop our technology and put out new releases on average once a month, sometimes more often. We have over a hundred IT projects in the pipeline at any given time.”

“The technology tools now available are unlimited,” says Carl Livesay, chairman of the Maryland/D.C. District Export Council.

And data storage—from shipment locations to import and export regulations—can change constantly. This data and other information can be accessible to exporters on one or more software programs, programs that may be proprietary for a specific company or purchasable as a single program or as part of multiple separate programs, Malat and others explain.

Choosing different programs from different service providers, says Werner’s Stoffel, offers the flexibility of switching from one provider for one specific service to another provider who can provide better service in that specific area.

“Most customers are going to engage a technology platform that allows them a single place to look,” he says. “The most successful platforms accommodate various types of traffic, modes of transportation, and different types of transactions, different currencies and even different international standards.”

Due diligence is done, Stoffel explains, on shippers, shipments, destinations and customers, and Werner’s platform keeps up with nations’ rules and regulations for imports.

“Every country has its own rules and regulations for imports,” he says, “and your technology has to keep you in compliance. Dealing with international shipping can’t be done by hand. You have to engage technology that provides an ease of doing business around compliance.

“Companies like ours,” he adds, “have developed platforms that facilitate all the transportation transactions, facilitate a lot of the government-required filings, and really facilitate a lot of the information exchanges that have to happen along the course of exporting.”

Stoffel estimates that most customers are going to want a single view of their supply chain and will try to engage a technology platform that provides a single place to look for information and assistance.

Ty Bordner, vice president of East Rutherford, New Jersey-based Amber Road, notes that there are “thousands upon thousands of documents from around the world that are needed” by companies doing business globally.

His company’s export software generates the correct documents for each export shipment and helps generate such required information as product codes, product classifications, product physical descriptions and measurements, tariff and export control numbers, all of which are needed to be able to flow through the destination country’s customs controls. It also calculates the duties and fees that will be owed and alerts when licenses are required for products being shipped—and the software generates the proper license forms when needed.

“Our software also helps execute logistics,” Bordner points out. “Our transportation management takes your global carrier contract and puts it into the system so that you can book your cargo online. You log into a web-based application, see all the rates and sailing schedules.

“What makes us different,” Bordner stresses, “is that we combine the compliance regulations with a logistics execution. Most providers don’t do that. They don’t combine the two under one single solution. But there’s no reason to have two different pieces of software—one that does compliance and one that does logistics. We think having one piece of software is the way to go.”
With all these challenges covered by one piece of software, not only are export costs reduced but exporters can feel comfortable about their shipments reaching their destinations, Bordner says.

“A lot of people who implement our software now feel confident to go ahead and export, and not have to fear doing something wrong and being subject to heavy fines, penalties, loss of export privileges and shipments not reaching their destinations,” Bordner says.

But before all that occurs, Amber Road’s software performs restricted party screening, using a list in which the names and addresses of the companies on “all the ‘bad-guy’ lists from the United States and other countries” are combined. “We also screen for embargoes against shipping to various countries,” he points out.

Amber Road’s software also automatically files all of its export statistics with the Automated Export System (AES), which is used by governments around the world to capture their trade data.

Bordner explains that the company’s software also enables exporters and shippers to combine shipments for either breakout shipments (a combined shipment that goes to a single destination in a country and then is broken into shipments to other destinations within that country) or for multi-leg shipments (a large shipment that, upon arrival in one country, is broken into shipments to other countries as well as a shipment within the arrival nation).

“Our software helps with both of those,” he says, explaining the shipping and broker cost savings. “Not everybody’s software can do that like our software does. It’s a very unique software that can handle multi-leg, cross-border shipments.”

While Amber Road’s software screens product purchasers, XPO’s software screens carriers—for pricing, availability and routes—helping find the best carrier to a port or other destination for each load.

“We have relationships with more than 26,000 carrier partners,” says Malat. “That’s mostly truck companies, but also air, rail and ocean.”

The software enables exporters to obtain the best shipping price for the domestic portion of shipments before even finding a carrier.

“A customer will call us, for example, and say, ‘I want to get from Denver to the port in Los Angeles,’ and we’ll price them right on the phone and come to an agreement [on price]. And then it’s up to us to find the right carrier for that load,” Malat explains. “That’s where our technology comes in. Our IT team created algorithms that provide actionable pricing information and carrier procurement as well as analytic capabilities for truckload market conditions.

“We can pull in real time market data to highlight demand and availability in specific lanes and regions. This gives our sales people price and capacity visibility,” he points out.
Amber Road’s Bordner sees the export logistics technology market, despite all the advances, as “still a green field.”

“If you look at the domestic transportation market with regard to software,” he says, “it’s been saturated. People have been developing domestic transportation solutions for 30 years and there aren’t many companies that don’t use software for domestic transportation.

“In the global trade world, it’s still a green field. The percentage of companies that are leveraging software to help them export ranges anywhere from 20 to 30 percent to maybe as high as 50 percent. That leaves 50 to 80 percent that aren’t yet using software to help them in this area. That’s good news for us as a growing software company,” he concludes.