DC Velocity - October 2012

transportationreport PARCEL EXPRESS

hole for most companies.”
Cloud technology could fill that
hole, many believe. In a cloud com-
puting setup, the parcel-shipping
application and data for it reside on
an Internet server. Anyone in the
organization can access the applica-
tion and data from any location as
long as they have a Web browser.

Users of cloud technology don’t have to invest in capital equipment such as servers, and are freed from the ongoing and often escalating costs of upgrading and maintaining their systems. Cloud software providers manage the network and systems, and charge either a transaction fee—known in IT lingo as “paying by the drink”—or a subscription fee, often assessed on a monthly basis.

Supporters of the platform say it
gives everyone on the system real-
time information to manage com-
pliance with shipping policies,
ensure the contracted rates and the
invoiced charges are aligned, and
allocate expenses accurately, among
other things.

MAILROOM IN THE CLOUD

Phoenix-based Apollo Group, the for-profit adult educational giant, has seen the benefits of using a cloud system for its parcel shipping.

Apollo uses Kewill’s cloud-based desktop shipping program to connect the more than 22,000 employees at its flagship University of Phoenix institution.

Each employee has his or her own user ID and password to log on to the system, according to Beth Gambaro, director of facilities at Apollo. Regardless of their location, all employees have

real-time visibility of providers, rates and service levels, and compliance requirements, she said. Because the system is automated, employees don’t have to pore through manual routing guides to decide which carrier to use.

The Kewill system connects Phoenix’s parcel shipping activities—Phoenix ships about 3,000 pieces a month— with its mailroom receiving operations and its back-end billing and reporting functions, according to Gambaro. Before the system was installed two years ago, Phoenix employees would bring packages to the company mailroom for processing, she said. Today, much of that work is done on the desktop, reducing or eliminating the need for mailroom employees to perform these labor-intensive activities.

A BETTER MOUSETRAP

Software vendors pushing cloud-based solutions believe they’ve just scratched the surface in persuading companies— shippers, couriers, parcel companies, and third parties—to ditch their old systems and switch to the cloud. Some providers say they’ve already seen the shift and believe there is much more to come.

For example, CXT Software, a Phoenix-based vendor to “last-mile” parcel providers (think a courier that ships medicines from a DC to a pharmacy), introduced cloud services in April 2009 to accompany its traditional offerings. Today, the cloud accounts for about 40 percent of CXT’s revenue, and 90 percent of its new customers come on board using the cloud-based platform, according to Darin Soll, the company’s CEO.

By contrast, growth in CXT’s traditional on-premise business has remained flat during that time, though it still represents 60 percent of the company’s revenue base, Soll said. About two-thirds of CXT’s customers are small to mid-sized businesses, many of which lack the in-house capabilities to run a system to maximum benefit.