DC Velocity - September 2013

BY JAMES A. COOKE, EDITOR AT LARGE

TMS
technologyreview

CO-LOADING MAY BE AN old idea, but it’s getting a new look as shippers search for ways to control rising transportation costs. It’s not hard to understand the concept’s appeal. If two or more shippers have loads bound for the same destination—typically, a mutual retail customer—co-loading, or combining those shipments on a single truck, allows them to share freight expenses.

For all its benefits, however, co-loading requires some work. For one thing, there’s the matter of identifying suitable loads—shipments going to a common destination within the same (often tight) delivery window. For another, there’s the need to synchronize the associated processes among the various shipping partners. So it stands to reason that these days, those tasks are often performed by transportation management systems (TMS)—software that can identify opportunities for co-loading and orchestrate the activities.

Automating the process provides a number of benefits, says Ben Cubitt, senior vice president of consulting and engineering at Transplace, a Frisco, Texas-based company that offers a co-loading software solution. For one thing, it spares staff members from having to sift through reams of documents to locate suitable loads and then coordinate the moves. “If you try to do co-loading manually, it’s fine for a pilot, but you can’t scale it,” he explains.

On top of that, a TMS automatically tracks any data
required for auditing purposes,
Cubitt says. As an added benefit, the appli-
cation imposes discipline on the process, ensur-
ing that all participants follow a set of standard pro-
cedures for building combined shipments, carrier selec-
tion, and scheduling deliveries.

Yet as much as the software can do to orchestrate the processes, getting a co-loading program off the ground will never be easy. “Co-shipping is very complex,” says Fabrizio Brasca, vice president of industry strategy and global transportation at the JDA Software Group. “Who’s liable? Who controls the timing of the shipment? There are a whole bunch of execution issues that have to be agreed on.” So far, it’s not clear whether shippers will decide the savings outweigh the hassles.

3PLs AND CO-LOADING

When it comes to co-loading, European companies are way ahead of their U.S. counterparts. For the past decade, companies in Europe have essentially shared supply chains, going “halfsies” on warehousing and transportation services. Consumer packaged goods companies were pushed into this practice when retailers began demanding more frequent replenishment shipments. To keep costs from skyrocketing, shippers began teaming up to make joint deliveries to shared retail customers. In the United States, however, the practice is just starting to catch on.