Ti spoke with Sixfold’s Executive Director, Jesper Bennike, about Sixfold’s evolution and the increasing importance of real-time visibility.
JB: Both Sixfold and Transporeon see more value being generated when real-time visibility meets actual execution. When you have visibility as a standalone solution, you can get insights into all your in-transit freight. But you can unlock the real value from visibility services only when you use those learnings and insights to do better planning and execution of your current and future freight.
From a Transporeon standpoint, the move served to provide visibility enabled transport. The integration of Sixfold equips Transporeon’s entire suite of services with real time insights, thereby enabling the Transporeon platform to be much more prescriptive.
Ti: Creating a large network of carriers is essential for your business model. How do you build up your network and enable smooth and efficient onboarding of carriers within your ecosystem?
JB: This is a challenge that has to be solved. European capacity is spread out between large carriers but a great part of the capacity in Europe is owned by small to mid-sized trucking companies. For all carriers, the goal is to make the onboarding process as frictionless as possible for the carriers.
Equally important to building up a network is to make sure asset allocation also happens in large numbers, or in other words, that the carriers in our network are receiving shipments, allocating their assets and assigning trucks within the same platform.
This process can become difficult or disjointed when working across different standalone systems. For instance, as the carrier gets a shipment from a shipper, they might need to log into a standalone visibility platform, or use the shippers’ TMS systems to link the truck to the shipment. This in turn creates changes and challenges in the workflow of the carriers.
Our collaboration with Transporeon in this context is beneficial to the carriers as they get their shipments through the Transporeon platform which makes the asset allocation process simple and completely frictionless.
Ti: Does reluctance among carriers to open up their data remain an obstacle to achieving true real-time visibility? What does Sixfold do to overcome this obstacle?
JB: Five years ago, when visibility became established as a software category, this issue was more pronounced. But I think in general, carriers are starting to see the value created for them through visibility and are consequently becoming more open and willing to share their data.
Carriers could have reason to be concerned about data sharing if the process was handled incorrectly, as this could end up exposing their underlying subcontracted carrier network for example, and undermine their competitiveness. That’s why it’s critical to structure the data correctly and act as a trusted steward of the carrier’s data, with regards to opening and closing the data and the method of data distribution. But, overall, data sharing is not as big a problem as it used to be. As mentioned, one of the reasons for this is because carriers are getting educated more and starting to understand the value they get from it. Having been in the market for many years building trust with our carrier partners, Sixfold in particular benefits from this shift.
At Sixfold we are currently expanding our services aimed at small to midsize carriers in order to enable them to gain even more value from visibility. What the carriers get in terms of value is being able to provide a single point of truth to their clients with regards to delivery times, better documentation for dwell times and other related pieces of information. But especially in the current situation where we have a capacity crunch, these carriers still might not see the full value of visibility. In direct response to that, we’re also expanding our set of tools for these smaller carriers. Typical asset owners across Europe (and indeed globally) often have low digitization and may still be running their entire operations on Excel sheets. So, it’s not always a question about if the carriers “want” to share data, but instead whether they have the technical tools to do so. With those tools, the asset owners see the real value in visibility when they share their shipment level tracking data with external parties.
Again, it’s also important to highlight that there are different categories of carriers, and they view data sharing differently. Most of the smaller carriers don’t really have as many concerns with regards to data sharing as they deal with digital maturity challenges.
Ti: What customer groups are you targeting and where do you see demand coming from?
JB: Demand is coming from different players in the market, such as shippers, carriers, and traditional & digital forwarders. Forwarders in particular are becoming an important customer group as they see a big and quick return on investment because the number of check calls is vastly reduced when using our services. But a great part of growth and demand is still driven by the large retailer and FMCG clients pushing out global visibility services across all modes of transportation.
Ti: Sixfold launched the Covid-19 border crossing map in March 2020. What does the underlying data powering the border crossing map tell us about the current state of the market?
JB: These border maps clearly demonstrated how inefficient the market is and how much time is wasted on the roads. And the more time is wasted, the lower the asset utilisation and the higher the cost of the shipments. Regardless of whether we’re talking about waiting times on border crossings or dwell times at a certain delivery, they all have the same effect. The data shows that both carriers and shippers need to get on board and collaborate with one another because there are a lot of optimization areas, and it is in everybody’s interest to reduce the inefficiencies in the industry. This asset utilization inefficiency ripples down to have not only a financial impact but also a significant impact on the physical environment as well as an ecological impact.
Ti: What level of priority do shippers assign nowadays to having carriers that provide visibility over transportation movements? Is it seen as a nice to have feature or a must have?
JB: There’s no easy answer to that. More advanced shippers are definitely pushing in the mandatory direction. And even when there are capacity constraints and it’s difficult to find carriers to move the loads, it is equally important for shippers to obtain visibility over their shipments, as it helps to identify inefficiencies in the supply chain, which again improve asset utilization. So despite us being in a capacity crisis, we see shippers and forwarders pushing visibility as mandatory as they embrace technology to solve the current capacity challenges.
Ti: One of the key value propositions of visibility platforms for carriers is improved capacity utilization. When it comes to this, the RFT is highly inefficient, with the rates of empty runs hovering around 15% for international transport. These numbers haven’t changed at all in the past 10 years. With many different types of technology available on the market, such as routing and scheduling software, empty running at this rate seems higher than it needs to be. Why isn’t there a significant improvement in vehicle utilisation?
JB: I believe it’s still a little too soon. I think at least 80- 90% of all shipments across a market need to be tracked before you can start seeing efficiency improvement.
With regards to efficiency improvements and return on investments, going through the value creation chain on having visibility, there are low-hanging fruits. For example, we have clients that are in the ramping process, and may only have 30% of all shipments tracked. But they still see value from it, because they can see the number of check calls going down, and they have OTIF documentation. But in order to start remapping your own network, you need to have much higher levels of visibility.
So right now, the benefit of real-time visibility for many players is more around achieving internal efficiencies (e.g. reduction in the number of check calls) and improving external customer service. We have large customers very actively using RTV in their customer service. With check calls, it normally took half a day to collect a status update from a carrier, and now they have real-time status information shared directly with their clients through our platform. Only when a higher proportion of shipments get real-time tracked can we expect asset utilisation rates to go up.
Ti: Moving forward do you expect consolidation in the European visibility platform market to achieve more scale and develop a critical mass of users? Do you expect increased levels of collaboration between the different types of digital platforms?
JB: In terms of collaboration, we have experienced a certain unwillingness from visibility providers to collaborate with their peers in the visibility market. A lack of data standardization has served to slow down or in some cases completely block the flow of information between competing providers. So, getting data to flow horizontally between competing parties has traditionally been a challenge for the industry.
At Sixfold we have therefore recently announced a data-sharing initiative, Open Visibility Data. OVD API removes these obstacles by enabling carriers and LSPs to share their visibility data with shippers– no matter which TMS or visibility provider the shipper uses. The API gives authorized stakeholders simple access to key visibility data via individual API keys, thereby separating access for each customer. This puts the power back in the hands of carriers, giving them complete control to grant their shippers access to real-time transport information and updates. We’re hoping that this move is going to encourage different players to work together. The industry needs this type of collaboration and openness because that’s the only way we can provide full visibility across the industry.
On the consolidation side, we’re seeing visibility providers adding more functionalities through acquisitions. I wouldn’t exclude the possibility of large TMS providers acquiring visibility providers in order to provide in-house visibility and build their own networks. In general, though it’s hard to predict what will happen in the market, it is clear that supply chain technology remains one of the hottest investment areas, and the current global situation has only emphasized this fact.
Ti: What are Sixfold plans for the near future?
JB: The simple answer is that we want to build the world’s biggest network of high-fidelity data across all modes and regions. Taking it from vision level to more near-future objectives, we want to build new services for the carriers to improve the balance of service offerings on both sides of the Transporeon platform. As an example, a lot of carriers that are just data providers are not getting enough services in return from the Transporeon platform. We’re therefore working to provide more services for these companies that own a fleet of around 20-30 trucks. As mentioned earlier, these carriers often don’t have TMS systems and run their operations on Excel sheets. Generating value for this group of carriers takes up a large part of our attention, and we want to offer them a consolidated web-based go-to service in a single space to run their business.
This large segment of the market is following a much slower pace of digital adoption than in other industries, at great risk to all other players in the market. This is why both Transporeon and Sixfold are committed to supporting smaller carriers with pragmatic digitalization services.
Besides these carrier services, we are of course always working on extending the size and coverage of our network, both with regards to mode of transportation coverage, as well as new geographical expansion.
Source: Transport Intelligence, October 7, 2021
Author: Violeta Keckarovska
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GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)