The re-re-making of a rate bureau
SMC3 is no stranger to the pivot. In the years following trucking deregulation in 1980, the old Southern Motor Carriers Rate Conference realized that its reason for being—to collect tariff data that facilitated collective ratemaking in the less-than-truckload (LTL) industry—would eventually disappear. In the late 1980s, it changed its name to SMC3 and began leveraging its data trove to deliver real-time pricing solutions to the free market. SMC3 had long since moved on by the time Congress in 2007 stripped rate bureaus of the antitrust immunity they needed to function. Of 10 major bureaus that were part of LTL for more than 70 years, Peachtree City, Ga.-based SMC3 is the only one left standing. And it has prospered.
Now it faces a new challenge, one that may be more rooted in perception than anything else. A cadre of young aggressive techies is pushing an alternative communication solution to the traditional electronic data interchange (EDI) platform used by SMC3 and others. The tool, the application programming interface, or API, allows the software systems of motor carriers and users to communicate directly with each other without data being routed through a third-party interface like EDI.
The most visible of API's "Young Turks," Chicago-based project44, has been spreading its name, and value proposition, all over LTL. Project44 regards SMC3—publicly and privately—as a formidable organization. At the same time, it is subtly maneuvering market mindshare into an "Apple vs. Microsoft" groupthink, where the aging titan (Softee) doesn't have the latest tech answers for the new kid (Mac).
If SMC3 is worried about being perceived as "old and in the way," it doesn't show it. It plans to roll out by year's end its own suite of transactional APIs to follow the new type of "carrier-direct" data-delivery solutions being pushed by project44. SMC3 won't re-invent the transactional API wheel, said Andrew C. Slusher, the group's president and CEO, but it will put its spoke on it. "We're not first, but we will be a fast follower," Slusher told us in a June interview.
APIs are not new. SMC3 said the function is already embedded in two of its products—"RateWare XL" and "Carrier Connect XL"—that deliver responses to user queries in milliseconds, rather than the 3- to 20-second response times per query for the "carrier-direct" solutions. But not everyone needs faster-than-split-second time windows, SMC3 says. While it may work for users needing to process large volumes of data at blazing speeds, for others it would be overkill, it argues.
The annual LTL revenue stream that supports transactional APIs is about $5 billion, not immaterial but still a small piece of the total LTL market of $37 billion or so, Slusher says. Transactional APIs could have market-moving value if carriers were to frequently change their lane schedules, Slusher notes. But they don't, he adds.
EDI's influence may gradually lessen over time, but the technology is not going away any time soon, Slusher says. EDI is well established in the marketplace, and it works well for many companies, he adds.
For all of the technology being deployed, it is the human element—in this case, Slusher—that is SMC3's ace in the hole. Slusher spent 13 years with LTL carrier YRC Worldwide, seven years with American Airlines in pricing and revenue management, and five years with airline computer reservations giant Sabre Corp. Given his career mix of transport and technology experience, it is hard to imagine anyone with a better pedigree for the job.
What's more, Slusher is just 51, old enough to have gained the wisdom that comes with experience, but young enough to think with, and like, the newbies. In a competitive climate that Slusher admits has gotten tougher, that may be the most important quality of all.
