We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » IT: Color it green
outbound

IT: Color it green

October 23, 2017
Mitch Mac Donald
No Comments

At an event in 2012, Robert Nathan, founder of logistics services provider Load Delivered Logistics LLC, approached Jeff Silver, the head of broker Coyote Logistics LLC, to explain Nathan's idea for building one of the first mobile applications for North American brokerage. After listening to Nathan's proposal, Silver asked if Load Delivered shipped 3,000 loads a day. No, Nathan replied. Silver demurred, saying that only operations of that scale would be able to justify the investment in the type of application Nathan proposed.

Nathan killed the application and spent the next five years building procurement and digital matching software that large-scale brokers like Coyote could justify. Since that 2012 meeting with Silver, however, the goalposts have moved. Speaking in mid-October at a conference sponsored by IT provider project44, Nathan said a broker would actually have needed to flow 10,000 loads a day through its network to create sufficient ROI (return on investment) to justify the expenditure.

The anecdote ties into an issue starting to occupy more brain space in the trade: Is the pace of technology deployment racing ahead of the industry's need for it? Has technology taken the form of solutions in search of problems? Is it becoming a substitute for developing and nurturing customer relationships?

When industries overcompensate, they tend to overshoot. That may be what's going on here. For decades, the industry—with several notable exceptions—was woefully behind the IT curve. Then, almost like real estate developers who suddenly discover a run-down pocket of a city with great potential, money began pouring in to pull the business's IT capabilities into the 21st century. In many cases, the investments were long overdue and have undoubtedly been beneficial. Yet as the deluge continues, we're starting to see pushback from those who move the goods and must compete with IT for budget dollars.

"If you are building platforms for the sake of technology, you are missing the point," said Mike Rude, director of international marketing for FedEx Corp.'s FedEx Services unit. "If we can't articulate the business benefits of IT to our customers, we will all lose," he said. He advised the audience—a cross-section of IT and physical distribution folks—not to "try to be cool" and not to "try to be the next Uber."

Derek J. Leathers, president and CEO of truckload and logistics company Werner Enterprises Inc., said some IT investment has become tantamount to killing a mouse with an elephant gun. For example, Werner spent millions of dollars on sophisticated track and trace systems, but the technology has been applied to such a small part of the company's operations as to make Leathers wonder if the payback justified the investment.

"We have to say no to more data," Leathers told the crowd, adding that emphasis instead must be placed on the core of the industry's value proposition. "Spreadsheets don't move freight. Trucks do," he said.

Logistics technology is not disappearing. In fact, companies will likely pick up the IT investment pace if, for instance, it can be demonstrated that the technology can deliver superior business analytics. But perhaps we've reached a crossroads in IT attitude. Companies will not blindly follow the technology drumbeat just because a) the industry needs to play catchup, b) they haven't yet utilized it, or c) their competitors have it and they don't. Unlike, say, a venture capitalist, it's the rare practitioner who can afford to toss money at the next big thing because it has cash to burn.

Much of technology buying is rationalized by ROI. In theory, that makes sense. No one wants to invest capital in a money-losing proposition. But Todd Polen, vice president of pricing for Old Dominion Freight Line Inc., perhaps the most successful transport company over the past 10 years, may have stated the most important metric of ROI. In Old Dominion's dictionary, Polen said, "ROI is defined as 'If the customer wants it, that's where it's got to go.'"

Transportation Technology Trucking Truckload Track & Trace Systems
KEYWORDS FedEx Load Delivered Logistics Old Dominion Freight Line project44 Uber Werner Enterprises
  • Related Articles

    It may be last, but it's not really a mile at all ... yet

    if it's Thursday, it must be Tonga: interview with Major General Charles Fletcher

    YRC says it's making progress ... but is it enough?

Mitchmacdonald
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

Recent Articles by Mitch Mac Donald

20 years later, the question remains the same: Are you up to SPEED?

Hail and farewell: interview with Gail Rutkowski

Thought I’d something more to say …

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Fred Smith is not worried about Amazon

  • Outlook 2023: What’s in store for logistics/supply chain?

  • Ports, maritime operators see tide turning as ocean freight tsunami subsides

  • In Person: Steve Beverly of Penske

  • InPerson interview: Rob McKeel of Fortna

Now Playing on DCV-TV

Eeafd0c7 0569 4a63 8b31 fdbc5322c7cd

Crown’s DualMode Automated Forklifts Revolutionize the Warehouse

DCV-TV 4: Viewer Contributed
As part of the company’s ongoing digitization efforts, DHL Supply Chain has deployed Crown’s DualMode automated reach trucks to help ensure resiliency in the supply chain, with reach trucks available 24/7/365. “AGVs provide a better quality of life for our associates on the floor,” says Gordon Hanthorn, Senior...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing