Subscribe to our free, weekly email newsletter!


Logistics Technology: GTM seeks higher ground

With freight costs rising, capacity constraints looming, and the complexities of global trade on the rise, our top analysts concur that global trade management (GTM) software will continue its slow-but-steady infiltration into today’s vernacular—that is if shippers can justify the ROI.
By Bridget McCrea, Contributing Editor
February 01, 2012

As global trade numbers continue to grow, the complexities that go along with its expansion are also on the rise. Inefficient shipping routes, changeable rates and hidden surcharges, capacity constraints, size and weight factors, along with safety and security issues are just a few of the key challenges that shippers are dealing with right now according to a recent research study from Peerless Research Group (PRG) on behalf of Amber Road (formerly Management Dynamics).

The research study, titled Current Trends and the Potential for Automation in International Transportation Management, highlights an international freight shipping environment that’s plagued by challenges that potentially expose shippers to “risky and costly misfortunes.” To circumvent these challenges, some domestic firms are turning to global trade management (GTM) solutions that help them better understand, negotiate, and adhere to contract provisions.

According to the report authors, “better informed decision-making on freight route planning, carrier selection, shipping scheduling and costing, load planning, guidelines compliance and auditing, invoicing, and reporting results in greater logistics operational efficiencies and yields significant cost savings.”

But while GTM’s value in the supply chain has been proven over the last few years, these solutions have yet to gain widespread traction among the vast majority of shippers. In fact, the report found that just one out of four shippers currently uses automated applications for calculating rates and for selecting routes and carriers. Surprisingly, freight auditing, invoicing, logistics execution, and contract management functions are also still largely manual functions.

One of the reasons shippers may not be warming up to GTM is the fact that it can be difficult to associate the solution with a return on investment (ROI). “GTM isn’t an ROI play in the sense that most supply chain software is,” says Steve Banker, service director for supply chain management at the ARC Advisory Group.

Rather, GTM is more about compliance and about not breaking the laws set forth by governments. “You could argue that GTM can save money on potential fines, but that’s not a very strong argument,” says Banker. “That makes GTM a harder sell than applications that truly do have a strong ROI.”

Over thee next few pages we’ll look more closely at current GTM adoption rates, discuss the solutions’ value in the global supply chain, and put the spotlight on how global shippers are benefitting from their GTM implementations.

About the Author

image
Bridget McCrea
Contributing Editor

Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996, and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA