Under RIL's umbrella are the company's Web-based transportation and distribution management services. This is the fastest-growing part of the business, to the tune of nearly $2 billion globally. Orr says, One of the things that our clients look to us to do is bring them emerging technology in a cost-effective manner. For example, i2 Technologies, a powerhouse supply chain solutions provider, is the matrix in FreightMatrix, an online marketplace for transportation services in which Ryder is an anchor tenant. But most small- to medium-size companies don't have the resources to implement i2's platform and instead hire in-house IT expertise to develop and manage complex, proprietary systems or shoulder the financial burden when something doesn't work.
Lounsbury believes there's more to it than avoiding technology's cost and complexity. Companies need to move to variable costs. [For example], flex the size of warehouses and fleets in order to balance warehouse utilization. When it was cheaper and more expeditious, keeping business functions in-house made sense. But the outsource service provider's marginal cost of extending a Web-enabled process to each additional new user is so low that it's becoming more cost-effective and just as quick to farm out what isn't core to the business. The result is less capital tied up in fixed assets and more to spend on things that make money.
A Real-time, Back-end View
Bells must ring in Heaven when Ryder's target customers ship anything, because their industries are struggling with the worst of the inventory backlog electronics, high-tech, telecommunications, automotive, aerospace and consumer packaged goods. The big picture solution is complex, but tackling the inefficiencies in the transportation and distribution of these goods is the right place to start. According to Lounsbury the typical truck is 60 to 70 percent full. Ryder can improve cube utilization by matching loads with proprietary customers. It's not new in terms of concept. There are brokers, and truckers can post [information] on bulletin boards at truck stops. The difference today is that everything is in real-time.
That is, if the technology that provides this real-time view actually works. It's worth looking into the backgrounds of a service provider's technology partners. They should be reliable, financially stable and in business for the long haul, to the extent it's possible to know such things. Nonetheless, a little research will reveal what people are saying about them. Ryder has cherry-picked some of the best. In addition to IBM Global Services, Accenture, i2 Technologies (FreightMatrix) and Viewlocity (AmTrix), Ryder is also working with From2 Global Solutions (international logistics technology), Qualcomm (wireless and OmniTRACS onboard computers), Provia (DC management), P3 Systems (pFreight), Descartes Global Logistics Network (fulfillment) and LogicTools (decision support).
These tech providers have helped Ryder develop its own back-end systems or, in other words, the services that form the backbone of the following logistics offerings:
- pFreight provides drivers, small-fleet owners and private fleets with a range of services: load matching, filing of all tax and regulatory reports required by government agencies, standardized contract administration, carrier ratings, universal track and trace, on-line paperwork, electronic billing/payment and elimination of administrative duties. The Web site is standardized to accommodate any size carrier.
- FreightMatrix an online marketplace for logistics providers, including carriers, freight forwarders and customs brokers. Participants benefit from Ryder's volume purchasing of contract transportation and gain access to additional business through i2's TradeMatrix marketplace network.
- ECredit.com automates and speeds credit and application approval and collections management for commercial leasing and programmed maintenance application pricing through Ryder's Global Financing Network.
- RyderFleetProducts.com provides online access to the country's largest supplier of truck parts, with 150 product lines and 15,000 catalog items from more than 100 suppliers.