Monsanto, Land O'Lakes Launch Transportation Collaboration Program

Seed suppliers see transportation cost savings by linking multiple truckload shipments into continuous move tours

Seed suppliers see transportation cost savings by linking multiple truckload shipments into continuous move tours

St. Louis — April 9, 2004 — Monsanto Company's logistics unit has launched a transportation collaboration program with Land O'Lakes, working with Logistics Management Solutions (LMS), a non-asset-based third-party logistics provider, to leverage the collective truckload activities of the two seed suppliers.

The program uses LMS' Web-native transportation management system, TOTAL, to string multiple truckload shipments of seed from both companies into efficient truck runs, or continuous move tours, reducing transportation costs by an average of 15 percent.

Launched in December 2003, the program uses TOTAL's continuous move engine to review Monsanto and Land O'Lakes seed truckload activities among the suppliers' combined set of domestic shipping points. Shipment data from both companies is downloaded into TOTAL daily and used to identify truckload movements that can be strung into continuous move tours.

According to LMS, by transforming separate shipments into multiple-leg trips, TOTAL offers more desirable, cost-effective routes for the carrier, driver, shipper and consignee. TOTAL considers multiple parameters, including rate and mileage data, as well as delivery requirements, to identify shipping configurations that will reduce costs without sacrificing service.

This collaborative initiative is designed to enhance Monsanto's existing continuous move program, which began in 2001 and has reduced Monsanto's shipping costs by an average of 15-30 percent across executed shipments. Once Monsanto exhausted its internal continuous move opportunities, it sought an external collaboration partner. Land O'Lakes, a Monsanto customer and competitor, was a good fit because the company offers identical freight and similar shipping points.

"After two years, we realized Monsanto was closing in on the high end of our projected savings potential from internal continuous moves," said Mark Baxa, U.S. packaged logistics manager for Monsanto. "Collaboration provided a gateway to additional savings and offered our carrier base increased revenue throughput. Sharing transportation capacity with customers atop a proven collaborative system enabled the desired cost savings increase while sharing an innovative practice in an otherwise traditional transportation market segment."

Under the joint program, once continuous move routes are configured, TOTAL generates a daily ship plan that is electronically communicated to Monsanto and Land O'Lakes personnel for acceptance. LMS transportation planners tender matched shipments and work with carriers to ensure continuous move routes are executed properly.

TOTAL allocates savings back to the shipment level for Monsanto and Land O'Lakes and, as a third party facilitator, LMS ensures proprietary data remains confidential. In addition, TOTAL enables authorized personnel to obtain shipment status via the Internet.

Deployed within 90 days, the Monsanto-Land O'Lakes program has increased Monsanto's continuous move shipments by more than 20 percent, according to LMS. In addition to cost savings, the initiative has enabled these seed suppliers to share logistics best practices.

"We've learned a lot from Monsanto, and this program has compelled us to further streamline our freight management processes," said Dave Bowser of Land O'Lakes' seed division. "We usually don't work with competitors on an operational basis. However, this partnership has proven to be mutually beneficial from a cost and operational standpoint."