Managed Technology Service Launched for Ocean Freight Procurement

GT Nexus offers "on-demand" solution to help companies purchase, optimize and manage ocean transportation services

GT Nexus offers "on-demand" solution to help companies purchase, optimize and manage ocean transportation services

Alameda, CA — January 13, 2005 — GT Nexus, a provider of "on-demand" software for global logistics and supply chain management, has rolled out a new managed technology services program to help importers and exporters strategically purchase, optimize and manage global ocean transportation services.

In today's fast-paced global economy, logistics professionals are consumed with day-to-day operating challenges to keep their supply chains flowing, observed John Urban, GT Nexus president. "The annual bid process burdens them with a difficult, labor-intensive management task," said Urban. "They need technology tools and expertise. It's a complex effort that if delayed or ineffectively managed, can saddle a company with excessive global transportation costs and insufficient service contracts."

Ocean transportation contracts typically are negotiated during the early months of the new year, ahead of the peak shipping season, Urban noted. This year in particular, ship lines are expecting record volumes, capacity is tight and rates are on the upswing. Global businesses are under pressure to secure agreements that give them adequate capacity at reasonable cost. GT Nexus believes that on-demand technology, combined with global freight expertise, can help companies meet the deadline without compromising service needs or budgets.

GT Nexus' program includes access to Web-based technology for global transportation procurement, optimization and contract management, as well as a dedicated GT Nexus specialist to run the system. It is designed for importers or exporters with 5,000 or more full-container shipments annually (spending $10 million or more on ocean freight) and who contract with as few as five to as many as fifty ocean carriers.

Under the program, the GT Nexus specialist becomes an extension of the shipper's logistics team. Utilizing purpose-designed software, workflow and data management tools, the process of bidding, evaluating, negotiating and securing ocean service contracts, which can run to tens of thousands of line items, is conducted in a controlled, standardized online environment.

Optimization software allows the shipper to do scenario planning, consider trade-offs between price and service, apply customer-specific business rules and evaluate other performance factors that impact overall global transportation costs. Output from the system includes an allocation plan that is optimized for the shipper's network of carriers, as well as final, digitized contracts (downloadable to Excel). The allocation plan outlines the projected best combination of price, service level and capacity needed from each ocean carrier to optimally support the customer's global supply chain operations.

Customers using the GT Nexus system typically can conclude the procurement cycle with multiple ship lines and take contracts live within four to eight weeks of initial bid tender, depending on the number of participating carriers, according to the solution provider.

Once the bid process is completed, the shipper has the option of using the GT Nexus system as its platform for ongoing digitized contract management and performance tracking and measurement of their ocean carriers.

As a managed technology service delivered over the Web, the customer does not have to buy or install any hardware or software. Customers pay a monthly subscription fee for use of the service.

"With traditional software packages, the internal distractions of managing installation and implementation, of process change, and of learning new technology can take months to work out," said Urban. "With this on-demand program, the customer can start tomorrow. We give them the keys to a proven, in-production ocean procurement and optimization solution. And we throw in the driver, too."

Companies using GT Nexus global transportation management products today include The Home Depot, Dupont and Hewlett-Packard.

For more information on the latest trends in the logistics space, see the article "The Analyst Corner: Fulfillment & Logistics" in the October/November 2004 issue of Supply & Demand Chain Executive.
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