Record Transportation Bid Activity Seen on Global Logistics Portal

GT Nexus reports more than $3 billion in transportation services contracted with carriers through its portal for 2006 ocean transportation bid season

GT Nexus reports more than $3 billion in transportation services contracted with carriers through its portal for 2006 ocean transportation bid season

Alameda, CA — July 20, 2006 — On-demand global logistics portal GT Nexus reported this week that it had experienced record activity levels for the just-completed 2006 ocean transportation bid season, with more than $3 billion in transportation services contracted with carriers through its portal.

The bidding and contracting capabilities on the portal are the industry's most widely used system for shippers to negotiate, execute and manage their spend with global transportation carriers via the Web, according to GT Nexus.

For the 2006 bid season, which occurs each spring, GT Nexus saw more than 2.6 million twenty-foot equivalent units (TEUs) procured and managed over the portal, more than $3.5 billion in transportation services contracted with carriers, and participation by ocean carriers that together control more than 90 percent of global TEU capacity

"These numbers are up 150 percent from 2005 and represent over 20 percent of all container volume moving in and out of North America," said GT Nexus President John Urban. "This demonstrates two things: First, the concept of going online to handle a multi-million dollar, strategic transportation spend has become common for big shippers. And second, GT Nexus has become the industry standard and market leader for global transportation management."

Online Upswing

"Ten years ago people were having trouble with the concept of making an airline reservation online," said Ann Grackin, CEO of ChainLink Research, a supply chain research firm based in Cambridge, Mass. "Now we are seeing the biggest companies in the world going online and collectively spending over $3 billion on a critical component of their global supply chains through a single, industry-backed portal. I think this provides a preview on how supply chains will be managed in the future — online."

Major shippers such as DuPont, Hewlett Packard, The Home Depot and Procter & Gamble have been using the GT Nexus portal's global transportation management capabilities for several years, pioneering a whole new direction for the industry. GT Nexus said that as new customers adopt the portal to conduct their bids, they often find that many or most of their carriers are already familiar with the GT Nexus system.

Addressing Traditional Challenges

Historically, the big challenge of conducting a bid is the lack of standardization across carrier proposals. Ocean transportation contracts are massive, complex documents that often list the service terms and commitments between the shipper and each of its carriers in different formats. GT Nexus said it helps untangle that complexity by providing a single, unified contract structure. That means all bid participants follow the same procedures to request, propose, counter, negotiate, accept and then award transportation agreements.

Once the structured rates and service levels are captured, shippers have an "online data hub" which sets the foundation for other, more sophisticated portal capabilities, including strategic optimization to allocate cargo across all carriers at the ideal service price mix, contract management that allows customers and carriers to actively manage the agreements as the services are delivered, and execution of services with integrated carriers, directly from online contracts.

The portal provides freight audit tools that automatically compare the contracted pricing with rated bills as they come in, as well as tools for the analysis of provider performance to identify strengths and weaknesses. Customers also have the option to use other premium GT Nexus services, such as multi-modal inventory visibility, trade document automation and real-time landed cost updates.


Additional Articles of Interest

— Supply chain executives are facing a skills gap that could hinder their companies' ability to compete in an increasingly fast-moving global economy. Here's what Supply & Demand Chain Executive is doing about it. Read "Warning Signs," the Executive Memo column in the June/July 2006 issue of Supply & Demand Chain Executive.

— Read about one high-tech manufacturer's quest to deliver near-perfect fill rates across its global service organization in "Managing a Global Supply Chain in a 'Flat' World," from the June/July 2006 issue of Supply & Demand Chain Executive.


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