For many companies, international transportation management has long been an isolated process — where products are shipped to, or received from, far-flung places overseas.
Each successful transportation manager has his or her ways of ensuring the most efficient movement for their company’s freight across the globe through a blend of know-how, mostly rudimentary information technology and tried-and-true carrier and third-party logistics provider relationships. Meanwhile — perhaps somewhere down the hallway or even in the next cubicle — those managers responsible for arranging the specifics related to the transaction for the goods themselves operate in another world.
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However, advanced IT is breaking down the walls that once insolated the international department from the rest of a company’s functions, and nowhere is this more evident than for current and future users of GT Nexus’ visibility and logistics spend management tools. GT Nexus has recently announced a merger with TradeCard’s order-to-cash and procure-to-pay solutions.
The combination of GT Nexus and TradeCard, although just a single example, could mark the beginning of a shift towards an integrated, electronic platform linking the supply chain from purchase order issuance through settlement for the goods including the transportation management components along the way. In a very real way, a joined GT Nexus-TradeCard offering could bring the shipper-carrier and buyer of goods-seller of goods relationship under the same roof.
Let’s keep this in perspective. For years, logistics experts have been eyeing integrations, such as this one, with the eventual output being a more seamless supply chain. But very few companies can actually do this today. American Shipper’s research shows time and again that although companies strive to manage their transportation processes using a single system or platform, very few have actually accomplished this goal. Different functions and processes are often managed autonomously with varying levels of sophistication. Lots of work remains to close the “transportation loop.” Expanding the scope of this challenge to include the buyer-seller relationship raises the degree of difficulty significantly.
However, there are many benefits to integrating transportation functions with other processes. Perhaps most notably the combination of these two IT firms could allow shippers to limit their dependence on letters of credit. While the letter of credit remains a staple of global trade, many have come to see these instruments as antiquated requirements left over from the earliest days of globalization. Other benefits would include increased quality of supply chain data, visibility, transportation cost savings and other efficiencies.
A shift like this would have a significant impact on the role of the international transportation manager. To be successful in the future, these professionals need to understand the bigger picture including functions such as procurement, merchandising, sales and finance. Transportation skills alone just won’t cut it any longer as they will have more on their plates than just transportation.
