Marketing services specialist Archway had its internal processes and services in good order. Transportation was another story ... until a third-party specialist arrived.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
When Jerry Johnson joined Archway nearly seven years ago, the company was growing fast. Its distribution centers, located in 13 metro areas throughout North America, were serving some of the nation's largest firms—Fortune 1000 and Fortune 500 corporations. And its transportation program was in trouble.
The problem lay in the back end of the transportation operation—in the billing process, to be precise. As a provider of marketing fulfillment services, Archway spends on the order of $25 million a year to ship everything from gift cards to store signage to locations throughout the continent on its corporate customers' behalf. While Archway had no trouble getting shipments out on schedule, customer billing was another story. It was taking Archway as long as nine months to get invoices out to clients. That created complications with cash flow, receivables, and working capital. And customers were none too happy.
What brought matters to a head was Johnson's discovery that not only was billing slow, but sometimes it wasn't happening at all. Clearly, something had to change.
Systems failure
Since its founding in 1952, the Rogers, Minn.-based Archway has made a name for itself in the marketing fulfillment services business. It has developed systems for delivering such diverse items as gift cards, point-of-sale materials, promotional goods, and marketing materials to company locations, retailers, auto dealers, and the like. Last year alone, Archway sent out nearly half a billion gift cards to 150,000 retail stores.
Some of the services Archway provides are extremely complex. For example, it has an arrangement with a leading fast-food restaurant chain that not only calls for it to procure print material for the client's 10-times-a-year promotions but also to distribute the material to restaurants based on a profiling system that fine-tunes shipments for each individual register, window, and drive-through location in the chain's system.
Archway's client list includes some of the best-known names in American business: Ford, Chrysler, General Motors, Lowes, Staples, American Eagle Outfitters, Colgate, Owens Corning, McGraw Hill, and others. It serves those clients from 21 distribution centers that collectively occupy more than 4 million square feet of space—and that is growing, says Johnson, who is the company's vice president of continuous improvement.
But while Archway shines in the services it provides its customers, until a few years ago, its transportation management did not measure up. The source of the problem was the system Archway was using for transportation rating and customer billing. The company had built the system internally, spending hundreds of thousands of dollars in the process. But by nearly every measure, it did not work.
"It was a complete failure," says Johnson. "And it was proving very costly."
Just how costly was revealed by an audit Johnson conducted shortly after he arrived in 2004. The audit uncovered unbilled charges going back five or six years. With limited supporting material, Archway was forced to take a significant write-off. "We could not charge for those shipments. We had no idea what they were," Johnson says. Obviously, it was time for a new system, and Johnson decided the company's best bet was to call in a transportation specialist.
Quick turnaround
Archway selected Echo Global Logistics Inc., a Chicago-based third-party transportation management specialist, to take over management of its transportation. What Echo brought to the partnership, Johnson says, was a combination of "relationships, competence, and knowledge." On top of that, he says, Echo brought top-notch negotiating capabilities. "That was a big piece," he says. "And they gave us a textbook implementation plan."
Johnson set an aggressive timeline for the project, giving Echo just 45 days to turn matters around. But he says he had full confidence in the new contractor. "We felt we could partner with them, roll up our sleeves and get things done," he says.
Johnson reports that he was particularly impressed by the way Echo employees jumped right in, meeting with Archway's staff to develop a full understanding of the operation—Archway's reporting requirements, manifesting and operating systems, and so forth. "They worked with our teams to see what we were doing," he says. To ensure a smooth handoff, Echo kept a full-time team at Archway throughout the transition, and continues to maintain an on-site team at Archway today.
Among other improvements, Echo developed a rating plan for its client's small packages. Of Archway's approximately annual $25 million transportation spend, 60 to 65 percent goes for small package shipments. The rating system, built off files from Federal Express, provides rating and routing for all small package shipments and established billing rules for clients.
The result was an immediate reduction in billing times. Where it once took as long as nine months to complete a billing process, it now happens in days. Each Sunday, FedEx uploads information on shipments through the previous Wednesday to the Echo system. "[The Echo system then] goes through rating and routing, kicks out exceptions, gives the team a day to fix those, and on Wednesday loads into the Archway system," Johnson explains. "We can track by job number and client, and show billing rules. We get two files from Echo: One goes to a financial application, the other to a billing application. They have really helped us manage our day-to-day business."
Big payoff
Johnson sees Echo as a true business partner for Archway. "We have open books," he says. "We know what each other is doing."
Furthermore, he says, Echo has steered Archway toward new business. "They have helped us come to the table with existing business clients and new clients," Johnson says. "And I am comfortable putting them in front of a client."
He cites as an example Echo's analysis of one client's spending. "Based on their knowledge and leverage in the transportation industry, they showed that they could save 30 percent on small package shipping and 35 percent on LTL based on current rates. That's on a million dollar spend. That's savings the client gets."
Johnson says the partnership has paid off in multiple ways for Archway. "The relationship has meant millions and millions of dollars, and it has helped us secure business," he says. But it's also been a two-way street, he adds. "It has helped us, and it has helped them."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.