Company's freight subsidiary to provide advance notice of shipment delays
Late deliveries can put a kink in any business' supply chain. FedEx Freight says it will soon guarantee that on the rare occasions it expects a delivery delay, the customer is kept in the loop.
The $3.2 billion-a-year subsidiary of FedEx Corp. in September will launch a service that sends out an E-mail alert of a delivery delay, with a link to a secure Web site containing the details. Previously, customers had to check themselves where a shipment was in its delivery route.
Core to the new service, called FedEx Freight Advance Notice, is custom code the subsidiary's IT department added to an existing application, enabling the app to match shipment-status information with route-planning data. That allows FedEx to let customers know when route changes, such as a work-around to a highway closure, affect deliveries. FedEx Freight has updated the handheld devices its drivers carry and computers stationed at its loading docks to support the service.
Freight Advance Notice will let business customers adapt their supply-chain processes to the expected delay and take steps to avoid associated costs, FedEx Freight CIO David Zanca says. For instance, a company that planned to have 200 dockworkers ready to process a delivery of inventory can reallocate them, rather than have them waiting for a shipment that's delayed.
FedEx Freight's customers typically use the subsidiary to provide just-in-time deliveries that let them keep inventory at a minimum. "Since we're enabling everyone to optimize the supply chain, it's important to let them know when there's a problem," Zanca says. "The customer wants to know when a shipment's going to arrive. If it's not going to arrive on time, they especially want to know so they can notify their workforce and their customers."
The new FedEx service lets companies reallocate resources, such as dockworkers, when shipments are late.
The service will be free to FedEx Freight customers who register for a "my account" view on the company's secure Web site. It will be available only for domestic freight shipments initially, but Zanca says FedEx is considering extending it to FedEx Express and FedEx Ground units. FedEx Freight moves about 67,000 shipments weighing 76 million pounds each day and about 99% of those shipments arrive on time, Zanca says.
FedEx appears to be playing catch-up with competitor UPS Inc. That company's supply-chain unit has offered a similar service called Flex Global View since late 2003, letting its freight customers set up custom alerts that notify them of potential shipment problems so they can adapt their supply-chain processes. A newer service launched in July, Quantum View Inbound, provides similar alerts to customers shipping small packages.
FedEx's service provides more information than its competitor's by matching the shipment-route-planning data with the shipment-status data, Zanca says. And unlike FedEx Freight, UPS uses some third-party carriers for shipments. Because of its use of partners, UPS may not be able to control its information as well as FedEx Freight, which could result in less-accurate alerts, Zanca says.
Business customers are increasingly demanding more information about deliveries to optimize their supply chains. The problem, says Adrian Gonzalez, director of the logistics executive council for ARC Advisory Group, is that many struggle to make good use of the information. "They [get] these alerts," he says, "but being able to interpret what they mean and take some action--and preferably some automated action--is a bigger challenge."
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