When a shipper decides they need to significantly lower their freight spend while maintaining or improving on time deliveries, there are two main paths forward. They can implement a transportation management system (TMS). Or the shipper outsource transportation planning and execution to a 3PL; This is a managed transportation services (MTS) engagement.
A 3PL white label strategy involves buying software solutions – like TMS – from leading providers, but then giving this solution their own branded name, leaving the implication that they developed the solution themselves. A TMS is a critical application if a 3PL wants to provide robust managed transportation services. Here are some examples of 3PLs providing managed transportation services, what they call their technology, and the true supplier of that solution.
|3PL||White Label Name||TMS Provider|
|CLX Logistics||Managed Services||On the managed services page, they don’t mention the TMS. But analysis of the site as a whole makes it clear their solution is Kewill Transport|
|DB Schenker||SDS Control Tower Services||Some client solutions are based upon Oracle Transportation Management (OTM)|
|DHL/Exel||Transportation management solutions;||Standardized on Oracle OTM. Exel mentions that they use a leading TMS, but not who it is. DHL does not mention this.|
|Ewals Cargo Care/e-Logistics Control||Cross Chain Control Center (4C)||ORTEC LoadDesigner and Quintiq to provide transportation management capabilities.|
|Fedex/Genco||Genco Managed Transportation||They mention they use a leading TMS, but not who. They use MercuryGate’s TMS and Manhattan Transportation Procurement.|
|Geodis||Geodis Flow Management||Oracle OTM plus Descartes WinRoute if routing is needed.|
|Menlo Logistics/ Con-way||Menlo Transportation Services||Oracle OTM|
|OHL||Transportation Management||Mention that they use a “state of the art web-based TMS” but not who it is. It is MercuryGate.|
|Penske Logistics||Penske Transportation Management||A mix of OTM, JDA TMS, and proprietary solutions|
|Ryder||Transportation Management||Their primary TMS is JDA TMS|
|Schneider Logistics||Transportation Management||Oracle OTM|
My perspective is that a 3PL can’t possibly internally develop and continue to enhance a TMS solution that will be as robust as the best solutions on the market.
There are exceptions. LeanLogistics, Transplace, and C.H. Robinson TMC all provide both managed transportation services and off the shelf TMS. They are all willing to sell and implement their TMS for customers that would prefer TMS to managed services. Their ability to continue to sell their TMS solutions in a competitive software market is evidence they have developed a mature solution and are continuing to enhance that solution.
A word of warning. The table above is based primarily on the supplier profiles from the last MTS market study that ARC completed at the beginning of last year. We are updating that work again, and will have more updated data on 3PL/TMS relationships when the study is complete.
In conclusion, I believe 3PLs are making a marketing mistake when they white label the software solution used to provide managed services. Logistics executives are increasingly knowledgeable about who the leading TMS suppliers are; in fact, they are usually more familiar with TMS than with MTS. In most cases, it will be a comfort to potential customers to know their 3PL is using a robust off the shelf solution that is not going away.