Supplier Relationship Management Functionality Comes to TMS

I was invited to the MercuryGate user conference this year. MercuryGate is a SaaS provider of transportation management systems (and a Logistics Viewpoints sponsor). What most struck me was an application the company calls Carma (Carrier Management). Carma has been out for a few years, but I had never done a deep dive on it. This, I believe, is differentiated functionality; I’m not aware of any other transportation management system (TMS) with similar functionality.

TMS solutions have been getting broader and deeper for years. But Carma strikes me as a Supplier Relationship Management (SRM) solution for the transportation function, with carriers being analogous to the suppliers SRM solutions focus on. In ERP, procurement solutions broadened out to include SRM capabilities. Here is how Wikipedia defines SRM: “The systematic, enterprise-wide assessment of suppliers’ assets and capabilities with respect to overall business strategy, determination of what activities to engage in with different suppliers, and planning and execution of all interactions with suppliers, in a coordinated fashion across the relationship life cycle, to maximize the value realized through those interactions.” Within TMS, with Carma, we are seeing the same progression.

Carma is a tool for carrier qualification, monitoring, reporting and, ultimately, risk mitigation. If a shipper, broker, or non-asset based Logistics Service Provider (LSP) uses unqualified, unsafe carriers, they can be liable if the carrier causes an accident under a legal doctrine known as “Vicarious Liability.”

Carma is a tool that enforces a carrier qualification processes. The way the process typically works is that when a load planner needs to find a carrier for an uncovered lane, or when incumbent carriers do not accept a load, the planner goes into the system to see if the carrier he wants to use is approved. If the carrier is not approved, there may be a note explaining why this is, for example, insufficient insurance.

If the carrier is not in the system, the planner requests permission to use a new carrier. Carma speeds up the process of getting a carrier approved. Carma then generates a carrier packet and automates communication with the carrier. Because Carma is integrated with TransCore’s CarrierWatch and other third party carrier information providers (RMIS, Carrier 411), much of the required information can be automatically populated. Information like whether the Federal Motor Carrier Safety Administration (FMSCA) has certified the carrier, how much insurance the carrier has and when it is expiring, and FMSCA safety scores can flow into the carrier packet. If a carrier is denied approval, reason codes explain why.

For existing carriers, the system knows when key events occur, for example, a carrier’s insurance will expire in ten days, and alerts the carrier management team to the event as well as automatically emailing the carrier every night until the new information is received.

The data fields, and rules for what constitutes a qualified carrier, are customizable. Shanon Hart, a VP at MercuryGate who is the product manager for Carma, told me that some of their customers have chosen not to use the BASIC scores because they think it may actually increase their liability in the event of an accident.

There are different levels of carrier qualification approvals that are possible. For example, a shipper’s carrier may be qualified for most loads; however, there may be loads with certain characteristics (like HazMat) for which they are not qualified. Or if it is a 3PL, Carma can respect the different carrier qualification rules that different shipper customers may have in place.

Once a carrier responds and is qualified, Carma then helps to enforce the use of qualified carriers and provides an audit trail. So if a planner tenders to a non-approved carrier, the system can tell you which planner did this. If carrier data is changed in the system, an audit trail tells you who made the change and when it was made.

The carrier qualification process is a form of risk mitigation that every company that ships freight should do, but of course not everyone does. Most companies that do engage in this process use spreadsheets or Access databases. The disadvantage of this manual process is that it is slow, cumbersome, and lacks proper enforcement.

This solution is clearly a step forward for TMS. Shanon tells me that MercuryGate’s new clients clearly see the value, and almost all of their new TMS customers choose to implement Carma.