A few weeks ago, I spoke with Kim Harper-Gage, Senior Vice President, Operations and Supply Chain at Iconex. Iconex is the world’s largest maker of paper receipt rolls for the retail, banking, and restaurant industry. Additionally, the company makes custom labels for various industries such as logistics and retail. Iconex is a global company with operations in North America, Chile, and Europe. The basis of my conversation with Harper-Gage was about their relationship with managed transportation services provider GlobalTranz. GlobalTranz is a full-service transportation and logistics provider, offering managed transportation services, project logistics, and supply chain solutions.
The relationship with GlobalTranz began as Iconex acquired two companies at the end of 2017. Iconex realized that with three different companies bringing their freight spend and transportation needs under one umbrella, they were undertaking a huge project. Prior to the acquisition, the three companies were managing their freight spend and transportation differently. One company was using a TMS to manage transportation, and the other two were on a basic freight and logistics structure working with companies via individual contracts with truckload and less-than-truckload suppliers. The three companies also had three different freight payment systems.
At the end of the third quarter 2018, Iconex put out an RFP looking at six different 3PLs. In the end, the company selected GlobalTranz as it had the scale Iconex was looking for as well as a long-term plan for managing its business profile. Namely, Iconex could add on more locations, and GlobalTranz provided a realistic and stretch ROI.
Iconex has a total freight spend of a little more than $10 million; the majority of this is in North America, with GlobalTranz managing truckload and less-than truckload shipments. While international shipments have not been added on yet, it is in the long-term plan of the relationship. One area of interest for me is what system 3PLs use to manage transportation and freight payments. I asked Harper-Gage whether Iconex identified a TMS that it wanted GlobalTranz to use or whether GlobalTranz went with its preferred solution. GlobalTranz proposed their system as the best option for managing transportation. As part of the kick-off, this was one of the things Iconex was looking for. GlobalTranz toured multiple facilities, getting to know the site, people, and the business. The proposal came with GlobalTranz’s recommendation for a TMS.
The most important aspect of a 3PL relationship is the business benefits of working together. I asked Harper-Gage about the benefits of working with GlobalTranz. In the five months they worked together, Iconex has started seeing the savings the two companies mutually agreed they would see – the company is hitting the run rate they agreed upon. Iconex started with truckload and added less-than-truckload. GlobalTranz has provided a roadmap on how to get savings, extensive reports that show savings and KPIs; and, using their tools, is building the confidence that they will deliver the savings they promised and could hit upside as well.
Harper-Gage pointed out that the trucking industry has a lot of variability happening; capacity and regulatory changes, for example, have led to price increases. The relationship with GloablTranz has provided a good stable base of supply for them. For example, if someone drops a truck in a region, they can re-route to make sure supply gets delivered. GlobalTranz manages the tactics around all the changing issues in the industry for Iconex.
So how has GlobalTranz lowered transportation costs? Harper-Gage identified their current state as phase one savings impact. The biggest impact has been a cheaper cost per lane due to negotiations and their relationships for truckload and less-than-truckload. Additionally, prior to the relationship, Iconex was using two or three freight payments systems; now a centralized, simplified process has reduced fees and internal complexities. Iconex is hoping to launch international shipments with GlobalTranz in the Q2 timeframe. To date, Iconex has seen 8 percent savings so far.
The benefits go beyond simply saving money on transportation costs. Communication is a key factor. Harper-Gage pointed out that the two companies have weekly meetings since the implementation. Also, GlobalTranz has been quick to respond to other inquiries. For example, Iconex ran into some unique times where they needed warehouse space. GlobalTranz has been helpful in finding the right location at the right cost with the right requirements. It wasn’t in the contract, but GlobalTranz was able to pull together some good solutions. Harper-Gage said that while they have not determined the exact savings, she does think it is significant.
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