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August 17 2020

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36 The Journal of Commerce | August 17 2020 www.joc.com Special Report 2020 JOC Guide to Trucking LESS-THAN-TRUCKLOAD (LTL) CARRI- ERS set the pattern for US trucking a hundred years ago, but due to the complexity of the business, LTL oper- ators and their shipper customers have been slow to change, leaving the industry mired in decades-old operat- ing procedures and processes. But in its second century, time and technology are catching up with LTL trucking. The wave of digital technologies already transforming truckload and brokerage is reaching into LTL, driven in part by larger supply chain changes wrought by the explosion of e-commerce. That digitization — a replacement of manual, paper-based information processes with electronic ones — will change how shippers use LTL within their international and domestic networks. Shippers will have precise data on cargo, from pickup to delivery, on which to base decisions. Carriers will have more data on how and where they serve specific shippers and what their real costs actually are. That will help them build better networks and speed LTL services. There's no one route to digitization, but the LTL operators and software providers that spoke with The Journal of Commerce agree it's about eliminating paper docu - ments and connecting partners to create money-saving efficiencies and improve service. "We see it as the ability of stake- holders in the movement of goods to transmit data and interact sys- tem-to-system, whether they're the carrier or the shipper, or sometimes a third party," said Brian Thompson, chief commercial officer for SMC3, an LTL data and solutions provider. "We are looking to digitize the entire LTL shipment lifecycle from start to finish. When that happens, your cost to move goods goes down and you get better visibility, not just of the shipment but trends, so you can manage your business better," he said. "The first stage is transmitting data and aggregating it; the next stage is taking that data to the next level and making it useful. That can't hap - pen until you've gone down the path of digitization." The US LTL sector is still on the early steps of that path, though some major LTL carriers have had parts of their operations digitized for years. The next steps require connecting various digitized LTL operations and integrating LTL into broader digital supply chains. Technology isn't the hurdle, though; some trucking companies have been electronically sharing data with customers since the 1990s or even 1980s, first via electronic data interchange (EDI) and more recently via application program interfaces (APIs). The hurdle is in the process, in implementing digital standards, and in getting customers to buy into going digital. Shippers in the past have been reluctant to digitize, but the COVID- 19 pandemic is increasing the need for detailed shipment visibility and paperless transactions, and that's generating greater interest among shippers in moving to more digital LTL processes. From paper to bits The place to start, many LTL operators insist, is with digitizing the bill of lading (BOL). The BOL, both a binding contract referencing shipping terms and a detailed description of a shipment, has been printed on paper since the early days of the printing press, and before that, written on vellum, papyrus, and clay. Now, that information is being translated into digital bits. "The bill of lading is a very obvious place to start" the LTL digitization journey, said Geoffrey Muessig, chief marketing officer at Pitt Ohio, the 16th-largest LTL pro- vider in the United States in 2019. "Although shippers are digitizing systems within their four walls, when it comes time to tender a shipment to an LTL carrier, all of a sudden they hit a button and print a paper bill." A truck driver takes the paper BOL to the LTL terminal, handing it off to a freight clerk who then keys the information into the carrier's linehaul management system. "That break in digitization is really what needs to be solved," said Muessig. Webb Estes, vice president of process improvement at Estes Express Rewired How digitization is transforming trucking's oldest sector By William B. Cassidy, Senior Editor

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