Introduction — MercuryGate’s Groove
MercuryGate customers had a full load, so to speak, of technology innovations and transportation best practices in Las Vegas last week.
MercuryGate is the fastest growing TMS solution provider in the market today. In their early days, they committed themselves to the service provider market, focused on mid-size players. Focusing on mid-size players was a smart entry into the market, since they embraced the cloud more so than larger players.Achieving excellence in this market has allowed them to deal with the most complex issues associated with managing global trade. Service providers deal with the ‘challenges of multiples’ — multi-site, multi-customer, multi-mode, and global. With that as a foundation, they have successfully pushed forward into the shipper market, winning significant business in large and small manufacturing, wholesale, and retail firms.
This conference was loaded with technical and professional insights — a great how-to — for shippers and service providers. MercuryGate broke the conference into two, two-day conferences — one for logistics service providers (LSPs) and one for shippers.
Kicking off the service provider conference was founder and CEO Monica Wooden. Hard-charging and dedicated are not adequate words to describe Monica. She and co-founder Steve Blough founded MercuryGate thirteen years ago. Initially taking a conservative growth path, this self-funded company has gotten their groove on!
In the last few years, their growth has really taken off. There are number reasons for this:
- User acceptance of the cloud. Cloud is a natural environment for transportation.
- Single platform. Since their inception, MercuryGate focused on a platform approach where all functions blend on a single database. This keeps development efficient and cost effective, and keeps the cost of technology manageable. Many of their competitors are composites of multiple acquisitions; therefore, the purchasing process for end-users can be a bit muddy.
- Dedicated TMS. There are many players in the transportation market, but not many of these are TMS — they may do only international trade and customs, or rating engines, or load board, or visibility solutions; or they may be TMS that may focus on a specific mode (Trucking, Ocean, and Air).
- MercuryGate, although they started with trucking, has dedicated themselves to the enormous challenges associated with multi-mode transportation, with full ocean features now in the solutions.
- Dedication to usability and productivity. Transportation management is a very complex activity, whether you are a shipper or LSP. MercuryGate has thought deeply about how to make the software as easy to use as possible.
User conferences are great for hearing companies tell what they are up to. But the real validation comes from the customers. I was fortunate to meet many logistics service providers and shippers (suppliers, OEMs and retailers). No company is without challenges, but their enthusiasm for MercuryGate’s products and their relationship with MercuryGate was apparent.
It was interesting to meet many small to mid-size brokers. A few I talked to told me that they leveraged MercuryGate as the enabler to start the business. Often these small entrepreneurs learn the trade from previous employers and as one told me, “I learned what not to do at my old company.” Another told me he set up his past employer’s systems and was frustrated by the approach they used. Several who had small firms also were very declarative about the productivity gains they experienced from implementing some of the capabilities, such as the new version of the rating engine, the FreightFriend, and Mojo, the optimization product. Several large LSPs had complexity challenges associated with integrating to their customers’ systems. They felt that MercuryGate gave them an advantage in managing complex freight challenges across dynamic and diffuse requirements as well as in integrating to multiple back-end ERP systems.
Monica told us that the company has had rapid growth: they sign up about five new customers per month, and opened new offices in the UK, North Asia, and India. Another key aspect of MercuryGate’s success is the culture and philosophy by which they run the company. Like other cloud providers, they provide SaaS-subscription pricing for users. But unlike other cloud logistics providers, there are no set-up fees. You pay when you go live.1
MercuryGate launched as a self-funded tech company — another unusual phenomenon. And believe me, that is not due to a lack of suitors. MercuryGate has been bombarded by Private Equity and Venture Capitalist firms who not only know there is opportunity in TMS, the fastest growing segment in the supply chain market, but who also want to get into a successful cloud company.
Other Updates and Insights from the Conference
As mentioned above, the developers have been working away to build out and innovate in order to excel in a truly competitive market. Service providers have the ability to manage complex data and multiple customer relationships and have the tools that allow them to manage their own pricing, margin, contracting, and settlements to run a profitable business.
An overall TMS for a service provider allows for both strategic and tactical effectiveness — from winning customers and contracting profitable relationships with carriers, to day-to-day load building, visibility, and accounting. It’s a data-intensive process whose challenges are exacerbated by the fact that many players in the industry are not too automated. Many small carriers — who may be very reliable partners — lack the integration and ‘data at the fingertips’ capabilities.
Therefore, MercuryGate has developed an expansive footprint to ensure that the service provider’s business model is covered. For example:
- Owner/operation functions
- Drive data capture
- Easy-to-use load matching
- Mobile integration and dashboards
- Easy to use rating engine
- Productivity methods for contracting, etc.
The conference included both the new capabilities as well as the how-tos. It was a very practical approach for explaining what is included in the software and how to use it. The content was extensive and deep. I am highlighting a few points here. (I am sure other attendees would probably think that other things were more important.) If you want more in-depth information, I encourage you to go to the company’s website where there are extensive feature write-ups.
We consumers often don’t grasp the behind-the-scenes complexity when a shipment occurs. Every aspect of the shipment has a rate associated with it and each carrier has a rate for each route and lane. Additional services — assessorials — complicate the challenge, as do taxes and duties. In determining a carrier, whether for a long-term contract basis or spot opportunity, the system has to have the fine details. Data, and easy-to-access screens and workflow to process each shipment quickly are critical, since in the transportation world, available capacity can disappear fast. Rates can change daily, as do fuel costs, implementation of new policies that change assessorial fees, and region-by-region implementation of new regulations. It is here that profits are made or lost, so accuracy is critical.
Each relationship may have pre-negotiated rates, thankfully, but often, shippers feel like they may be on the losing end of those agreements. So they frequently request the LSP to work in a more dynamic framework, requesting gain sharing rates, for example. They want to know if the service provider can get them a better deal.They also look for reporting and other information about lanes and carriers such as benchmarking across lanes, etc. All this makes it difficult for the LSP to calculate their own uplift — their margin — in the deal.
MecuryGate’s new version of the rating engine has built in many features that simplify these processes, allowing templating of processes and data for reuse, highlighting where data is needed or missing to complete transaction, as well as assisting with post-shipment invoice and freight audits to ensure all the agreements and rates are correct. Depending on the methods you choose, the system can guide you through to a successful conclusion.
One of the customers in this session declared that they had achieved “massive improvements in rating speed” using the rating engine.
Freight Can Be Friendly
Matching a load, that is finding a carrier to move your freight, is another challenge that is data intensive and requires speed to complete.
FreightFriend™ is a free load and truck posting service where carriers and service providers can conduct business. Based on a social platform, FreightFriend provides an intuitive approach to posting, searching, and matching freight with available capacity — from your friends.
So who is a friend? Carriers that have moved similar loads for your company in the past. And what will your friends tell you? For shippers and service providers:the location of an actual truck in an actual place on an actual day, as well as lanes that carriers are looking for on a regular basis. Conversely, the carrier can find a broker or a shipper’s load posted.
Smarter friends — the FreightFriend has intelligent logic for matching loads and equipment. Matched loads can trigger alerts between friends. An easy-to-use dashboard shows available loads and associated matches. FreightFriend is constantly refreshing with current matches so what you see is real-time data.
Thus, all the sifting and sorting in the matching exercise is much easier.
There is FreightFriend Plus which does have a fee associated with it. One service provider told me that this was a key reason for choosing MercuryGate. As he explained, “There are lots of carriers I deal with, but there are the ones I really like. I prefer to do business with them first. If I can find their availability fast and organize the load, that makes it easy for all of us.”
Transportation management — from customer’s or partner’s onboarding, establishing rates, and load building — to invoices and settlement are complex activities made more so by all the options that are available today. These are data-intensive activities and accuracy is required to complete a transaction, get the shipment on its way, and post shipment data so that everyone gets paid quickly.
Their new built in capability uses generated workflows, an embedded capability they call ezClick. This is a ‘one-click’-type approach to ensure the correct processes are followed, and it’s the fast lane for users who have scrubbed their data.
Why is this important? Growing service providers have challenges with new employees learning the job, the routes, the customers, and the system. Having guidance to get though a successful workflow can ease the burden. Here is where the ezClick shines. Super users can template the work so that less experienced users can be sure they are completing all the necessary steps. Speed is critical in posting loads, and ezClick is a real speed and productivity booster.
Productivity gains can be created and managed easily for large shippers, such as retailers who manage their suppliers’ freight, or for service providers who create a unique portal for each customer and carrier. Portlets can also serve as a template, which is extremely helpful, since a service provider may have a few or hundreds of customers. An attendee from a mega-company that has hundreds of customers stated that they are able to set up a new customer in a number of hours. As a service provider this is a huge selling point!
Creating an interface quickly and completely is key for any size service provider. And having simpler screens, flows, and reports allows a service provider to scale quickly to meet the challenges associated with adding new customers, adding new partners, etc.
Finance and Accounting
Since the logistics industry is a mesh of multiple transactions and players and so many shipments are multi-leg, one ‘little’ shipment often requires multiple parties. One of these little shipments can have multiple rates as well as each player’s profit margin associated with it. It’s easy to make mistakes. A mistake is not just costly in terms of a fractional miscalculation, but often players refuse to pay their bills if everything is not perfect, as several people told me. They adopted MercuryGate to eliminate these errors and improve accuracy and financial settlements.
A great TMS needs a great financial system for creating contracts, determining methods for rating, determining profitability, invoicing, and integrating to the accounting systems for accounts payable and receivable. This is an area in which the solution providers need to be vigilant. Taxes, customs and duties, various rates and when to apply them, as well as translating into local languages all need to work seamlessly. A TMS cloud provider should provide the software, access to rate tables, tax tables, and other types of subscription data to ensure accurate accounting.
Beyond transactions is the spend analysis, optimization, and refinement of freight policies, so analytics and reporting sitting on top of all this on the same platform makes it easier to integrate the tactical and strategic views of transportation management.
Service vs. Shippers
The services side of the conference covered a lot of territory, not only oriented toward the technology and how to use it, but how to leverage the technology to increase your business. This is the core issue, is it not? Growing your business requires rapid onboarding and methods to demonstrate your services and your methods for process improvement and cost saving for your customers. Interestingly, I talked to several shippers who were following the trend set by some of the mega-companies like Walmart to manage more of their own freight. So the dividing line between these two worlds is blurring.
Paradigm from the Cloud — Conclusions
When I look at software firms these days, I often see divergent approaches to software development.
One way is to think about software is module design and pricing: functional software purchases are distinct from integration, communications, and data. The other is SaaS/on-demand services, pricing and implementation. Development paradigms are based on the web world: incorporating the networks of data and processes, social, search, and the like, within the application. MercuryGate looks at the world through this web lens. Thus, a lot of attention is paid to managing the data and communications network as a core capability.2
MercuryGate’s mobile, web-integrated data network, subscriptions to data sources such as ocean and flight schedules, social networking, international trade documents, and other capabilities are all part of a one-service SaaS package. This makes it really easy to understand the costs associated with implementation and the ongoing costs. Customers get the benefit of the massive, complex industry integration in the shared services, and their total cost of ownership is reduced by the cloud. A pretty good deal, I would say.
1 You still may have services associated with your implementation. — Return to article text above
2 This is in contrast to on premise, where a software firm uses custom APIs to tie your TMS modules together, and then bolt on the customers’ EDI/AS2, mobile, etc.
To view other articles from this issue of the brief, click here.