Back in 2012, a retail customer approached us with a problem. This customer has been a true partner in all senses of the word, so they always shared their internal challenges with us. This time, they shared that the previous year they had paid over half a million dollars in per-diem charges – also known as the storage charges on ocean containers when you keep them too long.

They had hired a third-party visibility provider for software to manage this process, but it was not working. The software needed to be actively managed by their internal staff, and the data was always too late and unreliable. The software solution did not make any positive impact on expenses, but did cost them a subscription fee each month, drained their internal resources, and storage costs persisted.

The Beginnings

Our customer asked if we would be willing to manage their container storage, even though it was not a service offering we provided at that time. They simply asked that we keep their cost for the service at or below what they already paid to the third-party software provider. We were honest – we did not know if we could, but we would be willing to try.

We quickly realized that because we already provided origin booking services through our Order Management product, we had records of all the shipments. As a result, we knew what was on board and inbound, and could use this information to create container records at destination. We had a powerful Transportation Management System (TMS) that was proprietary, so we could enhance it to meet our needs. Last but not least, we had great people who were motivated to solve process challenges.

"Dray Management"

I remember visiting the office that created this solution back in 2012. There were whiteboards and Excel files everywhere, as they were actively figuring out how to do what they then called “Dray Management.” It was, after all, all about keeping track of ocean container drayage moves. The team quickly realized a resounding truth – software alone was not the solution. They needed scalable ways to manage information and activity coming from steamship lines, rail operators, and the customer’s drayage providers and receiving facilities. When data was missing or incorrect, someone had to engage the owner of that data or activity to get the right answer. Often, two different parties would provide different dates and times for the exact same event. Who was right?

Ultimately, we harnessed technology to help us make decisions on some basic algorithms. We soon created a principle that we should get multiple sources of data if possible, so that we could establish the most accurate information. For example, if the steamship line website said the container was out-gated on Tuesday, but the dray provider confirmed pickup of that container on Wednesday, we “taught” the system to take the trucker data over the steamship line data. Historical information, data, and industry experience had told us long ago that was the more likely truth.

We tracked our customer’s containers from the moment we knew they were sailing from origin, through port arrival, inland moves, trucker pickup, to the delivery facility. Then, we worked with the customer’s many distribution centers to make sure the containers were emptied, picked up, and returned to the carrier, which is when we can officially stop the clock on any detention, or per-diem, charges. We built reports and basic dashboards to give the customer visibility and allow us to easily identify exceptions. It all started very manually, but as we learned, we automated.

Half a million saved

The first full year we ran this new program of “Dray Management,” the customer paid almost no detention or demurrage to their carriers. They wiped out over half a million dollars in unnecessary spend. We also realized that we could provide this service at a much lower rate than they were paying for only software. Our solution provided the technology, but active management was the key to exceptional results.

We took this innovative and locally built solution and scaled it. During this process, we gave it a new name – Delivery Management – because it applies beyond just container drayage moves. We presented this solution to some of our other large customers purchasing inbound direct ocean freight from the carriers and found they all had similar issues. Delivery Management quickly took off as we discovered how far-reaching this problem is.

Delivery Management

Today, Expeditors’ Delivery Management solution is actively tracking and managing over 200,000 containers per year for many customers. As part of our updated solution, we have integrated a brand-new customer facing collaborative platform into our core technology offering along with enhanced ETA tracking and other machine-learning technology to provide customers with the most accurate and up-to-date information in real time. We also adapted our solution to incorporate LCL shipments and export container deliveries to the port, including match-backs and multi-modal moves. Our new platform enables our customers and service providers to interact with the data directly in the system to provide one source of information.

This solution has elevated the ability of Expeditors employees across our network. The results for our customers are just as impactful. Our solution remains extremely agile as we are continuing to add functionality based on customer and employee feedback. We have helped save millions of dollars in detention and demurrage charges while unburdening their people from the headaches of trying to manage all deliveries.

Delivery Management is the active management of container deliveries, for import, export, and LCL shipments which harnesses people, process, and technology to save companies money. If you believe your company can benefit from Delivery Management, contact your local Expeditors representative today.