transportation management the redwood way · transportation process management,” says eric...

W H I T E P A P E R

TRANSPORTATION MANAGEMENT

THE REDWOOD WAY

How Redwood Logistics levels the playing field for mid-

market organizations through flexible integrated solutions

that cut transportation spend and allow shippers to focus on

their core business.

®

Produced by In partnership with


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Mid-market firms looking to extract competitive

advantage from their supply chain must

overcome unique hurdles from a supply chain

that can be deceptively complex. In today’s

economy, the supply chain can contribute to an

advantageous competitive position—or it can

undermine a company’s ability to compete.

One common characteristic of mid-market

companies is that while they’re large enough to

have wide-ranging supplier and distribution

networks, many of these firms lack adequate

logistics management resources and the

technologies required to run their increasingly

complicated supply chains.

What exactly is the mid-market? Sizable in

nature and generally including firms with

annual sales ranging from $10 million to $1

billion, this large group of shippers often faces

a set of transportation challenges that its

smaller and larger counterparts generally don’t

have to manage.1

Firms in this category can face competition from

both ends of the spectrum, from very nimble

startup firms to large Fortune 500 companies

able to devote significant resources to

developing their transportation and logistics

management competencies.

1 National Center for the Middle Market, http://www.middlemarketcenter.org/about-the-middle-market-center.


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“Integrating a TMS [with other systems] can be an expensive and complex process. We’re able to solve this problem by giving shippers access to our own proprietary technology and proven processes to enable fast, efficient and low-cost TMS integration without heavy customer-side IT resource requirements.”

—Richard Piontek, Redwood’s chief commercial officer

Transportation Management: A necessity for mid-market firmsFrom rising carrier costs to supply chain

globalization to rapidly changing customer and

marketplace requirements, the list of

challenges on the typical mid-market shipper’s

plate is both lengthy and overwhelming. As

these companies work to grow and prosper,

the number of logistics hurdles on that list

expands exponentially.

For example, a mid-market company that has

grown by acquisition might suddenly find itself

significantly larger, yet unable to leverage its

newly merged logistics networks in a useful

manner. A stand-alone transportation

management system (TMS) that doesn’t

integrate with the company’s enterprise

resource planning (ERP) solution is not an

efficient foundation to manage end-to-end

logistics processes.

“Integrating a TMS [with other systems] can be

an expensive and complex process,” says

Richard Piontek, Redwood’s chief commercial

officer. “We’re able to solve this problem by

giving shippers access to our own proprietary

technology and proven processes to enable fast,

efficient and low-cost TMS integration without

heavy customer-side IT resource requirements.”

Another barrier facing many midsize firms is a

lack of employee bandwidth. For example, it’s

not unusual to see one supervisor, manager or

director wearing three or four functional hats—

with the expectation that the person has all of

the necessary experience covered. In addition,

this individual is expected to run the logistics

process while supporting the company’s core

business. But there are only so many hours in a

day, so over-taxed managers take shortcuts,

and opt for solutions that are easy but by no

means optimal.

In many cases, mid-market companies have

grown through acquisition and are now dealing

with multiple technology platforms that don’t

“talk to one another,” which limits the

companies’ ability to monitor, measure and

control their supply chain. On top of that, they’re

facing increased transportation

and distribution costs and a

demanding marketplace that

expects flawless supply chain

performance and efficiency.

Facing these challenges with

existing resources and

manpower has turned into a

major balancing act for mid-

market shippers. To offset their

ongoing transportation and

logistical challenges, a growing

number of these companies are

turning to third-party logistics

providers (3PLs) like Chicago-

based Redwood Logistics.

This next generation integrated

logistics provider offers a unique

solution design and deployment model based on

flexible, integrated and technology-enabled

logistics capabilities aimed at helping mid-

market firms achieve and surpass their

transportation and logistics management goals.

Over the next few pages, we’ll take a closer

look at the logistical challenges today’s mid-

market firms are grappling with, show what

progressive 3PLs are doing to bridge these

gaps for shippers and learn how Redwood

Logistics is already helping companies work

smarter, better and faster in today’s competitive

business environment.


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accounting/GL coding and data analysis is an

“extra” charge that discourages shippers based

on the added cost to perform these additional

services. However, the information gained is

often far more valuable than the work of audit

and payment.

Again, taking the “shortcut” may not cause harm,

but shippers do miss out on the opportunities to

drive more value from their supply chain.

This is where the right logistics partner can

make a measurable difference. “Shippers have

experience in a core area where they are

extremely competent and capable—but it’s not

transportation process management,” says Eric

Rempel, Redwood’s chief information officer.

“Because of this, transportation management

becomes a necessity that these firms must

manage in order to get their products to market.”

Flexible freight management is the answer Most mid-market firms have a strong desire to

improve their transportation management

practices, and they may have already considered

outsourcing these functions.

The benefits gained by outsourcing transportation

management have been well documented.

According to ARC Advisory Group, for example,

by working with a 3PL to manage transportation

planning and execution, most companies can cut

their freight spend by 5 percent or more.

ARC credits this cost reduction to a number of

different factors, including better decision-

making driven by data collection, process

compliance (e.g., installing process and

technology frameworks to ensure optimal

carriers are selected for specific lanes, flows and

locations), TMS optimization capabilities and the

leveraging of domain expertise and consultative

capabilities of 3PLs as process experts.

There are several examples where shortcuts

“leave money on the table.” Probably the largest

single area is in procurement. An optimal carrier

strategy balances both large national carriers as

well as smaller regional carriers—but achieving

that optimal balance takes effort.

One must actively seek out and

develop a portfolio of carriers,

who then must be qualified,

contracted and managed. Over-

taxed transportation managers

overwhelmingly default to

maintaining the status quo with a

base of large carriers that they

trust. Change is a lot of work and

brings risk, so shippers avoid it

like the plague. While this

strategy is not wrong, it is also

not optimal.

Another area that resource-limited

transportation managers are likely

to gloss over is shipment

planning; often referred to as,

optimization. Sometimes these efforts can yield

excellent returns, but to do it effectively, it takes

technology and personnel—something that mid-

market shippers find in short supply. This

limitation is further exacerbated when systems

“don’t talk to each other.”

A final area where mid-market shippers tend to

lose out is on the settlement side. If processing

carrier invoices is done internally, mid-market

shippers rarely have the tools available to do

comprehensive financial audits, and this can

leave them vulnerable to over-paying carriers for

incorrect invoices.

Sometimes mid-market shippers will utilize a

third-party freight payment firm, so the problem

of over-paying is largely solved; however,

additional value-added services such as cost

“Shippers have experience in a core area where they are extremely competent and capable—but it’s not transportation process management. Because of this, transportation management becomes a necessity that these firms must manage in order to get their products to market.”

—Eric Rempel, Redwood’s chief information officer


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Under Redwood’s “flexible freight

management” framework are five different

process components that shippers can leverage

as an integrated process, or they can select the

subprocesses where they need the most

support first. A SaaS-based transportation

management system resides at the center of

the process wheel, While this strategy is not

wrong, it is also not optimal.

Network Optimization Procurement and Capacity Management Shipment Planning and Execution Management Carrier Invoice Audit and Settlement Data, Analytics and Reporting

Other industry insiders, such as Jason Cook, a

managing director at supply chain consultancy

Accenture, believe that by consolidating

transportation management efforts into a single,

shared service opens up a host of savings

opportunities, where cost reductions can be as

high as 10 percent to 30 percent of spend.

But many mid-market companies compete by

staying very close to their customers and have

real concerns with the prospect of relinquishing

control to a third party. Because many 3PLs want

to come in and completely take over the

shipper’s transportation management operation,

mid-market firms are more likely to gravitate to a

more flexible solution that allows them to select

from a menu of options while still achieving the

benefits of aligning with a 3PL.


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Knowing that every shipper has a unique 80/20

rule that it must solve for (e.g., where should it

allocate the most resources in exchange for the

biggest rewards), Redwood Logistics leverages

its logistics domain knowledge and solution

design expertise to take a deep dive into a

customer’s precise business needs, diagnosing,

developing and implementing the optimal

solution for each customer.

For example, many mid-market companies lack

the IT resources to undertake the complex

challenges of integrating their supply chain

execution systems. Even when they know that

integration will drive significant value, they

simply lack the time or specialized knowledge to

do it themselves.

For situations like these, Redwood Logistics

offers TMS.io, its proprietary, real-time, web-

based, B2B data integration platform. Whether

the shipper is using electronic data interchange

(EDI), application program interfaces (APIs) or

another protocol, this cloud-based, high-speed

computing infrastructure can seamlessly

manage the required integration.

Even better, it does this without having to

burden the shipper’s IT team with added

responsibilities. “We’re able to create a

tremendous amount of value,” says Rempel,

“with very low risk.”

Flexibility in actionAlong with at least 5 percent in transportation

cost reductions—or $50,000 for every $1 million

spent on freight per year—Redwood Logistics

also helps mid-market shippers achieve

procurement, capacity, automation, cost-to-

serve and customer service improvements.

By engaging with Redwood Logistics, mid-

market shippers can strategically and

selectively combine all or any of these five

components and improve their transportation

management process. So, whether a shipper

wants help with planning, procurement,

execution, payment or

analytics—or a combination of

any of these five interrelated

processes—Redwood’s flexible

approach enables a highly

customized solution for access

to the proven benefits of third-

party logistics.

“Outsource the entire process

and the technology, and you’re

leveraging our full freight

management knowledge base,”

says Piontek. “Pick and choose

just one or two of the key

subprocesses, and you wind up

with a very personalized

offering that fits your company’s culture and

operating strategy.”

Using sophisticated technology, flexible

outsourced freight management and deep

supply chain expertise, the 3PL helps mid-

market companies excel in their competitive

landscape. “We level the playing field for our

customers by applying innovative logistics and

supply chain solutions that give shippers a

competitive advantage in their end markets,”

adds Piontek.

Creating customer-specific valueIt’s an old saying that value is “created in the

office of the customer.” No two companies are

alike, nor do they face the exact same set of

challenges—even within the same industry.

Solutions that work for one customer may not

work for another.

So, whether a shipper wants help with planning, procurement, execution, payment or analytics—or a combination of any of these five interrelated processes—Redwood’s flexible approach enables a highly customized solution for access to the proven benefits of third-party logistics.


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Along with at least 5 percent in transportation cost reductions—or $50,000 for every $1 million spent on freight per year—Redwood Logistics also helps mid-market shippers achieve procurement, capacity, automation, cost-to-serve and customer service improvements.

Today, Filtration Group outsources nearly all of

its inbound logistics to Redwood, along with

planning, tendering, execution and auditing.

Leveraging TMS.io and the Software-as-a-Service

(SaaS) TMS provided by Redwood Logistics,

Filtration Group can seamlessly manage its

multimodal procurement process, handle

automation exceptions, audit freight invoices

and review pertinent analytics and reports.

Finding value outside a core competencyAnother of Redwood’s customers, a large

manufacturer in the consumer packaging sector,

utilized returnable containers to ship finished

goods to its end customers. Spread across the

company’s entire network, the management of

these containers was an afterthought, with most

of the company’s resources allocated to

manufacturing and distribution.

“They were spending millions of dollars on the

container returns process,” says Steve Wilson,

Redwood’s vice president of solution design,

“and no one was really focused on the

significant cost component.”

The manufacturer turned to Redwood for help

managing that spend category. By outsourcing

the management of its returnable containers, the

shipper not only wrapped its arms around that

particular challenge, but it also started to see

opportunities to be more efficient in other areas.

Combined, these benefits translate into higher

profitability, better productivity and an

improved ability to respond to changing

customer requirements. When taken together,

it’s easy to see how shippers who

successfully leverage the capabilities of the

right 3PL partner achieve

outcomes that contribute to real

competitive advantage.

Filtration Group has been one of

the recipients of these benefits. A

manufacturing and distribution

company with approximately $1

billion in annual revenue, Filtration

Group relies on Redwood

Logistics for managed

transportation services and as its

TMS systems integrator.

Providing filtration solutions for a

variety of markets, Filtration

Group has grown through a series of

acquisitions, rapidly gaining scale, scope and

global coverage.

Based on these acquisitions, Filtration Group

now has 17 brands and 27 manufacturing

plants in North America alone. Globally,

Filtration Group has six plants in Europe and

additional plants in South Africa, Australia,

China and Malaysia.

“Many of these brands and plants were

continuing to operate as distinct business

entities,” writes ARC Advisory Group’s Steve

Banker. “These brands were not capturing the

transportation savings that a centralized

approach to transportation could bring. Further,

the different brands were using different IT

and ERP systems.”2

2 Banker, Steve, “Managed Transportation Services or a Transportation Management System? Why Not Both?” Forbes.


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“Outsource the entire process and the technology, and you’re leveraging our full freight management knowledge base. Pick and choose just one or two of the key subprocesses, and you wind up with a very personalized offering that fits your company’s operational strategy and culture.”

—Richard Piontek, Redwood’s chief commercial officer

“We make it easy for shippers to access and

integrate with great technology for

transportation management,” says Piontek,

“without the need for a huge investment in time

or resources.”

By infusing process excellence and continuous

improvement into the mix, Redwood Logistics

effectively delivers Fortune 500–level logistics

solutions to companies that range from single-

location entities with a few million dollars in

annual sales to multinational corporations with

billions of dollars in annual revenue—and

everyone in between.

About Redwood LogisticsChicago-based Redwood Logistics is a next

generation, strategically integrated logistics

provider that believes every company’s needs

are unique. For more than 15 years, the

company has been providing solutions for

moving and managing freight, and sharing its

knowledge across North America. Redwood

Logistics is focused on making its customers

more successful in their end markets by

applying talented and motivated people, proven

processes and cutting-edge technologies to

optimize their supply chain management efforts.

CONTACT INFORMATION:For more information visit us at redwoodlogistics.com.

For example, it looked at ways to improve the

carrier selection process. It also explored new

collaboration opportunities with its end

customers and began leveraging Redwood’s

extensive analytics and reporting capabilities.

“We sat down with them, mapped

out the entire transportation

management process and ferreted

out the numerous technology and

procurement-based opportunities,”

says Wilson. “Through that

exercise, we were able to come

up with numerous improvements

that the customer could apply to

their entire supply chain in an

effort to remove costs, improve

efficiencies and gain better

visibility.”

The Redwood way

For shippers who are dealing with

new transportation management

challenges on almost a daily basis,

Redwood Logistics provides a

level of expertise, support and technology that

its competitors can’t match.

With a wide range of strategically integrated

capabilities, Redwood delivers flexible, next

generation logistics solutions and puts the

power into the hands of shippers who may not

necessarily want to outsource 100 percent of

their transportation management to a third

party. Through its flexible freight management

approach and diagnostic solution development

process, Redwood Logistics helps midsize

shippers grow and compete more effectively by

removing barriers like technology integration,

capital investment and ongoing support.

®

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