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Article
Descartes Transforming the Customer Experience
Highlights from the Descartes' 2019 Evolution Conference

Descartes is elevating and broadening the scope and value of the transportation management function from the traditional behind-the-scenes efficiency and cost control to a more visible, customer-facing role, creating a superior customer experience.


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The first half of this article focuses on the use of transportation and logistics to transform the customer experience, with several examples we heard from the Descartes conference. The second half of this piece is about Descartes’ acquisition capabilities, with a summary of recent acquisitions.

Transforming the Customer Experience

What ingredients make a great customer experience? We typically think of a beautiful and intuitive product design, easy and enjoyable buying experience, and top-notch customer service. Logistics is part of the equation for sure, but is normally more of a behind-the-scenes service. Transportation and logistics folks are supposed to simply always deliver on time at the lowest possible cost. If they are doing their job, then they just blend into the background. If they are getting lots of attention, it is usually because things went wrong—the shipment was late, or damaged, or incorrect. However, transportation and logistics are playing an increasingly visible role in the customer experience, providing new services and capabilities that are an essential part of the great customer experience.

Hence the theme of the 2019 Descartes Evolution Global User & Partner Conference was “Transforming the Customer Experience.” This elevates the logistics department from being just a cost center to be minimized to becoming a key player on the total Customer Experience (CX) team. Of course, logistics is already part of Team CX, but is only recognized as ‘don’t let bad things happen,’ rather than ‘delight the customer.’

P.C. Richard—Improving First Time Repair Rates

Throughout the conference, I saw many examples of Descartes’ clients using transportation and logistics to create a better CX (Customer Experience). For example, we heard from Rick Gioia, one of the members of the Descartes Global User Group steering committee. Rick is Director of Service for P.C. Richard, a chain of 66 stores selling and servicing appliances, electronics, and mattresses. The service experience is a critical part of CX (Customer Experience). Unfortunately, all too often customers’ service experience can be painful. People have to take time off from work to be there for the repairperson. Then too often, the technician doesn’t have the right part—according to one source,1 80% of appliance repairs do not get completed on the first visit. In those cases, the consumer now has to take yet another day off from work and has an appliance out of commission for another week or two.

P.C. Richard already had a 64% first-time completion rate on service calls. They wanted to improve on that. So, they started publishing route plans ahead of time and letting the service technicians order the parts before the visit. This increased first time completions from 64% to 73% and reduced the average first-call-to-completion time from 11 days down to 6½ days. Besides improving the customer experience, this has reduced their repair costs and the number of calls to their call center. Rick said, “the affect on the business and customer satisfaction has been profound.

Richards Building Supply—Preventing Disputes by Recording What Actually Happened

We also heard from Ron Guzior, Vice President at Richards Building Supply. Founded in 1978, Richards sells and delivers building supplies to construction companies and builders. They have about 60 locations throughout the Midwest, Mid-Atlantic, and up into the Northeast. Their delivery drivers take pictures of all the items they delivered, at the site where they were delivered. In addition, especially when driving a heavy truck, they take pictures of the condition of the driveway or part of the site they will be driving on, before and after their visit. This dramatically shortens any disputes or questions by the customer about exactly what was delivered or whether the delivery caused damage to the driveway or site. Confrontational, relationship-eroding exchanges (“You didn’t deliver the lumber”, “Yes we did”) are avoided.

Builders will painfully remember every time a delivery was late and their workers ended up waiting, unable to proceed (but still getting paid), while the schedule slips. With the right systems in place, Richards is able to show their customers exactly what their on-time delivery performance is. This helps to calm down emotional accusations and allows for a fact-based discussion on improving performance, rather than relying on skewed memories of both parties. With evidence-based discussions, the relationship with the customer becomes more reasoned and both sides can focus on problem solving, rather than arguing about what actually happened.

Giving Visibility and Control to the Customer

There were several examples of giving better visibility and control to customers:

  • Another building materials distributor, US LBM, does their route scheduling using Descartes. They use the Descartes Route Planner™ scheduling APIs with the contractors’ application they created. This allows contractors to schedule the deliveries themselves in the US LBM application as well as track the status.
  • Broker/Forwarder John S. James Co. extracts data from their Descartes OneView™ Forwarder Enterprise solution and puts it on their website so their customers (shippers and importers) can see the status and manage their international shipments. That is a big step up from the traditional approach still used by many small and mid-sized brokers where the customer has to make phone calls to the customs broker to check the status of their shipment or to request changes.
  • BASF, the world’s largest chemical manufacturer, uses Descartes MacroPoint™, a load tracking solution providing GPS-based real-time updates and event notification on the location of shipments. Using this, BASF conti­nual­ly recalculates dynamic Expected Time of Arrival (ETA). The closer the driver gets to the destination, the more accurate the ETA is. They provide this dynamic ETA to both shippers and their own staff, including alerts when the truck is near the destination or running late. This allows the receiving dock to better plan labor and operations (such as put-away) to adjust accordingly.

Echo Global Logistics—Leveraging Technology, More Than Just a Broker

We also heard from Dave Menzel, President & COO of Echo Global Logistics. Founded in 2005, Echo was initially started as a transportation management system (TMS) company, which evolved into a $2.5B technology-based 3PL/broker. They developed EchoShip – a portal for small and mid-sized shippers to request quotes, book and track shipments, and manage invoices. It provides real-time visibility as well. For carriers, they created EchoDrive, a combination of drivers’ mobile app and dispatcher’s web portal. Carriers can use it to bid on loads, rate the locations where they drop off and pickup loads, update shipment status, get paid, and access volume-moved analytics.

After experiencing the industry-wide trucking capacity shortages and price increases in 2017 and 2018, one of Echo’s customers, Newell Brands, asked Echo to help them become a ‘shipper of choice.’ They wanted to be the first choice for truckers to do business with. This involved having clean facilities, but more importantly reducing the detention and loading time of trucks at their facilities. Using GPS data from their systems Echo was able to provide reports and average dwell time at all locations. They helped Newell focus on the bottom third with things like drop trailer programs and other improvements. This resulted in a 30% reduction of dwell times, helping make Newell a preferred shipper … and making Newell happy with the ‘above-and-beyond’ services they were getting from Echo.

BC Sands Delivering Value to Builders and Contractors

One of the best presentations I saw at the conference was by Mark Parson (Managing Directory) and Tina Winkler (IT manager) of BC Sands, a Sydney, Australia-based supplier of construction materials and hardware, landscaping products, and firewood. They are a relatively small business, with about 30 delivery trucks in their fleet. The fleet of trucks is not homogenous. They have dump trucks (called ‘tip trucks’ or ‘tippers’ in Australia), dump trailers (called ‘dog tippers’), flatbed trucks (with and without cranes), box trucks, and compartmentalized trucks that can hold different materials (e.g. sand in one, aggregate in another, etc.). Their main yard has many frontend loaders, forklifts, baggers, and other equipment used to put the materials on and into the trucks as they arrive. This video shows an informative flyover of the operations in action, giving a sense of the scale, variety of equipment and materials, and intense amount of busy activity concentrated in one place.

Figure 1 - Forklift, Flatbeds, Customer Pickups at BC Sands

Figure 2 – Frontend Loaders, Crane Trucks with Bags, Various Construction Materials at BC Sands

Yard-based Kiosk Provides Visibility, Dramatic Reduction in Turnaround Times

To manage the fleet and delivery scheduling, they use Descartes Route Planner, Descartes Mobile™, and Descartes Reservations™.2 This allows precise tracking of all trucks and deliveries. They installed a ruggedized kiosk in their main yard. The information on the kiosk is refreshed every two minutes, showing which trucks are approaching, what sequence they will arrive, and what orders are in the queue for those trucks. The system also looks at future loads to anticipate work that needs to be done ahead of time, such as items that need to be bagged or premixed. The yard workers (they call them ‘yardies’) can see what order is next and whether anyone is working on that order, or whether it has already been pre-picked. The driver also gets notified of exactly who pre-picked their order and where it is. If there are any questions (like a missing item) they know who to ask. Previously drivers would come to the yard with paperwork in hand and have to just ask around about where their load is and hope they found someone who knew. The order may or may not have even been prepicked yet. The new system reduced average turnaround times for drivers from 45 minutes down to 15 minutes—a 3X increase in productivity for drivers’ load pickup.

Accommodating Customers’ Last-minute Changes

In addition, since this is in real-time, it allows the yard to much more easily accommodate last-minute changes, which are common in the construction industry. If there is a cancellation or change, the picker is notified and asked to double check if that change has been implemented. Customers really notice that BC Sands is able to respond to last-minute requests and this makes BC Sands the preferred source for many of them, in spite of not being the lowest cost.

Keeping the Customer Informed at Every Step

Customers can make delivery requests online or over the phone. Then they are notified via text messages at each milestone—when the order has been picked, loaded, en route, imminent arrival, and delivered. This allows the construction site to be prepared, clear space and/or reserve needed parking space (especially critical in urban construction), making the drop-off go much smoother for all. The driver’s app allows them to record and deal with issues at the site or on the road, such as unplanned returns from the construction site, accidents, or maintenance needs.

Customers are sent email notifications upon receipt of the order, confirmation of delivery date and time, and reminders at 4PM the day before and 9AM the day of delivery. Invoices are emailed or faxed at 10PM on the day of delivery. Proof of delivery is sent the morning after the delivery is completed for customers who request it.

Sales Enablement

Tina also implemented a color-coded grid showing an overview of utilization for the entire fleet. This lets salespeople see where and when there is available capacity, enabling them to give customers immediate answers, without having to stop the discussion and go ask the route planner. Even if they can’t fulfill the exact request from the customer, they can still save the deal by telling the customer what they can do—e.g. ‘We can’t deliver 6 tons tomorrow, but we could deliver 3 tons and then the rest the next day.

Reducing Empty Miles Driven

Fairly often, BC Sands gets bulk orders for larger quantities that need to be picked up directly from the quarry, rather than their main yard. With visibility into equipment availability and location, the dispatcher can see whether there are or will soon be an empty truck near the quarry. In the past, the dispatcher would have to make all kinds of phone calls and often the drivers would end up coming all the way back to the main yard just to turn around and drive back out to the quarry they just drove by. This also allows transfers between locations—the routing allows any start and finish location to be specified.

Driver Incentives and Notifications

Drivers get bonuses for delivering the companies newsletter to customers (helps increase sales) and for keeping their truck clean, both of which they prove by taking pictures using Descartes Mobile. Drivers are auto-notified each night what time to arrive in the morning. This way they aren’t waiting around for hours for the first job.

What made the BC Sands implementation especially impressive is that it was implemented by their one person IT organization. Tina was able to create all of this functionality on her own using the Descartes solution and APIs.

Descartes’ Acquisition Machine

Descartes is one of several technology companies that are serial acquirers, and I think one of the best at it. It starts with being selective in acquisitions. Too many firms imagine synergies that aren’t there and/or overpay. Perhaps more importantly, it seems Descartes looks for a good cultural fit and gives acquisitions breathing room. I’ve noticed many of the founders of acquired companies stay with Descartes long after their tie-up period is over, an indicator that things are going well.

Serial acquirers, like Descartes, E2Open, and Infor, have both backend and front-end integration tools and architectures, providing the mechanisms for new acquisitions to be rapidly integrated into the suite so that they can participate on the network, cooperate with the other applications in the suite, and present a common user interface, including a single sign-on. Descartes’ backend integration includes both external (B2B) integration to allow trading partners to connect and internal (A2A application-to-application) integration to allow applications within the suite to talk to each other. The A2A integration includes an Enterprise Service Bus, a canonical data model, Single Sign-on (SSO), and a UI framework (OneFace).

Descartes Global Logistics Network™ (Descartes GLN™) provides both external and internal backend integration. It includes EDI, supplier and carrier portals, API integration with carriers, a canonical data model to provide a common set of shared data objects across applications in the suite, and integration with over 300 telematics/ELD devices. Last year, Descartes launched their OneFace Framework, to provide SSO, cross-application navigation, and a consistent UI when combining multiple Descartes applications. They are not migrating all of their applications right away to OneFace, but will take a phased approach over time … and some of the older applications may not be migrated to OneFace. All new development will be done using the OneFace framework.

Three Most Recent Acquisitions—Telematics, Air Parcel Tracking, and Denied Party Screening

Descartes made three acquisitions during the past year:

  • Pinpoint GPS Solutions—A major global distributor and installer of telematics devices and software, including Geotab (telematics/ELD), SkyBitz (trailer tracking), and Fleetio (fleet maintenance solution). Acquired in August 2018 for $11.5M, these capabilities should help Descartes customers with real-time fleet location visibility (including providing location updates to shippers), ELD compliance, more effective HOS compliance, and tools to potentially improve fuel economy, reduce accidents, and improve vehicle maintenance.
  • Velocity Mail (aka Vmail)—In June 2018, Descartes acquired Vmail for $25.5M. The platform provides air carriers with the tools to scan mail and parcels that they are carrying for postal authorities around the world, thus providing them with real-time visibility. Although physical mail is on the decrease, parcel deliveries are on the increase, making this an important service. Parcel shippers have come to demand granular, up-to-date tracking information, based on expectations set by services from the major parcel carriers (FedEx, UPS, DHL). Vmail helps automate the shipment process for air carriers including parcel/mail scanning and tracking, generating routes, and account reconciliation.
  • Visual Compliance—Visual Compliance is the world’s largest provider of denied party screening services. They also offer denied party audit and resolution, export classification and compliance (for controlled technologies), and export automation capabilities. Descartes acquired Visual Compliance in February 2019 for $250M, their largest acquisition to date. There appears to be functional overlap between Visual Compliance and Descartes MK (denied party screening), so it will be interesting to see if/how Descartes rationalizes and potentially merges the two suites. Visual Compliance further strengthens Descartes’ suite of global trade content capabilities, which also includes Datamyne (analytics based on public trade filings—such as master and house BOLs and container manifests—acquired in 2016) and CustomsInfo (provider of global trade data such as classification, duties and tariffs, taxes, etc., acquired by Descartes in 2014).

Ten Other Acquisitions in Past Three Years

In addition to the three acquisitions mentioned above, Descartes has made 10 other acquisitions since 2016:

  • 2017 acquisitions:
    • ShipRush—Lets SMBs3 integrate parcel shipping with their ecommerce website, providing package labelling, rating, tracking, and postage processing.
    • PCSTrac—Pool distribution for specialty retailers and the 3PLs that serve them. Provides carton-level operations and tracking through the shared DC to the store.
    • MacroPoint—Real-time multi-mode shipment tracking (location and condition) for shippers and LSPs4, with automated capacity matching for LSPs.
  • 2015-16 acquisitions:
    • Appterra—B2B integration capabilities, adding to GLN capabilities
    • 4Solutions—B2B integration, focused on healthcare providers in Australia
    • Datamyne—Analytics based on public trade data filings
    • pixi* Software GMBH (pixi)—Ecommerce order processing/fulfillment (pick, pack, ship)
    • MK Data Services—Denied party screening
    • BearWare—Pool distribution software for 3PLs and retailers
    • Oz Development—Ecommerce fulfillment and shipping for SMBs

Integrating Overlapping Acquisitions—Combining PCS and BearWare for Retail Distribution

BearWare and PCSTrac were competitors before being acquired by Descartes. They both provide software enabling retail distribution for specialty retail. (To learn more about pool distribution, see Advanced Pool Distribution). Quite a few customers (especially on the 3PL side) use both platforms. Initially, Descartes thought they might migrate all the users from one platform to the other, but once they looked under the hood at what it would take, they realized it made more sense to build a new combined application from the ground up, leveraging the best IP from both systems.

This also gives them a chance to modernize the underlying technology (BearWare was founded in 1987, PCSTrac in 2001), such as moving from a desktop system to a cloud-based system, from Windows Mobile to Android and eventually iOS, and migrating from transferring data in batch using hundreds of files to a modular, near-real-time SOA5 approach . They will also create tighter integration with other Descartes applications—integration with Descartes MacroPoint, TMS and route planning solutions are at the top of the list. The team is not only looking to reimplement functionality from both platforms, but as well for opportunities to simplify processes and remove steps.

Descartes’ new retail distribution capability will consist of two new applications: 1) Descartes RetailTrac™ (replacing RDS) for visibility and reporting and 2) Descartes RetailScan™ (TMS functionality for the 3PL), for load planning, inbound and outbound operations, carton-level scanning and tracking, claims management, and invoicing/payment functionality. They expect it will take 18-20 months to develop these new capabilities. The UI will be developed using Descartes’ OneFace6 UI framework for consistency with the rest of Descartes’ suite.

One of the benefits of the BearWare system is the same Standard Operating Procedure (SOP) used by all 3PLs using the platform. The 3PLs are trained and certified on the SOP, to ensure quality and consistent performance. This enabled the retailers to use any 3PL in the network and get consistent results. The new system will continue to use and improve on the SOP from BearWare, retaining those benefits.

The Road Ahead

We expect Descartes to continue to grow, both organically and through successful acquisitions. As it does, its footprint continually expands. It already has possibly the broadest set of transportation logistics tools of any suite, with capabilities in six areas: 1) Routing, Mobile & Telematics for managing and optimizing fleets, 2) Transportation Management—for managing and optimizing for-hire transportation (BTW, Descartes can also optimize fleet and for-hire together, for companies that do both, as described in Unifying the Private Fleet with Purchased Transportation), 3) Customs & Regulatory Compliance—automation of customs and regulatory declarations and filings, customs warehouse management, and industry programs support (e.g. C-TPAT) 4) Broker and Forwarder Enterprise Systems—ERP systems for brokers and freight forwarders, 5) Global Trade Content—including denied party screening, trade data, and analytics, and 6) Global Logistics Network—B2B and inter-application integration, common UI. With continued acquisition, this rich set of functionality will only broaden. Of course, with so many acquisitions comes the challenges of integration and overlapping functionality (or many systems doing approximately the same). Descartes is addressing that in some cases by merging similar functionality, as well as starting to unify the UX across applications.

Descartes is leveraging AI for things like more accurate dynamic ETAs, estimation of job completion time for installers and service technicians, automated product/SKU classification for import/export compliance, and anomaly detection for earlier alerting to when things are going wrong. They are developing big data analytics to provide additional layers of intelligence from the immense volume of granular data that flows through their network, including telematics location and condition data. Descartes invests about 17% of their revenue back into R&D, which is a relatively high number for a software company.7 In short, the road ahead looks bright for Descartes and we expect it to continue to dominate as a leader in the transportation software space.

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1 This post on Kreos Capital quotes that figure from Itai Hirsch, CEO and Co-Founder of Puls Home Services. -- Return to article text above

2 Descartes Route Planner does route optimization for private fleets. It performs continuous optimization of routes as new orders come in, to reduce operating costs and miles driven, and improve customer service. Descartes Mobile provides two-way communications between dispatchers and drivers, with real-time location tracking. Descartes Reservations provides web-based scheduling of deliveries—either self-service or as a support tool for customer service agents—with optimization of appointments. -- Return to article text above

3 SMB = Small and Medium Business -- Return to article text above

4 LSP = Logistics Service Provider -- Return to article text above

5 SOA = Service Oriented Architecture, where inter-application integration happens via a set of webservices. -- Return to article text above

6 OneFace is Descartes’ framework for applications to provide single-sign on, a consistent look and feel, and the ability to create more seamlessly multi-application workflows. -- Return to article text above

7 By comparison, SAP, Oracle, and Microsoft spend about 13%-14% of revenue on R&D, and Google about 15%. Startups and smaller firms tend to spend more on R&D as a percent of revenue. -- Return to article text above


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