For years, electronic data interchange (EDI) was touted as the communications technology of the future. Global traders were told to scramble aboard the EDI bandwagon or be left in the dust by their competition. Some did. Others tried - until they looked at the price.
Delta Apparel, the Duluth, Ga.-based apparel maker, was one of those companies that mulled over the switch from phone, fax and e-mail to EDI, for its dealings with ocean carriers. The problem? "The cost of maintenance was astronomical," says Ray Allen, traffic and logistics coordinator. By some estimates, the price tag of setting up and maintaining a single EDI transaction set is around $50,000. That's no obstacle for big multinationals, but for a small to mid-sized company, it can put EDI out of reach.
Fortunately for Delta, it had an alternative. One of the ocean carriers with whom it did regular business, Crowley Liner Services, was a participant in GT Nexus, a provider of software which allows shippers to access the services of multiple carriers via the internet. Alameda, Calif.-based GT Nexus was developing a common, web-based platform in the areas of planning, execution and order management. Currently it partners with around 13 carriers, representing 40 percent of worldwide vessel capacity, according to Vijay Sundaram, vice president and co-founder.
An integrated manufacturer, Delta Apparel does everything from buying raw cotton to turning out a finished garment. It specializes in high-quality knitwear, mostly T-shirts, golf shirts and tank tops, which are sold to distributors, screen printers, consumers and private-label accounts.
Delta operates in six U.S. states, mostly California and in the South, along with several facilities in Latin America. It spins cotton into yarn at a plant in Edgefield, S.C. From there, the material is dyed, finished and cut into pieces at another U.S. location. It is then shipped to one of two plants in Honduras or a third in Mexico, where it is sewn into a complete garment. By handling all of the manufacturing stages itself, Delta protects itself against increases in the price of yarn or contractor services, says Deborah Merrill, director of accounting and administration.
Ocean transit comes into the picture between Latin America and the Florida ports of Miami, Port Everglades and Jacksonville. According to Allen, Delta had previously relied on phone and fax, with some e-mail, to create bookings. But that necessitated multiple calls, and a series of delays while waiting for the carrier to respond. The whole process consisted of 11 separate stages, he says.
Delta's priority for streamlining the system was documentation. Following an in-depth demonstration of GT Nexus's software, including some test bookings, the company signed on. It was up and running on the system within a couple of weeks, Allen says.
For its dealings with Crowley, GT Nexus provides one location to analyze sailing schedules, secure bookings, and electronically file key documents, including the shipper's export declaration (SED). It also creates shipping instructions and bills of lading. Finally, GT Nexus includes a module for shipment tracking and tracing. In the process, Delta gets all of the benefits of an EDI platform, without having to invest in a proprietary system.
Delta had previously made modest steps toward change, Allen says, including the ability to file SEDs online. But documentation was still being processed in the form of unwieldy, manually intensive spreadsheets. GT Nexus gave the company a much-needed technological push. Where it used to take up to 20 minutes to receive a booking confirmation from the carrier, the wait time was now zero. And since information didn't have to be re-keyed, data errors were greatly reduced.
Allen says Delta hasn't done a thorough analysis of the benefits of using GT Nexus. "I only know we're definitely saving time." In addition, the company has cut in half the time it takes to manage a typical shipment transaction process, and reduced the size of its dedicated logistics staff by a similar amount. Delta says it's saving $60,000 a year through the electronic filing of SEDs alone.
Further benefits should materialize as Delta increases its reliance on the platform. Currently it's only communicating with Crowley via GT Nexus. Allen says the company is encouraging other carriers to join. At the same time, GT Nexus is adding order-management to its transportation execution and planning tools.
Sundaram admits that the value of GT Nexus's software won't be fully realized until shippers and carriers agree on a set of standards for global e-commerce. Still, he says, the evolution of technology among ocean carriers "has been faster than in any other industry I've seen."
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