Potential cost savings of up to $13,500 annually were realized through implementation of an Electronic Freight Management System for various drayage services.
FHWA researchers assessed electronic freight management systems to optimize drayage operations for intermodal carriers in the United States
United States
Electronic Freight Management Case Studies: A Summary of Results
Summary Information
This document examined the ability of Electronic Freight Management (EFM) to improve information transfer between EFM partners and systems. As a follow up to the Columbus EFM evaluation in 2007, several additional pilot studies were conducted across the United States to assess the cost-effectiveness of EFM in terms of business process cost savings. Each EFM system was implemented in such a way to facilitate continued use of the technology once the pilot concluded. The overall goal was to demonstrate a positive return on investment (ROI) for the supply chain "anchor" companies responsible for implementing EFM within their supply chain infrastructure. Federal contractors and integrators provided a common framework to assist supply chain partners to facilitate development of custom EFM packages. Case studies were conducted to evaluate the impacts of EFM on a variety of supply chain partners. The online EFM system www.efm-saic.com allows all partners throughout the supply chain to access real-time information throughout the freight transportation cycle. Example findings are detailed below.
METHODOLOGY
The EFM implementation case studies were intended to examine the degree to which the EFM applications can improve the operational efficiency within intermodal supply chains. Each case study documented the cost-effectiveness, long-term viability, and sustainability of the EFM package, as it was modified and implemented within the supply chain.
Each case study documented the location into which the EFM package was being deployed, captured the implementation parameters that were put into place to successfully operate the package, and assessed the benefits in terms of business process cost savings to assess the return on investment to the participating organizations. The tables below show some of the realized and potential cost savings that some of the study participants (DEMDACO, Express Systems Intermodal, Interdom-Agmark, and WorldWide ISCS) found with respect to their use of the EFM package.
FINDINGS
Table 1. Summary of Potential Cost Savings DEMDACO
| Business Process | As-Is Cost | To-Be Costs | Potential Cost Savings |
| PO Generation | Total annual process cost = $3,750 | Total annual process cost = $3,750 | None = the use of the EFM package simplified the process for checking status by including PO data within the message. The process for creating and submitting a PO were unchanged, therefore no cost savings. |
| PO Shipment | Total annual process cost = $57,200 | Total annual process cost = $51,200 | Annual savings of 10% ($6,000) (Future) |
| Status | Total annual process cost = $234 | Total annual process cost = $26 | Annual savings of 89% ($208) (Realized) |
| Outbound Order Shipment: Warehouse Management | Total annual process cost = $6,000 | Total annual process cost = $2,100 | Annual savings of 65% ($3,900) (Future) |
| Outbound Order Shipment: Customer Service | Total annual process cost = $11,084/year | Total annual process cost = $9,976 | Annual savings of 10% ($1,100) (Realized) |
Table 2. Summary of Potential Cost Savings Express Systems Intermodal (ESI)
| Business Process | As-Is Cost | To-Be Costs | Potential Cost Savings |
| Container Availability | ESI Total Annual Cost = $0 | ESI Total Annual Cost = $0 | ESI = $0 |
| Container Status | ESI Total Annual Cost = $4,212 | ESI Total Annual Cost = $4,000 | ESI = $212 (5%) |
| Dray Invoice | ESI Total Annual Cost = $3,692 | ESI Total Annual Cost = $74 | ESI = $3,618 (98%) |
Table 3. Summary of Potential Cost Savings Interdom-Agmark
| Business Process | As-Is Cost | To-Be Costs | Potential Cost Savings |
| Order | Interdom Annual Cost = $3,600 Agmark Annual Cost = $600 | Interdom Annual Cost = $360 Agmark Annual Cost = $600 | Interdom = $3,240 (90%) Agmark = $0 |
| Status | Interdom Annual Cost = $3,120 Agmark Annual Cost = $500 | Interdom Annual Cost = $1,560 Agmark Annual Cost = $500 | Interdom = $1,560 (50%) Agmark = $0 |
Table 4. Summary of Potential Cost Savings Worldwide ISCS
| Business Process | As-Is Cost | To-Be Costs | Potential Cost Savings |
| Transportation Status - WorldWide ISCS | 2010: $6,500 2011 (6 months): $3,250 Pilot (3 months): $1,625 | 2010: $2,167 2011 (6 months): $1,083 Pilot (3 months): $542 | 2010: $4333 (66.7%) 2011 (6 months): $2167 (66.7%) Pilot (3 months): $1083 (66.7%) |
| Transportation Status - Griffin Pipe Products Co. (savings of a customer of WorldWide due to the EFM project) | 2010: $15,281 2011 (6 months): $5,962 Pilot (3 months): $2,981 | 2010: $1,698 2011 (6 months): $662 Pilot (3 months): $13 | 2010: $13,583 (88.9%) 2011 (6 months): $5,300 (88.9%) Pilot (3 months): $2968 (99.5%) |
This report, dated June 2012, conveys the value that publicly available electronic freight management systems can add to the optimization of intermodal freight operations. These findings along with the benefits provide a valuable resource to those considering the implementation of advanced technology for the optimization of intermodal freight logistics.
