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How to Cut Your NZ Freight Costs and Improve Service

An online shipper/truck operator matching service recently launched by New Zealand startup, TNX, is reportedly delivering 10% cost savings to the former while also reducing the 40% under-utilisation of vehicles said to currently be commonplace for the latter.

Following a private beta trial run with a select group of customers in August last year, TNX launched its open beta version in January this year, advised Alex Hoffmann, one of TNX’s managing directors.

“For a low-margin activity such as shipping/freight, search costs can quickly exceed the value of finding a suitable alternative carrier,” he told the Shipping Gazette™.

“That’s why most companies opt to use between one and three preferred carriers on an ongoing basis.

“TNX — much like Expedia — substantially reduces search costs, allowing access to all carriers without the cost of building hundreds of new business relationships.

“There are 40,000 trucks in New Zealand and TNX, quite simply, finds the optimal/lowest cost one for each shipping job.”

Mr Hoffmann said joining the “smart marketplace” was a free and fairly simple process. Once TNX had promptly run some fundamental company checks, shippers and truck operators were able to post/review jobs through both Web browsers or a smartphone App.

“From a shipper perspective, it is pretty simple, you effectively tell us what you want to accomplish. You may tell us you have 20 pallets of say widgets from Christchurch to Auckland, you have some flexibility on the timing and there are no special needs — and you tell us a maximum price you are willing to pay for that and a walk-away or buy-now price.

“Then it is in our domain. Effectively an algorithm sits in the middle that translates the language of the shipper to the language of the trucker.

“We basically go out and ask the trucker similar questions and either give them a single job, a combination of jobs or they can actually tell us in a structured way what they are willing to do.”

Even allowing for “pretty modest” fees, Mr Hoffmann said shipper users of the service over the past three and- a-half months have on average reported a 10% saving in their shipping costs.

Similarly, he said truck operator members of the service were experiencing greater utilisation of their fleets, which both raised operational efficiency as well as reducing CO² emissions.

“40% of the time a truck you see driving on the road is empty. That’s a horrendous figure. If you can just move this to 30% or 20% you will generate tremendous savings.”

Asked how TNX views its offering against other potentially similar marketplace operators, Mr Hoffmann carefully emphasised that the TNX platform was “not just finding somebody”, but instead finding “the best match between cargo and trucks”.

Mr Hoffmann is satisfied with the growth of the service to date, with towards 50 truck operators and 15 shippers having now joined. He said the platform will progressively receive greater functionality as new developments are rolled out.

Operating via a fairly small team, TNX has also expressed overseas ambitions, with developments being eyed in the United States and Europe.

Coda chief executive Scott Brownlee said his firm is one of the early adopters of the platform.

“TNX helps to remove waste by tapping into spot market opportunities in the transport sector,” he said.

“The simple online digital channel allows us to identify unused capacity that we knew existed in New Zealand’s trucking network, but was previously hard to access. The next step for Coda is to integrate TNX into our own trucking fleet to improve asset utilisation and efficiencies.”

Mr Brownlee added that Coda expected to see greater use of such digitisation in the New Zealand supply chain.

Source: NZ Shipping Gazette

 

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