Success for small and mid-sized firms often comes down to being able to go where your customers take you. This is as true for a software firm as it is for a 3PL. This can also include dropping existing business services when necessary, while nimbly growing new service lines. Dispatch Science, a firm providing a transportation management system, fits this description. So does Pace USA, a third-party logistics firm. It is not too surprising that Pace now uses Dispatch Sciences’ TMS software.

Dispatch Science’s Journey

Dispatch Science, headquartered in Montreal, started in 2013 during the mobile app craze. “Those were the days of Angry Birds and apps in an App Store,” Arthur Axelrad, the CEO of Dispatch Science, explained. “And we’ve done that.”

“We’ve built a number of apps for several years, and by a little bit of luck – and by virtue of some projects for the likes of McKesson and Choice Logistics and National Express – we’ve built some competency and skill in transportation logistics.”

This domain knowledge allowed them to build software for a courier company. Courier logistics usually involves the same-day transport of documents, packages, and sensitive items from one location to another. Couriers use cars, bikes, and even people on foot to make these deliveries.

“I had a great, great experience with this client,” Mr. Axelrad said, “They introduced us to the business problem of ‘dispatching.’” When it comes to dispatching couriers, nothing is known in advance. “The phone would ring, the email would come in, and dispatch would try to juggle all these calls and figure out which delivery would be dispatched to which driver in the field. So we looked at it and said, ‘there’s got to be a way that algorithms can solve this problem better than humans.’ So, we took a crack at that problem and developed our own algorithms to automate dispatch.”

This is a narrow niche. But in this little industry built on speed, you have carriers that provide multiple services. This can include hotshot freight deliveries, e-commerce, and dynamic distribution.

Dynamic distribution or retail redistribution is perhaps the most complex of the expedited services. Retail redistribution involves receiving shipments from large retailers at a regional warehouse operated by a 3PL. The retailer’s pallets are destined for several of their stores. Warehouse workers then ‘break bulk.’ The warehouse workers unload the truck, break down the pallets, group parcels bound for the same store, rebuild store-specific pallets, and then load those pallets onto trucks that will make the ‘final mile’ delivery to a designated store.

The Dispatch Science system receives information on a load. Floor personnel scan every parcel as it comes off the trailer or box truck. The system tells the worker, “This parcel belongs to route seven, sequence nine. This parcel goes to route twelve, sequence two.” The worker is directed to take grouped parcels to a designated staging area on the warehouse floor. From there, those parcels on the same route can be loaded onto an outbound truck in last-in, first-out order. Packages are scanned off the truck for proof-of-delivery and to mark a change in custody. GPS provides for real-time location data on deliveries.

Finally, a comprehensive TMS also needs a rating and pricing engine. Transportation pricing can be incredibly complex, depending on mileage, wait times, and the value-added services provided.

These local and regional firms will operate a fleet that ranges from humans (for example, for couriers in a place like Manhattan) to bike messengers up to 53-foot trailers. The TMS supports all those modes.

These small and mid-sized, multiservice line firms have complex needs they seek to solve with a single piece of software. They are looking for a system to manage various delivery types while respecting the specific requirements of their customers’ industry. Medical deliveries, for example, may require special handling for hazardous materials. Retailers and manufacturers can have narrow pickup and delivery windows, as well as rules about where drivers are expected to wait while a dock opens up.

While traditional TMS solutions are largely focused on optimizing around scheduled pickups and deliveries, Dispatch Science uses constraint-based programming to solve the tricky dynamic routing problem. But this multi-tenant, cloud-native software product also evolved over the years to support a broader set of client needs. In short, by listening to customers, the Dispatch Science solution became a comprehensive TMS for local and regional carriers with multiple types of expedited shipments.

Pace USA, an Entrepreneurial 3PL

Patrick McCarty is the director of business intelligence at Pace USA. This firm is headquartered in Birmingham, Alabama, and generates roughly $100 million in annual revenues. Mr. McCarty refers to Pace as a “26-year-old startup. We were heavily into e-commerce in the late teens.” But competition in this line of business was getting much tougher. While this business line was not going away, it would not sustain them at the same level.

Pace, like many of Dispatch Science’s customers, offers a range of transportation services, including courier and e-commerce final mile. But as the e-commerce business grew more competitive, the 3PL began exploring retail redistribution in 2018. This is now their largest business line.

Atlanta is one of Pace’s larger redistribution facilities. This 74,000-square-foot warehouse has 15 dock doors. It handles an average of 40,000 parcels per week. Pace has 7 other pool points across the Southeast. The company employs over 200 workers in its warehouses.

Pace owns a few trucks and employs few drivers. Occasionally, they will broker out a load. But most of their drivers are independent operators with whom they have a Master Service Agreement – a long-term contract that sets the terms and a legal framework for future transactions. 1500 drivers work with Pace.

To support dynamic distribution, Pace also needed to move away from a legacy solution with technical debt and functionality gaps.

Pace Selects Dispatch Science

Pace selected Dispatch Science as its new logistics solution. One of the key features that led them to select Dispatch Science was geofencing. With geofencing, the 3PL knows exactly when a truck arrives at a customer site. Their mobile app, which relied on drivers reporting their arrival, proved only partially accurate. Mr. McCarty pointed out that the inaccuracies were not always due to “shady” driver behavior. In some cases, drivers would arrive home at night after not closing out any events, then attempt to accurately enter all the day’s data at once.

Accurate arrival data led to better customer service. “Customers became more needy for their data points, more needy for their real-time information about what’s happening to the delivery,” Mr. McCarty said. Delivery status and driver ETA notifications are now automatically sent to customers.

Pace is committed to customer service. The firm has a secondary call center that they call ‘Overwatch.’ The personnel working there use Dispatch Science to make sure drivers are not running behind. For those running behind, they reach out to see what’s putting a delivery at risk and enter the relevant exception code into the application.

The driver app improves service. The mobile app assists drivers in meeting customer-specific requirements, including signature capture and photo documentation of the condition of the goods upon arrival.

Mr. McCarty likes the application’s flexibility. “One of the cool things about the Dispatch Science mobile app is the ability to build in workflows. If a particular customer stop doesn’t require photos, it’s not going to prompt the driver for a photo.” If a stop requires a photo, the app won’t let the driver report that all procedures have been followed and that the stop is complete until the photos have been taken.

Mr. McCarty read a book called The Design of Everyday Things. This book explained that there are two types of knowledge. There is tribal knowledge. This is the knowledge a driver has internalized, as well as what the driver has been told to do and needs to remember. Then there’s external knowledge. “And this mobile app, and its platform, is definitely leading the charge on the external knowledge front. So, now I don’t have to rely on a perfect training plan. I don’t have to rely upon a driver remembering all the steps. When the driver gets there, their mobile app is going to walk them through it.”

As the Sales team engages customers, they’re learning about the problems customers are trying to solve and the requirements Pace must support to be successful with that client. Part of the IT team supports sales. They build the necessary steps and workflows into the mobile app. If there are specific requirements not included out of the box, Dispatch Science is flexible enough to add scripts to support those steps.

Pace believed that better service would lead to more business. “We definitely made sales since shifting to Dispatch Science that I don’t think we could have made with other solutions. Or, if that’s too heavy-handed, I would say I wouldn’t feel comfortable that we’d be able to service the customer at the level they wanted.”

That has turned out to be right. When they put the system in, they were making 4,000 stops a day. Today, the 3PL is up to 8,000. While order throughput has doubled, staffing has increased only minimally.

Better delivery data also leads to more accurate cost data, letting Pace better understand true profitability by route and customer.

What’s next? The 3PL is taking a close look at Dispatch Science’s routing functionality.