1. Transforming transport procurement
through the creation of
“A High Value Collaborative
Community”
Brian Bolam
Founder
TGMatrix General presentation 2015
TGMatrix is to Transport/Logistics what Galileo and Amadeus
are to travel, Late Rooms.com and Last Minute.com are to the hotel
industry and UBER & Lyft are to the taxi industry
2. Agenda
Background (the problem)
Need for change
The High Value Collaborative Community (the solution)
Transport in the Internet Age
A view of the future
TGMatrix General presentation 2015
3. TGMatrix General presentation 2015
The Problem :- “uncomfortable truth”
The European transport industry is: “inefficient,
expensive, polluting and living in a pre-internet age”.
Overall truck utilisation is 43%, with trucks empty over 25% of the time
Rail and coastal shipping only used in niche activities
20th Century mentality largely based on combative relationships
European shortage of drivers with an ageing population
Freight industry alone in having failed to reduce carbon footprint
Legislators will act if the Industry doesn’t resolve its own shortcomings.
4. Mode
• Capacity
• Timetables
• Cut-offs
• Efficiencies
C
A
R
R
I
E
R
S
S
H
I
P
P
E
R
S
REQUIREMENTS
THE
MATCHING
ENGINE
Flexibility
• Asset
• Product
Asset
• Availability
• Utilisation
• Size
• Visibility
Product
• Sizes
• Weight
• Compatibility
• Availability
• Consolidation
Proximity
• Empty
Running
• Drivers Hours
• Congestion
• Track ‘n’ Trace
QA
• SLAs
• Connectivity
• Preferred
Partners
• Visibility
TGMatrix General presentation 2015
The Conundrum
<2% NET
PROFIT
PAYING TOO MUCH
FOR TRANSPORT
5. TGMatrix General presentation 2015
Intermodal Collaboration Community
(What problem are we setting out to solve?)
Total UK spend on Freight Transport is circa £35Bn per annum (EU circa €300Bn).
Truck utilisation (time, weight and cube) is 43% compound and 59% (weight only)*
Empty running is 29% and has not reduced for a decade*
The internet and technology driving asset visibility present an opportunity to transform the industry’s
efficiency by matching demand and supply in close to real time using a Matching Engine.
Transport companies are marginal businesses making net margins of circa 2-4%* (2013 top 100
carriers in UK=2%)*. TGMatrix will more than double the rate of return through higher asset utilisation
and drive an opportunity to refresh an ageing fleet with more efficient and cleaner trucks.
Transport procurement processes have remained largely unchanged for decades.
The processes are primarily manual and delegated to relatively junior staff.
Shippers pay the price of this inefficient asset utilisation driving price inflation and reducing their
competitiveness.
* Source-FTA 2013 Logistics Report).
6. TGMatrix General presentation 2015
TGMatrix is an Intermodal Collaboration Community and will provide the capability
to match supply and demand intelligently in the UK freight marketplace across all
modes (road, rail, short sea and coastal shipping).
TGMatrix will launch with the support of shipper and carrier community members
who will provide the critical mass to prime the Matching Engine
TGMatrix will reduce the total number of UK annual road freight movements by 1.5%
(1.5 million road journeys p.a.) and associated carbon emissions by some 250,000
tons p.a. by 2018 through improved asset utilisation and modal shift.
TGMatrix will improve asset utilisation by 10% (a 40% reduction in empty running)
whilst reducing transport costs by 15% (£5.25Bn), and simultaneously reducing CO2e
by 15% and congestion by 15-30%.
TGMatrix will provide 100% visibility utilising a Super-Connected platform (GPS/
TGMatrix Smartphone App)
Shipper Value Proposition ~ 250% return on costs (Circa 15% cost reduction)
Carrier Value Proposition ~ 200% margin improvement (improve asset utilisation by
10%)
(The Value Proposition-Users)
7. TGMatrix Matrix
Highly automated and scalable
Driven by master data
Reduces CO2e by >15%
>75% reduction in admin costs
100% visibility/connectivity
Targets asset optimisation/ROA
Proactive customer service
Carriers QA
Win - Win for shippers and
carriers alike
Targets large outsourcing market
Builds a wide collaborative
community
TGMatrix General presentation 2015
Why is TGMatrix a
breakthrough
Competitors
Highly manual / un-scalable
Principally transactional data
Industry CO2e increasing annually
Admin costs linear with volume
Low levels of visibility/connectivity
Focus on moving freight
Reactive customer service
Often no carrier QA
Shipper pays too much yet carrier
makes low returns
Subcontract is a “black hole”
Limited community restricts options
8. SHIPPER
TGMatrix
Upload
Master
Data (MD)
Send
Demand
Request (TD)
Self-Bill
(Advice)
Claim
Reconciliation
(in Portal)
Seek
Match
(using
MD/TD)
Confirm
Match
(Auto-
Allocate)
Settle
Claim
Settle
Claim
Confirm
Contract
in Shipper
System
POD (Data)
Stored
POD (Data)
Received
Store
Master
Data (MD)
Track
Asset
In Transit
Status/IoD
CARRIER
Upload
Master
Data (MD)
Trip
Events
Updated
Confirm
Contract
In Carrier
System
POD
(Data)
sent to
Portal
Send
Supply
Offer (TD)
Invoice
Settle
Claim
Remittance
Advice
TGMatrix General presentation 2015
The Process Flow
Transport Management in the Internet Age
Self-Bill
(Update)
9. Shipper
15% price reduction
250% return on subscription
100% visibility (track & trace)
>75% reduction in admin cost
Access to dynamic capacity
IOD/POD
Claims management portal
Access to accurate CO2e reporting
data
Route to intermodal solutions
100% EDI connectivity
Access to BI reporting
Carrier
Access to freight volume
15% reduced cost of subcontract
100% visibility (track & trace)
200% margin increase on assets
Access to accurate CO2e reporting data
Claims management portal
100% EDI capability
Access to BI reporting
TGMatrix General presentation 2015
Shipper & Carrier Benefits
TGMatrix is a “High Quality Collaborative Community”
10. TGMatrix vs Freight Exchange
Freight Exchange
Mainly road
Manual Selection
Low visibility
Load matching only
Generally sub-scale
Marginal affect on industry
Mainly a carrier play
Last point of call
Little to no stakeholder QA
Web/manually driven
Manually driven (often subjective)
Opportunistic
TGMatrix
Multi-modal
Auto-allocated
100% visibility
End to end transaction
More effective with volume
Industry transforming
All community members
participate and benefit
First point of call
Community QA
System driven (objective)
Collaborative
TGMatrix General presentation 2015
12. Be part of a “new paradigm in transport”
Help to create a “High Quality Collaborative Community”
Opportunity to secure significant modal shift with TGM acting as a market
aggregator
Find new quality assured subcontractors at little/no cost
Transform your traffic “back office admin” with >75% cost reduction
Enrich your service to clients with lots of close to real time visibility & added
value data
Increase profitability (lower costs, higher asset utilisation, increased revenue)
Increase cash flow (lower DSO from less disputed invoices and SCF)
Retain more business due to stickiness through being “easy to do business with”
Improved image due to more frequent replacement of highly visible assets
(trucks)
Ability to deliver accurate CO2e statistics to customers and shareholders
12
What’s in it for Community Members?
TGMatrix presentation to Alliance Boots, 31st July 2015
13. Passive
Part of a “new collaborative
community”
Seen as an innovator
Part of your CSR mission
Never “knowingly
underutilised”
A good neighbour
13
The Role of Community Members
Active
Provide data during development
phase
Facilitate integration to Community
Members - ERP/TMS/WMS
Commit freight & capacity (where
applicable) to TGM as “preferred
subcontractor”
Complete master data template(s) as
Shipper & Carrier
Provide support/endorsement with
investors/press/other stakeholders
Allow TGM to use Community
Members name (on a pre approval
basis) initially as a launch partner and
later in a case study
TGMatrix presentation to Alliance Boots, 31st July 2015
14. Master data/transactional data + combination
Requirements
Business rules
Preferred carriers/excluded shippers
T&C’s
Rates/calculation algorithm
Message formats
Communication protocol
Network architecture
Intermodal transfer locations
Generic or specific emissions data
Dynamic/fixed traffic/congestion data
14
Requirements Definition
(Shipper & Carrier)
TGMatrix presentation to Alliance Boots, 31st July 2015
15. 15
Agree formal engagement
Shipper and/or carrier?
Agree scope of parallel running (carrier groups, carrier on-boarding.
X reference (master) data , message detail
Agree medium term volumes (subject to acceptance at parallel running)
Secure MIG for integration
Check all messages related data available?
Check alternative data sources for MD/TD (as necessary)
Agree on “secured period”
Integration meeting
Master data template completion + agree special requirements
Integration test
Parallel running tests + evaluation
Go/No go live
Next Steps
TGMatrix presentation to Alliance Boots, 31st July 2015
Our industry has hardly changed since trucks first started carrying freight!
Whilst there have been breakthroughs in such things as pallets and containers- the procurement process has remained largely the same
Those companies who have a specific focus on asset utilisation make a multiple on industry standard returns e.g. Downton Transport-this validates the proposition
The industry is “riding its luck” & will not escape the attention of the legislators for much longer if it fails to demonstrate efforts to put its own house in order with respect to emissions
Notwithstanding current reductions in the cost of fuel, the industry is facing a “capacity crunch” based on congestion at ports, ageing truck drivers and unsustainably low return on assets
The message flow sitting behind the TGMatrix Portal will use the OmPrompt service and will comprise 16 separate messages groups albeit 1 and 2 are periodic, 7 and 8 are multiple, 10 (to the shipper) is to be a look-up and 12/13 are exceptional (assume 2-5%). Basic messages per transaction are 10.