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January 17, 2019

XPO Logistics reduced transport downtime and expanded freight volume owing to 1С:Transport Logistics, Freight Forwarding and Motor Fleet Management CORP system

The system enables real-time calculation of more than 3,000 complex tariffs for a wide array of transportation services, improved route planning and optimized transport loading. Transport downtime has reduced by 13%, and empty trips – by 8%. Freight orders have gone up by 12%, and the number of trips — by 27%, respectively.

XPO Logistics is a top-10 global logistics company, headquartered in the USA and employing more than 98,000 people. Its Russian operations are centered around an office in Moscow and 9 regional sites In Russia, the company manages its own fleet of 210 heavy-duty tracks, and also cooperates with some 300 thirdparty transport operators.

Until 2015, XPO Logistics specialized on full truck load (FTL) services, when the customer rented the whole truck. Since 2015, the company has moved into the new sector — combining shipments from multiple customers (LTL — less than truck load). This helped to expand the customer base with companies such as Danone, Auchan, Metro C&C and other retailers with geographically dispersed stores. The number of orders has gone up accordingly. Today, the company receives more than 8,700 orders and more than 3,750 trips are made per month.

To boost the company’s efficiency, XPO Logistics needed a business system that would ensure careful calculation of transportation prime cost on the planning stage, help control deviation from the route and enable online communications with drivers and freight senders and recipients. Being a large international logistics player incorporated in the USA, the company needed the new system to be compatible with the SOX (Sarbanes-Oxley Act, USA) requirements for operating and financial reporting. Besides, it had to be integrated with the IT solutions from 1C already employed by XPO Logistics: 1C:Payroll and HR Management 8, 1С:Workflow 8, and 1С:ERP Enterprise Management 8.

The new system was rolled out on 370 work stations in transportation services, transport operations, financial analysis, HR, and customer complaints departments.

Key results

  • Automated calculation of more than 3,000 complex tariffs for a wide array of transportation services, both for customers and contractors. This allowed to fully eliminate the human factor in pricing and reduce error rate. Order processing rates have imported, and so have the risks of unauthorized payments, as strict control is now maintained over invoices issued by contractors. Total number of tariffs has augmented by 7%, while revenue has gone up 12%, which proves the efficiency of the new transportation services.

  • Target prime cost of transportation services can be calculated on the stage of trips planning. This allows for optimized assignments of vehicles to orders and helps to improve cost-effectiveness of transportation services.

  • Streamlined business processes in transportation services and transport operations departments. The staff of transportation services department (more than 70 users across the regional offices) can now spend less time on route planning and assignment of drivers and vehicles. As a result, transport downtime has reduced by 13%, and empty trips — by 8%. At the same time, freight orders received have gone up by 12%, and the number of trips — by 27%, respectively.

  • The office now has online communication with drivers. The assignments can be delivered to drivers by SMS notifications. This allows controlling drivers in the field and promptly responding to any extraordinary situation — road accidents, forced deviation from route, vehicle replacement.

  • Customers also can have access to the information system 1C:Transport Logistics, Freight Forwarding and Motor Fleet Management CORP: they can upload the application for freight services, monitor its process, and draw up related reporting.

  • Automated recognition of income and expenditure by type of services, including multi-mode orders. Income is now calculated for the complete transportation chain, without splitting it into separate legs, while expenditure is registered for each separate leg of the route. This allows breaking the financial figures of every trip down to every leg, route, and vehicle.

  • Compliance of the company’s business processes to the SOX requirements in terms of the assignment of access privileges. Audit conducted has showed that 1C:Transport Logistics, Freight Forwarding and Motor Fleet Management CORP fully satisfies the SOX requirements: assignment of access privileges means that only the employees responsible for the specific area of work will have access to the corresponding data, which allows preventing unauthorized access to restricted information or information beyond an employee’s job  duties.

  • Integration of 1C:Transport Logistics, Freight Forwarding and Motor Fleet Management CORP with other business systems employed by the company helped to optimize accounting and financial operations: it has enabled precise calculation of financial impact, reduced paperflow and accelerated closure of reporting periods. Among other, it became possible owing to changes in the moment of recording of the contingent profit and loss — previously, the contingent profit and loss was recorded at the moment of loading the truck, whereas now, it is the moment of unloading the truck.

Daria Sementsova
Automation team leader for XPO Logistics about cooperation with 1C-Rarus

"We are satisfied with our cooperation with 1C‑Rarus! Our colleagues dove into the specifics of our business and were never intimidated by the amount of reengineering and modifications that occurred throughout the project, they accommodated all our requirements. Our cooperation continues, we have entrusted 1C‑Rarus with technical support and maintenance of the implemented solution."

Vladimir Morozov
Project manager, XPO Logistics

"We are going to further enhance the system, fine-tuning the details. The initial period has showed that we are on the right track, there is a really great tool at our disposal. We will gladly pursue our collaboration with 1C‑Rarus."

Marina Bolshakova
CIO of XPO Logistics

"The new system has given us real-time business information. The management team can compare services in terms of their profitability and costs per km to develop a carefully-weight strategy for the future. With precise and visual data at hand, they can select the most lucrative lines of work and forecast financial revenues. We have plans to enhance 1C:Transport Logistics, Freight Forwarding and Motor Fleet Management CORP and add new functions to it."

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