Q&A: Reaching for the skies
Isabel Lesto | Tuesday, 31 July 2012
Terri Sandine from Phoenix International tells Isabel Lesto why this US forwarder has embraced cloud computing
Why have you opted for the cloud?
This really should be the way to go for a company like ours. The economy has changed and many of the bigger customers are demanding more than just moving cargo. Transporting cargo and providing ship rates is not enough anymore to stay in business. Customers want us to integrate with their supply chain management systems and help manage the whole process from the moment they place purchase orders all the way to when cargo is delivered to the end consumers.
We are not software companies, so trying to deploy software in-house to support many customers is very difficult to manage, and very expensive. Our profit margins are so low it’s impossible to try and develop solutions in-house that will help us stay competitive.
How did you decide which cloud vendor to go with?
A couple of big customers came to us and said we would have to use GT Nexus if they were to continue doing business with us. They were hosting a lot of information on that cloud and it would have been too difficult to create a whole new standard and new procedures just to be able to exchange information with us.
But we didn’t choose GT Nexus just because of a couple of customers of course. We did a lot of study. It is one of the best companies out there. Most of the people working at GT come from different backgrounds including freight forwarding, manufacturing and retail, so they have experience in many different areas.
It also provides flexibility. There are too many vendors that give you a package and tell you that you have to use this and that in order for them to be able to provide you with a cloud solution. With most vendors the applications are so intertwined that you cannot just take one solution. Small forwarders and companies cannot afford that.
What are you using the cloud for?
Phoenix International is using the UBDT (Universal Booking Documentation Tracking) solution offered by GT Nexus. This has helped us to centralise all of our connections with shipping lines. By moving the tracking of container activities into the cloud Phoenix is able to save time, resources and in turn make better use of our technical resources and focus on other areas of the business.
What happens when you eventually want to use the cloud for other things?
If we were to use GT for purchase order management or vendor services it would require us to make 15,000 customers aware that their information would be exchanged with a third party. It will be a big undertaking. Are we considering doing that? Sometime in the future, yes.
Do you think your customers will be happy to jump onto the cloud?
Probably half of our very sophisticated customers wouldn’t have a problem with it. In fact a couple of them have already been asking us when we are going to move onto the cloud because they are already using it for a lot of their transportation management services.
Isn’t there a risk associated with being on a cloud?
Yes. This is one of the reasons we have taken the approach of not moving everything to the cloud. You are relying on vendors to secure your data. The biggest risk is if these companies go out of business and you are relying on them to take care of all of your data. How are you going to stay in business if you are relying on these companies to keep you going?
There is still some time for us to really make that decision and move everything to the cloud.
Do you see things moving in that direction?
It’s happening, look at Facebook, and Apple; Apple is moving everything to the cloud. I have all my Apple devices on the cloud so if it ever goes out of business, which I really don’t see happening in the near future, then all my data is gone – but that’s a risk that you take.
I think eventually companies are going to have to determine that they cannot afford to manage big amounts of data, to secure it and have recovery solutions, and still stay in business. For freight forwarders and trucking companies, there’s not enough money to keep up with that.
Some forwarders might argue that they don’t need to be on a cloud
Possibly not now, but a lot of kids coming out of college belong to the ‘Apple generation’. They are very comfortable with it and they are going to be our leaders later on. It’s going to take some time, but I wouldn’t be surprised if in 10 to15 years’ time we have quite a few companies in our sector doing that.
If you would like to comment on this story or any other, contact us at [email protected]
The closing date for entries in the Global Freight Awards (formerly the IFW Awards) is approaching.
Why not enter your company for the Innovation Award?