Here's a new acronym for you — EFM. It stands for “electronic freight management,” which is a fairly innocuous sounding term. But if the U.S. Dept of Transportation and Federal Highway Administration are right, it's going to change the way you do business with shippers, 3PLs, freight forwarders, customs brokers and every other party that touches the supply chain. And unlike EDI, it will be used by all partners in that chain whether they're a five-truck fleet or a multibillion-dollar retail giant.
EFM is an open system that was developed with sponsorship from DOT to allow everyone in the supply chain to share data easily and inexpensively. It is web-based and uses a common data standard called XML, so even the smallest business can participate with just Internet access to a web portal.
Currently, large players in the logistics market use EDI to handle this data, which requires a substantial investment in information technology as well as transaction or network fees, but smaller companies without their resources still rely on email, fax or telephone. And that carries a cost for everyone, since data must be reentered or handled multiple times for a single movement.
As DOT sees it, the alternative they've helped develop will bring significant productivity improvements to the entire freight distribution network, truck fleets included. How much? Well, one participant in a demonstration project said it shortened access to real-time shipment status by as much as 48 hrs. and cost a third to one-half as much as a traditional EDI system to set up.
The demonstration involved international air freight, but it's easy to draw conclusions about what EFM could mean for purely domestic moves as well. Since data only had to be entered once and could then be shared by all partners, it reduced tendering time for shippers by 75%, shortened movement planning cycles for forwarders by a day, reduced errors at the transshipment points, and improved the flow of freight at distribution centers. Brokers were able to process almost 20% more shipments each week, improved visibility helped avoid problems with delayed shipments, and everyone involved received advanced shipment notices, not just those with the resources to support EDI.
DOT is excited about EFM because it believes broad, inexpensive access to accurate shipment data will bring much needed new efficiencies to our supply chain. As a truck fleet manager, you should be excited about this newest addition to the IT alphabet soup because it should give you all the benefits of EDI at a substantially lower cost. In fact, DOT believes that the low cost of EFM will be the real key to its success since it will make electronic data exchange practical for everyone, which in turn will greatly improve the accuracy, timeliness and value of that data.
Judging its first demonstration of EFM a success, DOT has begun a second test with a company in Kansas City handling inbound ocean containers. Domestic intermodal and truckload tests are sure to follow.
You can go to www.efm.us.com to find more information on EFM or to download free software components to set up an EFM server. This is one acronym it will pay to track closely.
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