Managing an intricate supply chain requires extensive optimization. However, Gerdau Long Steel North America’s previous transportation management system (TMS) kept falling short in delivering the necessary automation, data, and visibility. Real-time access to data was essential for making informed decisions and maintaining a competitive edge. Gerdau needed the ability to not only track shipments in real time, but also leverage advanced analytics to make proactive decisions.
In response, Gerdau sought to transition to a new next-generation solution, aiming to increase visibility and improve carrier and rate management. This prompted them to search for a TMS that could fully support the next phase of their supply chain evolution.
By Princeton TMX
Global manufacturer Gerdau Long Steel North America (Gerdau) produces a wide range of steel products and operates an extensive network of metal recycling locations, steel mills, and downstream facilities.
The Gerdau division operates six steel mills in the United States and three in Canada, where it produces structural steel, piling, merchant bar, special bar quality, and rebar products. To support its complex freight operations, Gerdau relies on multiple facilities and third-party processors.
The Problem: European-based, Issues-ridden TMS
Gerdau’s operations include a wide range of unique shipping scenarios beyond standard mill shipments. In addition to its nine steel-producing mills, Gerdau also manages a variety of shipments to and from downstream facilities, as well as third-party processor locations not owned by Gerdau. These complex logistics present challenges such as ensuring freight is assigned correctly, configuring the system to recognize non-standard moves, and effectively communicating with carriers.
Gerdau’s legacy TMS presented communication issues, development roadblocks, and functionality gaps. The TMS was not capturing the necessary data that would help the organization move its overall supply chain operations forward into the future. Some of the issues they faced included the following:
- Features and functionality gaps: The TMS had limited features and functionality, which hindered Gerdau’s ability to meet evolving business demands. Critical workflows lacked automation, and key features necessary for streamlined operations were either missing or underdeveloped.
- Manual processes for communication: Gerdau manages unique shipping scenarios across various facilities, including steel mills, downstream non-production sites, and third-party processors. Due to data limitations, the team had to manage certain shipments manually via email. This process involved manually contacting or emailing carriers for rates, load pickups, and confirmations, leading to inefficiencies.
- Growing volume of manual interventions: While manual processes initially impacted a small portion of operations, the number of cases requiring manual handling was increasing, highlighting the system’s inability to scale with growing business needs.
- Lack of communication and limited customer support: The legacy TMS was based in Europe, resulting in constant communication delays and a lack of a true support system. Emails were often the primary mode of communication, and live calls with the support team were rare. It took years before Gerdau secured a U.S. point of contact.
When processes often required team members to manually reach out to carriers with messages followed by confirmation and invoice requests, it was obvious that something needed to change. The volume of these manual cases was also steadily increasing—and the limitations of the legacy TMS underscored an urgent need for a modernized solution that could support digitalization, improve data accessibility, and enhance carrier and rate management.
The Solution: Greater Visibility and Automation
With the new TMS from Princeton TMX, Gerdau has already realized several efficiencies and improvements in KPIs across the board. “It has been amazing for visibility,” said Gerdau’s Freight Manager. “The system allows us to almost instantly troubleshoot any load issues ourselves internally, easier than before.”
The introduction of in-transit visibility significantly improved Gerdau’s operations. Previously, Gerdau lacked insight and visibility into its carrier base. The new TMS helps provide immediate benefits by enabling them to establish accurate delivery windows for each load and quickly select the best carrier at competitive rates.
Real-time data tracking provides immediate visibility into their supply chain operations, enabling swift decision-making. This visibility allows them to monitor their supply chains as events unfold, leading to faster response times, reduced downtime, and improved operational efficiency.
Gerdau was also able to create new formulas for delivery reporting in collaboration with the Princeton TMX team. In the past, they had assigned a delivery window and two dates on a shipment — “earliest” and “latest” — but with the new TMS, they can assign a “planned” delivery date for each load. The carriers were incredibly receptive to this change.
The TMS also eliminated the problem where some Gerdau users direct or single tendered loads out to some carriers without a rate in the system to pay the carrier. At times, loads were not being matched to any rate, rates were not being negotiated or priced out appropriately, and carriers were not being paid for these loads on time.
This was especially difficult for Canadian-based carriers, as there had previously been many issues due to differing taxes, accessorials, rates, currency conversions, and fuel surcharges from one country to another. Frequent discrepancies often resulted in mismatched rate confirmations; for example, a load might show a $1,000 rate, while the true cost was $1,500. The legacy system could not accurately manage these differences, frustrating both carriers and internal teams.
The Canadian carriers quickly adapted to the new system—with the new level of transparency, carriers can now see exactly how their rates are calculated and cross-check them against their expectations. This allows both parties to make the necessary corrections early in the process in the case of an error, significantly reducing confusion and disputes.
A Better Relationship with Gerdau’s Carrier Base
Previously, Gerdau lacked insight and visibility into its carrier base, causing a host of miscommunication and problems. The new TMS provides immediate benefits by allowing accurate delivery windows for each load and enabling quick selection of the best carrier at competitive rates.
Behind the Scenes: How Gerdau Vetted Its New TMS Provider
To select a new TMS provider, Gerdau assembled an internal team to rigorously evaluate options through demos and trials. The team included key stakeholders and mill representatives who took part in each step of the vendor evaluations.
From the initial vetting stage, Gerdau received a unique level of hands-on support and a go-to dedicated, responsive contact who understood Gerdau’s operations. This engagement, coupled with the adaptable platform, set the stage for a more streamlined and efficient transportation management process.
Princeton TMX offered a high level of collaboration that was offered by the team. Weekly meetings with Princeton’s team ensured consistent progress, with Gerdau’s primary contact providing thorough follow-ups and attention to detail. This approach enabled Princeton TMX to configure the system specifically to Gerdau’s unique business needs.
“The new TMS has greatly enhanced our visibility across the supply chain, simplifying complex information while offering more data than we have ever had. I honestly do not know how we operated so long without it,” said the freight manager.
Day-to-day Operational Example
Previously, once a load entered the system and was checked in at a mill, it would disappear from the work queue of pending shipments. But after it was marked as loaded, Gerdau had no additional visibility into its status or work queues to track whether the load had been delivered within its old system.
The in-transit tracking feature within the new TMS has provided an enhanced level of visibility, allowing Gerdau to monitor shipments more effectively, giving carriers new visibility of their rates, breaking things down more simply, and providing information that had been missing in the past.
Today, if a contracted rate does not exist for a carrier, the mills cannot tender a load to that carrier unless they enter a spot rate. “The system has been immensely helpful for payment efficiency to carriers, and the work queues give us the visibility we need,” said Gerdau.
This has sparked interest across various departments within Gerdau, with additional team members frequently asking how to access and view specific information. The sales team has also expressed interest in utilizing data within the new TMS to gain a better understanding of operational processes.
The Data: How Gerdau Can Put Their Data to Work
Princeton TMX’s platform is designed to give Gerdau the insights they need to optimize their transportation operations. The combination of real-time reporting and AI-driven prescriptive analytics provides actionable insights that drive efficiency and reduce costs.
- Real-time dashboards: Access real-time data on shipment status, carrier performance, costs, and more. The dashboards provide immediate visibility into transportation operations.
- AI-driven recommendations: The system uses AI and machine learning to continuously analyze data and provide actionable recommendations, helping logistics teams make smarter, faster decisions.
- Customizable KPIs: Track the metrics that matter most to your business, from fuel efficiency to delivery times. Users can customize KPIs based on their specific needs.
- Automated reporting: Generate and distribute reports automatically, providing stakeholders with real-time insights into transportation performance.
The Future: Additional Beneficial TMS Features
Gerdau initially adopted Princeton TMX’s system for its improved load visibility, data, and reporting features but quickly discovered and added other powerful capabilities that are helping to reshape their operational processes into the future.
Feedback from the team highlighted opportunities to enhance the load-scheduling module, especially to address specific needs across their loading facilities, from loaders to security personnel. Gerdau and Princeton TMX collaborated closely to refine this module, implementing major updates based on location-specific user requests.
“The team really goes above and beyond, whether it is creating solutions to problems we bring them or proactively bringing us new solutions, opportunities or strategies they have worked on with other customers that could benefit us,” Gerdau said. “They are helping make our supply chain more strategic and data-driven. We have folks across our business asking to see the data that our TMS is showing us—it is that valuable across our entire organization.”