The Sylectus network enables small carriers to offer their customers the same national and international reach, and almost all of the same services that the largest expedite carriers do.
If you stood on a
freeway overpass in Ohio for a month and counted the expediter trucks
that drove by, you would see thousands of trucks leased to hundreds of
carriers. With your count you could easily identify the big names in
expediting, but from your vantage point on the bridge you would not see
the Sylectus network to which the majority of the expediter trucks on
the road are connected.
Hidden in the outwardly unrelated mix of “off-brand” expediter trucks is a cooperating group of hundreds of expedite carriers that use the Sylectus network and software to share trucks and loads. They form a 10,000 truck virtual fleet that by truck count is many times larger than the largest expedite carrier.
Strength in Numbers
The Sylectus network enables small carriers to offer their customers the same national and international reach, and almost all of the same services that the largest expedite carriers do. A 20 truck carrier, for example, might serve a group of customers in the Midwest. It can cover a maximum of 20 loads with its trucks at the same time. By plugging into the Sylectus network and thereby gaining access to nearly 10,000 trucks, that same carrier can say yes to a customer who calls with the need to ship 30 loads tomorrow going to various locations in Canada, Mexico and the U.S.
Few of these small carriers use Sylectus for the majority of their business. Most have customer bases and truck fleets that have been developed over time. The Sylectus network usually comes into play when a carrier is unable to meet a customer need with its own trucks or when it has a truck sitting and no freight to put on it.
When they find themselves in such circumstances or are presented with new opportunities to serve new customers, member carriers tap into the resources their fellow network members offer. Sylectus calls it strength in numbers and illustrates the concept with the graphic shown here.
Individually, each member is an insignificant competitive threat to the large expedite carriers. But when the small carriers share a common purpose and work together, the competitive advantage large carriers have is challenged.
While these small-carrier trucks sometimes lack the glitz and glitter of the trucks that sport big-carrier graphics, they are dispatched by tech-savvy people using Sylectus transportation management software. The network is composed of the member carriers. The software is the tool used to plug in and communicate with each other, and to dispatch their own trucks and run their back office.
Loads and trucks are not posted on a public load board for drivers or load board subscribers to see. They appear only on the screens of Sylectus networked carriers, and only then on the screens of members that a posting carrier approves.
When two carriers work out a deal to put one member’s freight on another member’s truck, the information is transmitted with two mouse clicks. The first click moves the appropriate information from one carrier to another. The second click moves the run information to the truck. That truck’s location and status is visible in real time to the carrier that originated the load. To the shipper, it is as if the carrier the customer first called is dispatching the truck and providing updates.
When one carrier uses another to meet a customer need, the shipper who ordered a truck from Carrier A will see a truck arrive from Carrier B. The potential confusion is eliminated ahead of time when Carrier A gets the shipper’s permission to use one of their “partner carriers” as they are called in the Sylectus community.
Web Based System
The process is instantaneous, seamless and fully integrated because both carriers use the same software. The system is web based, meaning that the servers reside not in carrier offices but in “the cloud.” If a carrier’s computers all crashed at once, the carrier could recover as soon as the computers were replaced or brought back online and the network connection was restored.
Sylectus replaces the IT departments that larger carriers maintain in house. With Sylectus receiving development ideas from hundreds of cooperating carriers, an individual carrier gets a software package that has been deeply thought out and is continually refined. Updates do not have to be installed at carrier sites by IT department employees. Sylectus updates the system in the cloud.
There is much more to the software than what is described here. Carriers subscribe to the software at different levels. Some have paid Sylectus to develop carrier-specific, custom programs that run on top of the core program. Some use the software as a full-fledged transportation management system. Some subscribe at a minimal level and use only a few features.
Trust Based System
When Carrier A sends a truck from Carrier B to service Carrier A’s customer, the risk exists that Carrier B might try to make that newly identified customer his or her own for future business. That is called back solicitation in the Sylectus community and it is frowned upon. The mechanism that discourages back solicitation is not a strong penalty or something built into the software. Back solicitation is minimized because the networked carriers trust each other to not do it.
The high level of trust that exists in the Sylectus community is remarkable for a business organization in which the carriers that work together are also competitors. Expedite NOW covered the Sylectus annual conference in Orlando in February and interviewed a number of carrier CEO’s. To a person, they said the Sylectus software is merely a tool and that trust is what makes the system work. Several CEO’s told stories about people who subscribed to the software but failed to grasp the importance of building business relationships and trust. The system did not work for those people and they gave up on the product.
Sylectus-networked carriers trust each other to make to make them look good when servicing each other’s customers. They trust each other to not back solicit each other’s customers. And they trust each other to pay and be paid.
At the conference Harry J. Zoccoli III, CEO of The Outbound Group, explained how it works. He gestured toward a large group of people who were mixing and mingling in a reception room and said, “Meet the people. Do some business with each other. Learn what they’re all about. Build the trust. That’s the key.” John Elliott, CEO and president of Load One said, “A big part of the conference is relationship building….Relationships are everything. … It’s always different to do business with somebody that you’ve met.”
The warm trust these small carriers place in each other translates into cold cash and big business. Sylectus president Stu Sutton announced at the conference that 220,000 loads were posted in the Sylectus system in 2011, and 3.5 million truck searches were done.
However, posted loads do not tell the whole story. Many carrier-to-carrier deals are done without the loads being posted. One carrier may see another carrier’s truck in the system, contact that known and trusted carrier directly and book that truck without posting the load.
About 20 percent of Sylectus subscribers are Pro Level subscribers. Sylectus is able to track the revenue of those companies. In the last six years, the average total annual revenue growth of Sylectus Pro Level subscribers was 20 percent. That growth rate is greater than a major expedite carrier that Sutton declined to name and greater than the companies on the Transport Topics 100 For Hire Carriers list. The combined annual revenue of Sylectus Pro subscribers tops $500 million.
The close business relationship Sylectus has with hundreds of expedite carriers gives the company unique insights into the expediting industry. The company publishes a free monthly newsletter, Syleconomics, in which business indicators from the Sylectus transportation management system are published and analyzed. It can be read on the Sylectus.com web site.
To learn more about Sylectus, visit their website