Case Study

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Werner Enterprises Sees Green Light for Growth in China

Industry Focus

Global transportation and supply chain management

Size

More than 8,800 tractors, 25,000 trailers, and 14,000 employees and independent contractors; over $2 billion in annual revenue

Networking Solution

Ultra-reliable trans-Pacific Multiprotocol Label Switching (MPLS)-based IP VPN connects U.S. headquarters with expanding operations

Business Value

Accelerate growth into new global markets; support customers’ needs for near real-time information

About Our Customer

Werner Enterprises, Inc. is a premier transportation and logistics company with coverage throughout the U.S., Canada, Mexico and China. Werner is among the five largest truckload carriers in the U.S. and number three in cross border trucking into Mexico. Its portfolio includes freight management, truck brokerage, inter-modal, load/mode and network optimization and freight forwarding.

Situation

Trucking leader Werner Enterprises has quickly expanded from over-the-road trucking within the U.S. into global logistics management. Successful in Canada and Mexico, Werner sees continued international growth — particularly in the fast growing market in China — as its next big opportunity. Eager to take advantage of changing regulations, the new Werner Global Logistics division needed to rapidly and reliably leverage its logistics expertise and the IT infrastructure.Werner Enterprises, Inc. is a premier transportation and logistics company with coverage throughout the U.S., Canada, Mexico and China. Werner is among the five largest truckload carriers in the U.S. and number three in cross border trucking into Mexico. Its portfolio includes freight management, truck brokerage, inter-modal, load/mode and network optimization and freight forwarding.

Solution

To support its global logistics management business, Werner uses an MPLS-based IP VPN solution that links its Shanghai operations center to its U.S. headquarters and data center. The network enables Werner to take advantage of load-management systems hosted at its headquarters to drive global growth. Converging Voice over IP (VoIP) over the same network cost-effectively enhances its communications. The strategy is working: Werner now serves more than 35 global customers in China, Latin America, the European Union and Africa.

A Search for New Opportunities

From its start with a single truck in 1956, Werner Enterprises and its founder, C. L. Werner, have written a remarkable story of entrepreneurial achievement. Werner’s emergence as a public company in 1986 spurred the company’s growth from a fleet of 630 trucks to more than eight thousand. Today Werner is one of the largest U.S. carriers, directing a sophisticated freight and supply chain management business from its headquarters in Omaha, Nebraska.

Werner’s eagerness to use state-of-the-art technology has supported its rapid growth. In 1992 Werner became a pioneer in using satellite technology to locate and communicate with its trucks in real time. Later Werner became the first truck carrier authorized by the Federal Highway Administration to use paperless driver logs. When customers asked for detailed, up to the second information on shipments, Werner created its own software. When they sought a turnkey solution for worldwide shipping and warehousing, the company started the Werner Global Logistics division.

“One of the keys to our success has been our willingness to be one of the first companies to go after new services, whether it’s logistics or a dedicated fleet, our Mexico Division or now our China offering,” said Craig Stoffel, Vice President Value Added Services & International. “We’ve not been shy about solving problems for our customers.”

Werner’s leaders knew continued growth demanded expansion to fast-growing markets outside the U.S. In 2000 the company expanded its business in Canada and launched operations in Mexico. The following year Werner opened an international terminal in Laredo, Texas. Led by General Manager Juan Bautista, Werner focused on establishing strong relationships with its customers in Mexico, and the business there is prospering.

The next area that the company targeted was China and as soon as the legal doorway opened, Werner raced through. In December 2005, Chinese regulations changed, allowing wholly-owned foreign entities to be set up for logistics and freight forwarding for the first time. The first permits were issued in April 2006, and Werner was the ninth company worldwide and first from North America to be licensed in Shanghai. Since then it has added its Chinese Non-Vessel Operating Common Carrier (NVOCC) license. Its legal status gives Werner the flexibility to operate independently or work with local partners. Werner does both.

Building on Strong Relationships and Hard Data

Werner decided to build its China business with the same formula that worked so well in Mexico: Develop strong local relationships with partners and customers, and reinforce those ties by providing the brand of outstanding service that has made Werner so successful. Werner named Bautista as General Manager of China. “If you have good relationships and networks in China or in Mexico, you can do business,” Bautista said. “We have been very blessed to have partners that have been helping us in how to set up a company and how to do business over here. As in Mexico, we have to adapt to China.”

“There’s an appetite for our tools and methodology in the China market,” Stoffel added. “We see a very large opportunity to connect China inland expertise across the ocean to the expertise we have in North America. There are a lot of companies that are good on one end or the other but not really good at both.”

Breaking into a new market puts a premium on performance. “There’s a lot of trust involved when you change your freight forwarder. We recognize that,” said Stoffel. “Although we may be one of the most widely-known carriers and logistics providers in the U.S. and in Mexico, we’re still a relatively new kid on the block in China.” Werner has to convince new customers it can handle the job, and its use of information technology is key.

One Werner advantage is the logistics management software the company has developed. “Our technology really scales to meet a customer or a carrier where they are technologically,” said Anthony DeCanti, Vice President Analysis and Information Systems. “For example, we have an email-based EDI (electronic data interchange) system that allows carriers to participate with us without an IT staff or an EDI system. Our system automatically sends them an email; they accept or reject the load or give us a status update via email. In Mexico and China where EDI isn’t as common, that’s proven to be invaluable right out of the box.”

A Networking Advantage

Werner can integrate its information systems with any used by its customers and partners, to ensure all have data when and where they need it. Online analytical processing (OLAP) tools let customers drill in and understand logistics performance. State-of-the-art systems even track shipping cost adjustments en-route, enabling shippers to bill for actual costs the moment goods are delivered. And customers are learning to expect no less. “The bar has been raised so high — everyone expects real-time messaging, instant messaging and location updates at their fingertips,” Stoffel said. “We’ve really solved that problem in North America. We’re hoping as we continue to integrate with the different providers on the ocean and on the ground in other countries that our network will deliver that same degree of instant visibility in places where it’s never been done before.”

Value Added Services & International

As Werner rolls into the China market, the network is proving vital. IP VPN services connect Werner’s operations with the IT center in Omaha, enabling Werner to store and process information there without investing in new servers. VoIP travels over the same circuit. “VoIP gives us the ability to tie ourselves back to the corporate office and gives an ease of access between the Asian headquarters and our global headquarters,” said Eric Salverson, Assistant Director Analysis and Information Systems. “We’re leveraging the data circuit to move our global supply chain data, as well as email and simple file shares. The data side gives us the ability to extend our system without having to worry about reliability or uptime.” With continued Asia-Pacific growth in mind, Werner is now working on co-locating servers in AT&T’s Internet Data Center in Shanghai to support that expansion.

With three data facilities providing backup in Omaha, Werner takes business continuity very seriously. So there was great concern when an undersea earthquake off Taiwan recently cut submarine cables, disrupting public Internet service across Asia. For Werner in China, it was a non-event. “The AT&T network remained in place for us,” said Salverson. “The reliability of that underlying mechanism allows us to focus our efforts on other areas.”

AT&T has also smoothed Werner’s progress inside the country. “Within Asia, a lot of different telecommunications pieces have to be brought together to build the complete solution,” Salverson said. “Being relatively new to China, there are a lot of unknowns. AT&T was able to provide the complete end-to-end solution, and that has saved us a great deal of time and effort.”

The Largest Dividend

Transporting the increasingly valuable goods now moving from China to the U.S. and Mexico demands the closest possible coordination among shippers, freight forwarders, carriers and merchants. The more a customer has invested in a product, the more reliant they are on just‑in-time delivery programs so that they don’t have as many dollars tied up in inventory.

But shippers will not change their ordering patterns until they are confident that their supply chain is delivering consistently. Only then can they determine exactly where to trim the extra days and hours — and costs. Werner’s logistics management systems produce the answers such shippers are after, and the AT&T network delivers those answers, worldwide.

“Without our ability to reliably get information into our system, get it processed and disbursed around the world quickly, our customers just don’t have that confidence, since they don’t have the visibility to where their products are,” said Stoffel. “That’s where the AT&T and Werner collaboration really pays the largest dividend.”

Voice of the Customer

– Craig Stoffel, Werner Enterprises Vice President