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Caterpillar signs up rival as ASP

Caterpillar Logistics Services, a subsidiary of heavy equipment maker Caterpillar, is using the services of a rival to help it...

Caterpillar Logistics Services, a subsidiary of heavy equipment maker Caterpillar, is using the services of a rival to help it reduce annual transport costs.

Caterpillar has appointed rival Schneider Logistics as its application service provider (ASP) for transport logistics technology.

Under the deal, Caterpillar Logistics will use the Schneider Utility for Managing Integrated Transport (SUMIT) suite of applications to provide transport management and delivery information for all of its North American truck shipments.

Schneider's technology will allow Caterpillar to optimise costs for inbound and outbound shipments, while providing the ability to track and trace material in transit, said Rachelle Kunz, a Caterpillar spokeswoman. The agreement will also allow it to centralise its transport management operation.

The decision to use Schneider as an ASP was based on an assessment of its capabilities and the fact that it supports the same decision support tools Caterpillar Logistics uses, Kunz said.

"The [third-party logistics] landscape is a very competitive one, with thin margins and a lot of players," said Michael Bittner, an analyst at AMR Research. "This is a pretty unique deal. Schneider obviously had a value proposition that met Cat's needs."

The deal also highlights the increase in attempts by third-party logistics firms to expand into the hosted services arena in a bid to differentiate their products, said Adrian Gonzalez, an analyst at ARC Advisory Group.

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