Reinauer's Operation Systems Ready for 21st Century

The maritime industry operates according to seafaring laws that are hundreds of years old. Until recently, the backroom operations, too, reflected a less-than-modern view of the world. Virtually all systems were manual, resulting in the often onerous and ponderous transfer of information to customers, management and employees.

At many companies, including Reinauer Transportation Company and its sister companies, Boston Towing and Transportation, and Reincon, this has begun to change. The 77- year-old family owned and operated tug and barge company is now using web-built accounting and operations systems, which have dramatically transformed business for customers like Mobil, Exxon, Chevron and Shell.

"Over a period of three years, Reinauer will have gone from doing almost everything on paper to becoming totally computerized," said Ray Stoddard, a senior consultant at Flash Creative Management, the software solutions developer and integrator responsible for facilitating the change. "This has shifted the tenure and texture of the organization. It has saved them hundreds of man hours a week, given them a window on the web where clients can obtain information electronically, and provided them with an important competitive advantage."

The transformation began in 1998 with the development of a user friendly, state-of-the-art operations/tracking transportation system called TBSS (Tug Barge Scheduling System). Most recently, Flash has been working with Reinauer on the development of an accounting system called Billmaster, as well as payroll, crew tracking and cost/billing analysis applications that take into account the very unique demands of the industry.

"The billing in this industry doesn't lend itself to using off-the-shelf order entry systems," said Joseph Jones, Reinauer's controller. "It's not an inventory markup system where you're buying products in bulk. Almost every job is unique. You can do the same job today and tomorrow it won't be the same price. And the market is very sensitive to price."

Routine tides or silt in the harbor can affect rates. Extras like ice and demurrage charges may be added to the flat shipping rates.

Reinauer previously used PICK, a mainframe variant for its accounting system that was written for mini-computers, predating PCs. As a result of this old language, it took days for the company's biller - faced with mounds of paper passed on from the dispatcher's desk that needed to be digested and interpreted - to create and distribute weekly bills. Everything was batch-oriented. Bottlenecks routinely occurred at the copying machines. Worst of all, customers, who often had questions on their invoices, delayed payment. The process was arduous, labor intensive and ineffective.

"The biggest change has come from customers now being able to access their online site, to see their jobs in progress," said Jones. "They can annotate their jobs, challenge events. They can add notes to their jobs or to their bills."

Secure, password protected Extranet sites allow customers to view detailed bills matched with tug and barge movement in real time. A typical electronic Freight Bill includes Product Log (with Load and Unload Dates, Terminals, and Barrels/Product) and Discharge Summary (Discharged and Billable Barrels, API, Temperature, Draft, and Factor). A Demurrage invoice includes a summary explaining additional charges. "We see this as a huge plus for customers," said Jones. "The closer we can bring them to the action, the better it is for them. It has helped us settle our accounts more quickly, especially with our larger customers."

Computerization has also made a huge difference in compiling government reports, which are mandatory and increasingly frequent within the industry. According to Jones, a recent traffic report that married data from the scheduling and billing applications was written in 45 minutes, when it had previously tied his department up for a week.

"In the past, if we were busy in our dispatching arm and got a call for another job, we would often call in a subcontractor because we didn't think we'd have a tug or barge to do the job. As a result, we'd lose the income," said Jones. "Now that will never happen. The system knows which boats are available and where they're located."

Flash is presently developing a payroll application for tug, barge and yard employees, one which has been enormously paper intensive due to the complexities of an industry that includes union and non-union workers, those who work on a time clock and those who don't. "The company has gone from a small, insignificant company to a trendsetter. We were in the bottom quartile ten years ago," said Jones. "No one else in the industry has computerized to this extent. No one is automated from scheduling to accounting. Our customers have responded very positively, but it also means that they have put us under a microscope and are looking harder at us."

"This is also the cornerstone for the future, where there will be lots of compliance issues coming from Washington. We know that TBSS and Billmaster will allow us to deal with it."