Once upon a time not so long ago, fleets received and processed information about their equipment, drivers and loads by telephone, on paper or in person, and that was that. As a result, trucking was a business as linear as the highway and “real time” simply meant the same very busy 24-hour day to everyone in the industry. It has been some time, however, since real time was such an orderly, even leisurely concept and since information flowed in such a predictable, chronological channel through a fleet operation. Technology has changed all that forever.
In its 2005 report, “The Freight Technology Story,” the U.S. Department of Transportation, Federal Highway Administration, Office of Freight Management and Operations identified five clusters of freight technologies that can be applied individually or in various combinations. Each one of these technology clusters generates enormous amounts of information, most of it accessible constantly and instantaneously, for fleets to use or ignore (www.ops.fhwa.dot.gov/freight). These include:
Asset tracking: Uses mobile communications, radio frequency identification (RFID) and other tools to monitor the location and status of tractors, trailers, chassis, containers and even cargo
On-board status monitoring: Uses sensors to monitor vehicle operating parameters, cargo condition, and attempts to tamper with the load
Gateway facilitation: Uses RFID, smart cards, weigh-in-motion and other non-intrusive inspection technologies to simplify and speed operations at terminals, highway inspection stations and border crossings
Freight status information: Uses computer technologies (including web-based) and standards to facilitate the exchange of information related to freight flows
Network status information: Uses services to integrate data from cameras, road sensors and display technologies to monitor congestion, weather conditions and incidents
There are other ways to divide and categorize freight technologies, but this FHWA take provides a good overview of the number and variety of technology conduits through which huge volumes of information flow into truck fleet operations every single working day. Are fleet owners and managers using all the data available to them to make better decisions? Do they even know how much they know?
Fleet Owner had the opportunity to talk with experts on the subject of information utilization, including Lee Clair, a senior partner at Norbridge, Inc. (www.norbridgeinc.com) and a consultant to the trucking industry; David Mook, COO and CTO for TMW Systems, Inc. (www.tmwsystems.com); and Matt Cacace, COO of McLeod Software (www.McLeodSoftware.com).
FO: Are most fleets taking advantage of all the information technology makes available to them to make better business decisions, or are carriers overwhelmed with more data than they can reasonably use?
Clair: Believe it or not, data overload has not peaked yet. There is more to come. The challenge will be getting the right information to the right people at the right time — to customers, maintenance operations, drivers, and so on. We have to utilize the data to make productivity gains wherever we can. After decades of fairly steady productivity gains, freight transportation is looking at negative productivity trends on several fronts. That is not good news for anyone.
Mook: There is a broad spectrum of people in this industry who are just excellent technology users and some who have a long way to go. Even our very best customers probably use about 70% to 80% of our system's capabilities, for example, and about one-third use is pretty typical. Part of that is our fault. We got used to the idea of selling “gradualism,” of turning functions off at first so that people weren't overwhelmed.
For example, we meet with customers early on and recommend that they begin tracking just 5 of the possible 150 key performance indicators available, such as empty miles, out-of-route miles, revenue per truck minimums, etc. Then we like to come back in about six months and do an audit of their system use and processes to look for the next opportunities. Eventually, some companies may track as many as 50 key performance indicators.
Cacace: I'd have to say no, most companies probably do not take full advantage of what is available to them either in terms of using all the information technology provides or in terms of using all the capabilities of the systems they have. Ongoing training and consultation is part of the solution. We have a program we call our Customer Advocate Program, for instance. We come and spend a day with a client at no expense to them to see how things are going and to see what else they would like to do. Then we make specific recommendations.
FO: Is using technology to the fullest really all about asking better questions?
Clair: It is absolutely about asking better questions. The other piece of the puzzle is finding ways to use very inexpensive and generic tools applied against the data to make sense out of what you have -- to make it actionable intelligence.
Mook: You can find some very sophisticated questions being asked by fleets today: Are some hauls being priced incorrectly? Which customers account for most of our profit? There are fleets doing what I'd call true data mining.
FO: Are there techniques for making information more accessible to fleets?
Clair: “Data visualization” is the term we use to refer to methods of organizing and displaying data so that it is easier to see what is really going on and why it matters.
Cacace: Sometimes a very simple data display tool, such as adding color, can make all the difference. For instance, if a driver is out-of-route that can be shown in red on the Estimated Time of Arrival screen so that a fleet manager doesn't have to read every ETA to spot potential problems.
Mook: Visualization techniques can definitely make it easier for users to “see what they are seeing” more readily. Asset utilization improvements, for example, are usually the result of changes made by someone in the trenches because the fleet management system made it easier for him or her to see what was really taking place and do better. If someone can see the gaps between loads, for instance, they can ask, “Can I squeeze another load into that slack time?” We have a customer who added 30 extra trips per week just by identifying what we call “fat loads,” that is, loads where there is too much travel time figured in.
FO: Can technology make even mediocre managers good?
Clair: Yes, technology can help make mediocre managers become good managers, but it also helps good managers get even better.
FO: Is access to all this usable data helping fleets to make better strategic as well as tactical decisions?
Mook: Yes, the best fleets are using it to develop longer-term strategies. For instance, a company might use data from their fleet management system to identify lanes where they have a high number of backhauls so that they can put more sales effort there. Or they might ask: What acquisitions make sense for us? What tractor-trailer ratios are optimal by terminal location?
Clair: Fleets have always had good information for making their strategic decisions. You don't need real time data to do that. However, real time data can help you to see nuances, such as identifying customers who are costing you too much to serve.
FO: Do you see areas of particular opportunity where technology could make a bigger impact?
Cacace: I think that technology could play an even bigger role among shippers. For example, there may be opportunities for two manufacturers located right next door to one another to cooperate to create efficiencies and savings. They might get together to develop continuous routes, for instance. This could really benefit the carrier, too. The carrier might end up with slightly lower rates, but with such significant reductions in non-productive miles that they still see a net increase in profitability. Or they might have more opportunities to grow the dedicated side of their business.
Clair: In the end, it will be about how people deal with people, how well we can work together, that will determine the extent of the benefits we all actually realize from technology.
The (avoidable) obstacles to success
“Top tier motor carriers take full advantage of the available technologies because they know the enormous value this brings to their company and to their customers,” observes George L. Edwards, president and CEO of George L. Edwards and Associates, as well as a part-time professor of management, transportation and logistics for a number of major universities and a long-time consultant to the trucking industry. “There are other carriers out there, however, who have these same technologies but do not get the full value from them. ‘Why not?’ is a good question and I think there are a number of reasons.”
Edwards' list of the issues that most often get in the way of full and successful technology deployment may help even those fleets which are already doing a good job utilizing technology tools wring still more value from their investments:
Insufficient initial training for users: “I have actually seen a company spend over one million dollars on technology and then refuse to spend a few thousand more on training,” Edwards says. “They are no longer in business, but that is a true story. You have to make sure that the people who are actually going to be using a technology solution understand what it can do for the company and how to utilize it to get the job done.”
Dilution of training over time: “Sometimes companies do invest in training for the first generation of system users, but as people leave or are promoted, those that follow get only a small percentage of the instruction the first users got,” Edwards notes. “You know how it goes. The person moving on shows the new-hire how to do about 20% to 30% of the job and then says, ‘Okay, this should get you started, call me if you have any problems,’ and leaves. This happens a few times until the person assigned to use a system finally has very little understanding of what it can do or how to use it. In many places, it eventually becomes a matter of sink or swim.”
The system is never fully used for the purposes intended: “Many systems today include functionality that some users just elect not to take advantage of. Tracking driver hours of service (HOS) automatically is a good example. Practically every fleet management solution supplier offers an automated hours-of-service capability, but some carriers prefer not to use it under the misconception that what they don't know can't hurt them. The better approach is to have a solid driver policy and then take advantage of technology to make sure you live by those good policies.”
Lack of leadership: “Today's communication and management technologies create change throughout an organization. They alter its basic business processes, the way work gets done. In order to get the most out of an investment in technology, company leaders have to insist on its utilization and demand a certain level of proficiency on the part of all users. Sometimes this doesn't happen and then you find employees saying, ‘I just don't have time to do all this new, extra work,’ and the company never realizes most of the potential benefits from its technology tools.”
Unwillingness to staff: “If fleets don't understand exactly what savings or other benefits they could realize if they deployed a particular technology solution, then they don't see the need to pay for staff to do that job. Reducing out-of-route miles is a good example. Thanks to GPS, we can know almost instantaneously if a driver is out-of-route, but not everyone sees the need to track and manage that. With fuel as costly as it is now, however, reducing out-of-route miles is almost always well worth doing. I'd take a 10% reduction in wasted miles any day.”
Systems that don't perform as expected: “There are so many good technology solutions available today, scaled to be affordable for smaller companies as well as the biggest fleets. Occasionally, however, a fleet ends up purchasing hardware or software that just won't do what they had hoped it would, even with modifications. This usually happens because the carrier doesn't know enough going into the deal to ask the right questions up front. ”
“There are technical and institutional barriers to the acceptance of new technologies and operating practices in most industries. Some barriers for intelligent freight applications, however, may be more complex when decisions by private firms depend upon government budgets and actions…. Concerns and barriers to implementation:
- Efficacy and technical immaturity
- Standards acceptance
- Operational impacts and systems integration
- Business case and benefits
- Exposure to government action and inaction
- Protection of proprietary information
- Reluctance to change
(“The Freight Technology Story,” the Dept. of Transportation, Federal Highway Administration, Office of Freight Management and Operations, 2005.)