As the trend of leaner inventory levels spreads across the supply chain, the trucking fleets that thrive in the new decade will be the ones that best adjust to the demands of the just-in-time economy.
“The expectation is on us not only to deliver, but to deliver right on time,” said Dave Williams, a senior vice president with truckload carrier Knight-Swift Transportation. “Some of our shippers have started to fine us, not just for being late but for being early. So the preciseness for which we deliver has risen dramatically.”
Knight-Swift is far from alone in facing stern demands from customers.
“They don’t want to hear what we’re going to do to make it right. They expect us to get it right every time, and that means picking up on time, handling [freight] claims-free, and delivering on time. And no exceptions,” said Jason Plumlee, director of maintenance for less-than-truckload carrier Saia Inc.
The executives appeared at a panel discussion hosted by Navistar International Corp. at the North American Commercial Vehicle (NACV) show in late October. Their comments reflect the precarious position many fleets find themselves in.
Facing pressure to boost wages for drivers and required to spend more to meet regulatory requirements, carriers are also investing in modern equipment and electronic systems to meet the demands of shippers and stay ahead of the competition.
All of these factors are converging to create what Cowen & Co. has classified in its research reports as an ongoing “tech war” in freight transportation.
“As we enter a new decade, we are seeing a maturation and expansion of many technologies and applications we could not have imagined even three years ago,” said Scott Sureddin, CEO of DHL Supply Chain, North America.
Looking ahead, Sureddin predicted “we’ll see artificial intelligence getting more accessible, robots becoming more sophisticated, and predictive modeling becoming even more accurate. This maturation will allow us to apply technologies in even more ways to drive efficiency and create value for our customers. The last decade introduced us to these technologies, and the next decade will make them commonplace.”
According to Mark Cubine, vice president of marketing & enterprise systems for McLeod Software, the industry is entering an era of “data haves and have nots.”
“The companies that have not only the systems and data infrastructure but also the analytics, things like AI and machine learning, will gain a more important competitive advantage, regardless of the size of their company,” he said. “They will be the ones with higher operating ratios and in a position to grow.
“There are also going to be companies that help each and every employee, including drivers, perform their job better because they have implemented smart business process automation,” Cubine continued, “and they put in place decision support information that helps their employees make the best decision, in very useful and visible ways, right at the point where the employee must make decisions.”
Continue to Part 2: Ending vehicle downtime in the new decade.
