This is part one of a four-part series on how technology can be used to reduce empty miles.
When Brian Holley, vice president of transportation for Whiteline Express, joined the company 16 years ago, he embarked on a multiphase approach to reduce empty miles. Holley developed a lane-density pattern and worked with brokers and third-party logistics (3PL) providers before ultimately hiring a salesperson.
“Then I hired a second salesperson, and it has gone from there,” Holley said, adding that today the company has a 14% deadhead rate, down from 29.5%.
What’s more, Whiteline Express, an operating company of Plastipac Holdings, has added strategic head hauls to help offset seasonal peaks and valleys of the business. Total revenue per mile has gone up. “Probably back in the day, we were in the $1.30 range. Right now, if everything goes to plan, we’ll be pretty close to the $1.90 mark this year,” Holley said. “Every penny saved is a penny to the bottom line.”
Whiteline Express is among several fleets that have worked to increase utilization by reducing empty miles.
“Finding backhauls enable us to generate revenue to reduce operating expenses on miles the fleet is already going to run,” said Mari Roberts, senior director of transportation for Frito-Lay Inc. “It also enables us to find the least landed cost of our network by optimizing the lanes that we haul versus what we outsource to third-party carriers.”
Advanced technologies are making it easier for fleets to find the perfect match, but it still takes time, said Gary Petty, CEO of the National Private Truck Council. “The people who do this right really have pretty much full-time dedication, using advanced technology and creating relationships,” he said. “So much of the success of a backhaul program depends on the tools and the time devoted by an individual company to optimize opportunities.”
Petty said fleets have to look at their total available capacity, how much is consistent and how it shifts seasonally. “The most successful private fleet backhaul programs are the ones that have a strategic plan based on a multiplicity of factors,” he said, adding that fleets should look for relationships with long-term viability. “It is really something that has to be looked at from a strategic perspective and not just as transactional.”
Dave Belter, general manager of Ryder Global Transportation Management, said finding opportunities in a particular geography is relatively easy. “However, matching freight requirements against unique equipment types and then to specific days and times that the backhaul capacity is available becomes the biggest challenge,” he said.
Belter said Ryder matches backhaul capacity with its freight under management and leverages its strategic partnerships with more than 1,500 additional freight sources. Ryder also captures the profiles of its customers’ backhaul capacity, such as the location, time and equipment type, and then matches those profiles against freight requirements.
Drew Wilkerson, president of transportation, North America, for XPO Logistics, said XPO’s team of backhaul experts utilize real-time GPS tracking to pinpoint the availability of trucks, understand drivers’ hours of service, and then execute the best matches against available freight. “Just as critical is having a wide array of available freight sources that can match to unique equipment types,” he said.
When considering backhaul loads, Penske Logistics has to understand the details of every opportunity, said Jeff Jackson, senior vice president of operations. He added that fleets need to be nimble. “If you’re in a seasonal business, your backhaul model needs to change,” he said. “We have a lot of grocery and home-improvement customers. Those are complementary seasons, so you have to look at them simultaneously. As grocery is ramping up, home improvement is ramping down.”
Penske has a centralized backhaul team at its headquarters and works to fill backhauls within its fleet as well as for the dedicated contract carriage it operates on behalf of shippers. “We also have a freight brokerage arm that brokers third-party freight and will fill it for our dedicated and other carriers,” Jackson said.