Fleet Management Systems: The future is here

Aug. 1, 2005
Whether they were developed to organize dispatch or get checks and freight bills out the door, the first generation of fleet management systems were relatively simple software applications. Today they're anything but simple, having grown into complete enterprise management tools linked to all parts of a fleet's business. But such evolution is a continuous process, and as complete as today's fleet

Whether they were developed to organize dispatch or get checks and freight bills out the door, the first generation of fleet management systems were relatively simple software applications. Today they're anything but simple, having grown into complete enterprise management tools linked to all parts of a fleet's business. But such evolution is a continuous process, and as complete as today's fleet management systems may seem, they're really just one more step in the march of progress. Where, then, is that march taking us?

“The advent of microprocessor systems — affordable computing — coincided with deregulation in the 1980s,” says Tom McLeod, president of McLeod Software. “So you had new companies that could afford to put in computers right from the start, and they grew up with computing.”

Initially those systems focused on automating daily chores such as managing accounts or drivers, “but in the late 1990s fleet management systems began to mature,” says McLeod. “Partially it was the need to upgrade for Y2K compatibility, but (in trucking) it was also driven by better wireless integration and pressure to move to electronic data exchanges with customers.”


With that maturity came greater management sophistication about turning these new capabilities into planning tools. “Whether you call them dashboards or report cards, there's been a shift to real-time asset management, looking at where a fleet is today and where it should be tomorrow, at how the fleet actually did today,” says McLeod.

Having started on the operations side of the fleet business, TMW Systems soon realized that “dispatch packages make great filing cabinets, which means they offer a great framework for organization, for building an ERP (enterprise resource planning) for trucking companies,” says David Mook, exec. vp and CTO.

Adding analysis tools on top of that framework a few years ago let fleets begin to watch simple bottom line metrics in real time, in addition to watching historical trends. Alerts based on that data now allow a fleet to react quickly to minimize the impact of any single incident, according to Mook.

“We're turning the filing cabinet into a thinking machine with business intelligence,” Mook says. “For example, with an intelligent dispatch system we can give dispatchers the cost implications of a bad dispatch in real-time, tell them they're turning down a load when they have the capacity to handle it or that a particular load would cost too much to accept.”

Along with greater and faster analytical power, flexibility has become an important attribute of a fleet management system in the last few years, according to Bob Maddocks, president and CEO of Maddocks Systems. The dividing lines between truckload, LTL, 3PL and other types of transportation functions are disappearing, or at least blurring for many fleets as the entire transportation industry moves toward tighter integration. “Your (fleet management system) needs to be able to adapt to the changing needs of industry without changing the software,” he says. “So when a 3PL division pops up in a truckload or LTL company, the software has to be able to adapt to that. Today we're seeing organizations that have three or four or more modes of transportation they work within.”

The late 1990s and first half of this decade have clearly brought a great deal of change to fleet management systems. Today's systems generally offer broad functionality that extends through an entire fleet operation, tight integration with other internal systems and customers' systems, extensive use of real-time data from wireless communications systems, and greater intelligence for real-time planning and strategic thinking. Looking to the future, industry developers identify those same attributes as the focus for their attention and investment.


Greater flexibility and tighter integration are two linked areas that will benefit from wider adoption of open information technologies that allow both faster development of specific applications and easier communications between systems irregardless of the platform. New programming languages like JAVA and .NET, for example, allow those building software systems for trucking to respond quickly to requests for new functions, as well as make it easier to move data into and out of other systems.

These new languages “allow us to talk to foreign data bases better and to make better internal system interconnections,” says Mook. “They also provide more reusable tools, which makes our development process more productive.”

Web services — essentially using the internet and its standards to communicate between dissimilar computer systems — is the other information technology improving flexibility and integration, especially when combined with the data standard XML. Systems relying on web services can request and deliver data to any other systems in real-time without costly development or complex implementation.

In practical terms, web services “can dramatically reduce clerical costs of operations, dramatically speed up functions such as billing or customer service, and just reduce costs overall,” says Maddocks.

If you've every entered a Fed-Ex or UPS tracking number into a customer service screen for a catalog company, you've used a web service. Your request actually gets passed to the package carrier's system and the results passed back without any human intervention.

Maddocks offers a more trucking-specific example. A 3PL has a large shipper that requires one-hour notification on delivery. With web services, the shipper transmits shipment information into the 3PL's system, which uses business rules to alert the proper trucking companies. Drivers with wireless data communications update the trucking company systems when they make deliveries via web services, which then update the 3PL system and the shipper. No human being other than the driver is involved in the entire transaction.

Even Microsoft Office applications like Excel are web service enabled, Maddocks points out, allowing the smallest fleets to tie into such a network.


The new technologies also offer opportunities for adding “much more intelligence,” says Mook. For example, only the largest fleets currently have the capacity to make use of optimization systems, but with better inter-system communications it would be possible for smaller fleets to pool their capacity for cooperative optimization. The basic technology for this “cross-database optimization is already here,” he says. “We know how to make systems more interconnected and more efficient. The revolutionary aspect is figuring out how to wire it all together and get it easy to use. “Smarter, more flexible systems also allow you to move the frontline of data capture to the first person who knows things first,” says Mook.

Although that could be warehouse personnel, that frontline person is often the driver, which brings us to the future likelihood of even greater use of wireless data networks.

“Wireless data has been accepted as a standard tool by the industry for some time, and we have a pretty good core of functionality already,” says McLeod. “But new wireless options could really explode (that functionality).”

Shortly, McLeod predicts, there will be widespread availability of affordable wireless networks that will “give drivers online interactive, real-time access to the enterprise system. We expect rapid improvement in that (wireless) hardware and capability.”

In the past, “the cost of collecting data in real-time didn't compare to the value of the data coming back out of the systems,” says Maddocks. But with the new wireless options, and the growth in the power of computing systems, that equation is changing and “everyone is focused on improving the speed of capturing data.”


The payoff for pushing data capture into real-time and on to the front line will be far more powerful tools for moving both operational execution and strategic thinking into the same time frame. Or in other words, the dividing line between long-range planning and carrying out those plans will disappear.

But such a transformation will require more than technology. “I've found the real limiting factor in adoption of (advanced) systems is how quickly individuals and groups learn to use the information you generate,” says McLeod. “We can deliver systems only as fast as people can learn how to use them, so training and the cost of delivering that training to the end user will become much more of a factor than what new technology can do.”

Development cost, too, compounded by a current shortage of programmers, will shape the evolution of these advanced business tools. “Just as the shortage of drivers is causing a lot of pain for trucking companies, the pain of a programmer shortage will hit everyone,” says Maddocks. “Although it may sound self-serving, the truth is that most fleets with their own IT development staffs will find the cost of building something like a dashboard system prohibitive. You're going to see a major shift to outsourcing IT needs. At least a third-party developer can share the cost of creating that new software across a number of clients.”

Sitting pat with current systems probably won't be an option, either. “The transportation market is going to be highly constrained on capacity for the next couple of years,” says Dawn Salvucci-Favier, director of solution management transportation for Manugistics. Private and dedicated fleet operations are being created or expanded by many shippers to help them deal with that situation. The key to running such mixed operations is a management system that allows shippers to optimize both internal and external transportation options.

“Shippers are going to be making those decisions (on who gets what freight) much more dynamically,” says Salvucci-Favier. “Their carriers are going to have to truly integrate their fleet management systems with their customers' systems. Planning and execution will be performed simultaneously, and fleets will need to be in that network to take advantage of it.”

Other issues and technologies are certain to impact development of fleet management systems over the next 5 to 10 years. Biometrics, for example, is likely to become an important tool for securing data and trucks alike. Local area wireless communications technologies like WiFi are also moving even a mobile industry like trucking toward a world of ubiquitous coverage and seamless roaming, with all that implies for both data-collection speeds and hardware costs.

But in the end, it's the big business issues of improving productivity and decreasing overall costs that will drive changes in the software you use to run your fleet. That means you can expect major advances in integration and wireless data communications to deliver better, faster planning and management tools for those ready to use them.

About the Author

Jim Mele

Nationally recognized journalist, author and editor, Jim Mele joined Fleet Owner in 1986 with over a dozen years’ experience covering transportation as a newspaper reporter and magazine staff writer. Fleet Owner Magazine has won over 45 national editorial awards since his appointment as editor-in-chief in 1999.

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