In two recent posts we looked at how shifting transportation technologies might bring the sharing economy to the trucking industry and, therefore, how critically important it is for companies that operate fleets of trucks, or that provide support services to them, adapt and become experts in using these new and ever-evolving technologies.
Adoption of new business technologies is never easy. It’s a matter of kicking old habits, and that’s difficult even when you agree that the habits must be kicked. People may recognize that the systems with which they’re comfortable are old, inefficient and in need of updating, but breaking through the comfort barriers of individuals and organizations is always a challenge. Another challenge: the learning curve that tends to bog down implementation and lower, if only temporarily, the success rate with new technologies.
But to survive – and thrive, long term - companies need to embrace new technologies. So let’s look at two highway carriers that got it right when it came time for them adopt sophisticated new tech.
This biodiesel company collects used cooking oil from restaurants, potato chip manufacturers and other food producers and delivers that oil to its refineries, where it’s converted into biodiesel.
While its business is cutting-edge, SeQuential’s method of collecting the used cooking oil wasn’t. Its trucking routes were large and inefficient. Drivers had significant autonomy over which restaurants or facilities they stopped at and in what order. Naturally, those that provided lots of used oil were visited more frequently. Smaller operations went longer between pickups. From the driver’s perspective, operating like this made sense. They were able to bring more feedstock to the refineries and earn more money. But SeQuential couldn’t afford to have those smaller operations ignored: they represent about 30 percent of SeQuential’s feedstock.
Additionally, since the routing methodology depended on drivers and hand-written logs, the system was prone to problems with data entry, weak reporting, inefficient routes, inaccurate driver logs and even log book and time clock fraud.
The answer to SeQuential’s problems was technology. With a state-of-the-art transportation management system, SeQuential began managing its routes more efficiently, planning them as much as six months in advance. That increased efficiency provided the ability to respond quickly to urgent, on-demand requests for cooking oil pickups. Drivers were freed up from lengthy data entry and record-keeping tasks, giving them time to pick up more used cooking oil. Not only did that rid them of responsibilities most of them disliked, it also gave them more time at home while earning more money.
The smoother data reporting and tracking processes also resulted in fewer data entry mistakes, improved back office efficiency and reduced spending on administrative work that does not generate revenue. SeQuential quickly became able to more closely monitor drivers’ behavior on the road, which led to improved route and time efficiency, shorter loading stops and all-around improved driver productivity.
Perhaps the most stunning result was a direct effect of being able to track the performance of the fleet and drivers, as well as the availability of used cooking oil in various locations and at different times of the year. Because SeQuential was able to better plan for its future needs, the cost of goods sold fell by a jaw-dropping 40 percent.
Sweetland Transport Inc.
This family-owned company is only nine years old, and when it began it didn’t have much in the way of technology. Its early survival was a tribute to the extremely long hours and hard work its husband-and-wife founders put in, and to their ability to build relationships within the industry and with customers. But to grow and thrive over the long-haul the owners knew they needed technological help—at both the business level and personal level—to survive.
In late 2012, Sweetland bought its first bit of transportation management software. The solution was simple: just access to a local load board, real-time trip monitoring, dispatching software and an integrated billing system. The results were quickly manifested and impressive.
For the first time, Sweetland found loads for its trucks that were stuck some place distant with nothing to haul back to a destination close to home, which improved cash flow and powered growth. From a handful of leased trucks, Sweetland today has a growing fleet of 49 rigs. Labor unit costs have gone down while driver efficiency and satisfaction are way up.
Sweetland’s customers are also happier now that they can log into the company’s system and see exactly where their loads are and receive automated notifications when drivers arrive and depart.
Clearly, the time is right for trucking companies, and companies that support them, to begin finding ways to use technology in order to take advantage of the shared economy. The efficiency and productivity gains, not to mention the potential boosts in cash flow and profits, are too significant to ignore. And if a company does ignore those, chances are its competitors will not. That company soon could find itself falling behind in the marketplace.
When trucking fleets harness the benefits of rapidly evolving technological advances—freeing company owners and managers to invest their time and energy in strategic planning, customer relationship-building, and driver retention—they’ll be positioned to grow and succeed in the shared economy.
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