Cyndi Brandt's picture

Jun 27, 2016


Cyndi Brandt

Sr. Director of Product Marketing & Alliances

It’s a concern for every carrier, and it should be: Do I have enough trucks in my fleet? Or, conversely, do I have too many? In an industry where every decision, if it’s a wrong one, can eat into already thin margins, a properly sized fleet is critical.

Obviously, a fleet that’s too big is losing money on idle assets. Trucks that aren’t on the road aren’t profitable. So leaner is better. But there may be such a thing as a fleet that’s too lean. A fleet that’s too lean isn’t able to react to opportunity. Instead of losing money on idle assets, lean fleets are leaving money on the table.

So how does a lean fleet maximize its profits? By running the fewest empty miles possible. Consider these numbers. An average truck is loaded only 70 percent of the time. The remaining 30 percent of the time, that truck is traveling between pickup and delivery points—empty—or waiting to be loaded.

That’s a tremendous amount of inefficiency. It’s wasted fuel, loss of productivity, poor asset utilization, and needless fuel emissions. But the confluence of increased connectivity and economic trends may be figuring out ways for fleet operators to cut back on all of those things.

The sharing economy solves the truck capacity issue

Increased connectivity is turning the logistics game on its head. Today, we’re using real-time data, and adopting and adapting systems, solutions, and technologies that support more modernized freight networks. Those modernized freight networks include mobile-based freight brokering technologies that will help carriers cut costs while improving asset utilization, fuel efficiency, and driver productivity.

What we are talking about is renting unused trailer space, either empty trailers that are being moved anyway or trailers that are only partially full. It’s not necessarily a new idea. Companies have been doing it for years, but technology is making the process of finding unused space much easier. It’s the sharing economy — think Uber and AirBnB —come to the trucking industry.

Using technology to eliminate empty miles

So, how does freight brokering help increase profits and productivity?  

Imagine a fleet has 25 trucks and 25 loads in a single day. If each truck travels 230 miles per day and 30 percent of those miles are running empty, that results in 1,725 empty miles travelled for this single fleet. An automated, mobile-based freight brokering system, however, can eliminate 8 to 15 percent of those empty miles. That provides carriers will find a number of important benefits:

  • Less fatigued drivers
  • Less time spent in traffic congestion
  • Happier shippers
  • More satisfied drivers and back office staff

How does it work?

The technology is sophisticated, but the process is pretty simple. It goes a little something like this:

  • The shipper enters their shipment into the mobile-based freight broker’s network
  • The system identifies the best-fit fleet, driver, or carrier within a logical distance
  • The fleet, driver or carrier accepts the load
  • The app automates the required back office documentation
  • The truck picks up its freight and proceeds with delivery

A lot of inefficiencies are eliminated through this type of mobile-based freight brokering process. A truck with remaining capacity, for example, can pick up a second load to run as efficiently and productively as possible. Even better, drivers can receive payment more promptly and a feedback mechanism allows customers to rate carriers, continually improving the system for increased customer satisfaction.

Like we said, adding this technology layer to solving the truck capacity issue is somewhat new, and it’s still evolving. Where it goes next is going to be shaped by the industry stakeholders — OEMs, drivers, fleets and freight brokers. We will look closer at the benefits for each of those groups in a later post.

But for smaller fleets this ability to fill what was empty space is a tremendous opportunity to fatten margins, find efficiencies and keep drivers happy.

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