Charting a path to savings

user-gravatar

The constant struggle in trucking to minimize costs has become more crucial as freight has slowed and fuel prices have remained fairly high. Too often, however, carriers focus their cost-controlling efforts on price, not efficiency. By running fewer miles to accomplish the same work, you can save far more money than by chiseling a penny or two off the fuel price.

To cope with the efficiency challenge, many carriers use routing and mileage systems. Routing packages help shave miles and time when preparing routes and schedules. They also are a source for maps and directions – key tools for drivers. The potential advantages of these systems go far beyond cutting operating costs and improving delivery schedules, however. You may be able to reduce or delay your investment in new equipment while hauling as much or more freight.

Seafood distributor nets savings
For Morey’s Seafood International, ensuring that fresh seafood is delivered on time to restaurants and grocery stores in a cost-efficient manner is critical. Morey’s is one of the nation’s largest seafood distributors. Its 65 straight trucks with 18- to 24-foot-long insulated bodies operate out of distribution centers in Detroit, Minneapolis, St. Louis and Albuquerque, N.M.

Before it started using the ArcLogistics Route system last fall, the Morey’s Seafood routing system automatically consigned orders to trucks that were assigned to geographic zones. But that system often did not work well because one zone might be overloaded, while other zones might have few if any orders.

Only after receiving their delivery orders did drivers determine the sequencing of their stops and arrange the orders in their trucks accordingly. Drivers gave the order sequencing information to Morey’s Seafood customer service representatives, who could only guess on a specific projected delivery time when a client inquired.

Working with Chicago-based consulting firm Truck Dispatching Innovations, Morey’s started using the ArcLogistics software, which is marketed by Environmental Systems Research Institute, to optimize the routing of 200 to 300 orders daily.

In the past, all Morey’s Seafood delivery drivers started work at the same time each morning, even though there were a limited number of dock doors available for loading. Using ArcLogistics, Morey’s Seafood dispatches three drivers and trucks every 30 minutes, starting at 5:30 a.m. Drivers now report for work 15 minutes before their assigned departure time.

Eliminating the chaos that previously ruled between 8 a.m. and 10 a.m. has reduced the number of loading mistakes, says John Handler, president of Truck Dispatching Innovations.

By using parameters such as weight, volume and other capacity constraints of shipments assigned to a truck, plus the available hours, the system maximizes the load on each vehicle.

In the past, Morey’s Seafood dispatched trucks that were, on average, loaded at only 80 percent of capacity. Now, the desktop system determines which trucks should be loaded at 100 percent capacity and can handle the deliveries most economically. In the first six months, the average load per vehicle increased from nine orders per route to more than 12.

Also, because the ArcLogistics system decides stop sequences, it prints a load journal at the loading dock, facilitating proper placement of deliveries within the truck. Morey’s Seafood drivers get a manifest, which details each stop and has a comment area for information on special handling instructions or delivery messages. The system also can provide detailed maps and directions for each stop.

The system offers dispatchers several customizable management reports that summarize a day’s projected activities. For example, a dispatch summary provides estimated costs per route and the projected time each vehicle will return to the terminal.

During the phase-in period in Detroit, Morey’s Seafood and Truck Dispatching Innovations matched the old fixed-zone approach against the new dynamic routing system. The old system loaded 44 orders on six trucks (7.8 orders per truck), traveling 384 total miles, Handler says. With the new system, four fully loaded trucks and one partially full unit, all of which traveled 343 miles, could handle the same orders, he says. That works out to 20 percent more orders per truck, traveling 11 percent fewer miles.

Before the ArcLogistics system was deployed, “The orders were incorrectly scattered across various routes, deliveries weren’t made on time, and the number of orders on each truck was out of synch,” says Ramon Cruz, transportation manager at Morey’s Seaford’s Detroit facility. “Now the routes are set up more efficiently, the trucks and drivers are better utilized, and deliveries are made on time.”

Cooking up savings
King Provision Corp., an independently owned distributor to more than 1,400 Burger King restaurants in 16 states, had a whopper of a fuel bill until the Jacksonville, Fla.-based company started using the TruckStops Routing and Scheduling System about eight months ago. As a result, the 60-truck operation’s annualized mileage will decline “by about 25 percent,” estimates Bill Bowers, corporate vice president for King Provision.

Bowers sees other benefits from the system, which is marketed by MicroAnalytics. King Provision has reduced the number of vehicles based at its 100,000-square-foot distribution centers in Jacksonville, Fla.; Louisville, Ky.; and Villa Rica, Ga., by 6 percent. At the same time, the amount of freight each temperature-controlled trailer transports has increased 15 percent.

Although King Provision’s delivery routes are essentially fixed, the company reroutes its entire distribution system several times a year for a variety of reasons, including the impact of seasonality. Bowers says that process previously required “at least two weeks of intense work,” manually reconfiguring routes, mileage, stop times and locations and delivery windows. Now the process takes only a few minutes, he says.

Routing systems allow trucking operations to improve utilization by matching the most appropriate driver and equipment with the shipment.

Helping routes blossom
Mike Teunis once spent all of his morning hours planning the routes for the following day’s deliveries. Teunis is distribution coordinator for Grand Rapids, Mich.-based J. Mollema & Son, a wholesale supplier to lawn and garden centers, landscaping services and flower growers. The 10 tractor-trailers Mollema leases from Ryder travel an average of 1,700 miles a week as they make deliveries in Michigan, Illinois, Indiana and Ohio.

Mollema started using the RiMMS 3.5 system from the Descartes Systems Group in January 2000. Since then, planning the following day’s routes and delivery schedules takes Teunis “about 10 minutes,” Teunis says.

After the RiMMS system configures each truck’s route and schedule, it prints out a listing of the orders, by truck and in stop sequence. The system also lets Mollema easily consolidate orders on fewer trucks during slower business months.

Besides providing Teunis with data on all costs related to the operation of each truck route, other Mollema managers value the system’s reporting capability because it helps them stay on top of expense issues related to each product the company handles, he says.

Taking the route of mileage systems
Routing systems are particularly useful in freight applications that involve assigning and sequencing frequent deliveries for each truck. For many applications, today’s mileage systems are sufficient to determine the most efficient, lowest-cost routes for trucks to travel.

Besides mileage calculations, these systems offer information on bridge heights, low underpasses, detours due to road construction, seasonal road closures, toll road avoidance and speed limits. They also provide detailed, color maps, optional street-level mileage and routing and interfaces with dispatch-oriented transportation management, mobile communications and vehicle location systems.

Personnel at Carson, Calif.-based Odyssey Transportation once had to page through a bulky household goods (HHG) guide whenever they needed mileage for setting up routes, calculating 68 owner-operators’ settlements or preparing freight bills. But life at Odyssey “got a lot easier” about two years ago, says office manager Theresa Moore, when it started using theIntelliRoute Deluxe system marketed by Rand McNally.

The printed HHG guide showed only the distance between two major cities – Los Angeles and Chicago, for example. For a load being shipped from the Los Angeles area to a Chicago suburb, Odyssey employees had to perform additional calculations to determine the exact mileage between a shipper’s and receiver’s specific locations, Moore says. The IntelliRoute system, which includes Rand McNally’s flagship MileMaker database of mileage between 14 billion point pairs, calculates mileage automatically. Odyssey, which hauls placarded loads throughout North America, uses the hazmat version of IntelliRoute to determine routes that avoid 10 hazmat restrictions, she says.

Also, the time it takes Odyssey to process bi-weekly settlement checks has dropped “from three days to half that time,” Moore says. And freight bills based on mileage take “less than half as much time to prepare,” she says.

IntelliRoute can select the lowest-cost route by analyzing tolls, fuel usage, driving time and maintenance costs. The system also features fuel tax reporting, a fuel management network and routing for singles, doubles and triples.

Prophetic planning
Ray Veilleux says fuel recently has cost his company, Waterville, Maine-based Classic Carriers, as much as 38 cents per mile. Ensuring that the long-haul carrier’s 15 trucks take the most practical routes is “very important because every extra mile you go is a total loss,” Veilleux explains.

To minimize excess miles, Classic Carriers has for more than 10 years used the Mileage & Routing system marketed by Prophesy Transportation Solutions.

Reducing excess mileage is such a passion for Veilleux that he established a bonus program for drivers. They receive a 2-cent-per-mile bonus if they follow the preferred route generated by the Prophesy system and turn in completed paperwork on time. Drivers can receive another 1 cent per mile if they stay within 1.5 percent of the mileage formulated by the Mileage and Routing system.

With the bonuses, drivers earning between 25 and 30 cents a mile “can increase their paychecks by at least 10 percent if they follow the company’s rules and stay within the routed mileage” determined by the Prophesy system, Veilleux says. Prophesy also has an enhanced version of its Mileage & Routing system, StreetRouter, which allows routing down to any street in the United States.

Systems like that marketed by Prophesy can calculate distance and estimate time while making it easier to figure fuel taxes and tolls.

Combination and integration
deBoer Inc. used ALK Technologies’ PC*Miler program for about six years until the Blenker, Wis.-based truckload carrier deployed ALK’s FleetCommander system this spring.

FleetCommander lets deBoer’s fleet managers locate its 450 trucks throughout the country in real time and allows them to correct routing problems on the fly. That feat is possible because FleetCommander integrates information collected from systems it’s linked to – in this case, the Qualcomm OmniTRACS systems on deBoer’s trucks, mileage data provided by ALK’s PC*Miler system and TMW’s TL2000 dispatch-oriented management system.

That combination of data allows deBoer’s operations personnel to obtain details on the truck driver, shipment and itinerary – even if the truck is in the shop – simply by pointing and clicking on icons representing each truck.

Fleet managers at deBoer don’t have to check the status of trucks continuously; exception alerts notify them when a truck is out of route. The system can provide each truck’s ETA and determine whether it’s on schedule or available for a new load. FleetCommander can also provide directions to preferred nearby fuel or repair facilities.

The cost-savings gained by using FleetCommander are “humongous,” says Robert Meldrum, deBoer’s lead fleet manager. It’s easy, Meldrum says, to send practical routing to drivers on the road. The system allows operations personnel to handle more trucks and drivers than before, and it makes training new employees “much more efficient,” Meldrum says.

DeBoer’s experience with integrating routing, mileage, dispatch and mobile communications shows the power of tying separate IT systems together. But even if you use them on a stand-alone basis, the efficiencies and other benefits to be gained by using routing and mileage systems probably far outweigh their costs.