Fuel a hot topic at ALK Summit

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The impact of $4.05 per-gallon diesel fuel in a sluggish economy topped the list of North American trucking challenges at the fourth annual ALK Transportation Technology Summit held April 14th – 16th in Princeton, NJ. ALK Technologies brought together leading technology providers and senior executives in this unique thought leader symposium.

ALK Technologies is a worldwide developer of GPS navigation, routing, mileage and mapping solutions.

“If fuel is going to be so expensive, then we have to be more efficient,” said ALK founder and Princeton University professor Dr. Alain Kornhauser as he welcomed the group at the start of the Summit presentations. The ALK Transportation Technology Summit offered an exclusive opportunity for transportation technology professionals, both providers and users, to discuss industry issues, and ways in which technology could help meet the challenges.

“Fuel is crippling this industry,” said John White, executive vice president of operations for U.S. Xpress Enterprises, one of the largest North American motor carriers, based in Chattanooga, TN. White was speaking to an audience of 150 representing many transportation, logistics and manufacturing companies, and suppliers of transportation technology such as mobile communications systems, operations software and safety solutions. White stated that current fuel surcharges have never been adequate and are now far exceeded by recent price hikes.

“Freight rates based on fuel costs of 17 to 18 cents per mile four years ago are now based on 26 to 30 cents per mile,” he said. “Moreover, hub miles – the actual distance a truck travels – are significantly higher than the shortest miles shippers most often pay for.”

Household Goods Guide or Shortest mileage-based rates are increasingly seen as a problem under the pressure of rising fuel prices. During the truckload roundtable discussion one motor carrier noted that actual mileage can be as much as 18 percent higher than billed miles, particularly where hazmat or load parameters limit the truck routes available.

Another carrier pointed out that they are now having success in billing some shippers based on PC*Miler Practical – 53′ Trailer mileage, the closest representation of how far the freight actually moves.

White noted an upside to recent statistics. Freight volumes have bottomed out recently and begun to rise, he said. At the same time, a surplus of trucking capacity has eased. “Soon, carriers will have more rate leverage with shippers,” he said. “We’re approaching equilibrium in the market.”

Dave Ward, the former CEO of Ward Trucking, a fleet consultant and turnaround specialist for Pittsburgh, PA-based ThoughtDrivers and Aaron Huff, senior editor of CCJ Magazine, led a discussion on how LTL carriers can become more competitive and profitable. The LTL roundtable began with a survey on how fleets use information and analysis to drive their businesses. A discussion followed on the importance of analytics and the decision support tools necessary to make sense out of the complex LTL trucking environment.

Ken Crane, applications manager, mobile technology with U.S. Xpress, addressed the importance of keeping trucks on route. He outlined that fleet’s project to deliver ALK’s CoPilot Truck real-time, turn-by-turn, spoken directions to drivers and noted that accurate customer address data is important for success. Crane said that one U.S. Xpress driver claims CoPilot saves him approximately 400 to 500 out-of-route miles per month – miles for which neither driver nor carrier is paid.

Norm Ellis, vice president and general manager of transportation and logistics for Qualcomm, the San Diego-based mobile communications and solutions provider, believes that predictive modeling could be the “next big thing” in trucking technology. He explained that predictive modeling analyzes vast amounts of operational and other data to anticipate which drivers are likely to have an accident. Companies are then able to intercede, to require training or modify driver behavior.

Tom Flies, senior vice president, product management for the mobile communications and onboard computing company Xata Corporation of Minneapolis, MN, described an incident in which trucking managers wirelessly extracted vital incident data from a burning truck in the moments after a catastrophic accident and before the truck was completely destroyed. A number of participants said that onboard data collection and such evolving technologies as driver cams – cameras mounted in the truck cab – often prove that a truck driver was not at fault in a given accident scenario.

Automated driver logs are rapidly entering the trucking mainstream, proving beneficial to carriers and surprisingly popular with drivers. Richard Olson, CEO of Fil-mor Express, a truckload carrier based in Cannon Falls, MN, said that the automated driver log application running on the carrier’s DriverTech onboard system has led to virtually total verifiable compliance with regulations. “Fil-mor has experienced zero out-of-service incidents in the 24 months [since implementing] DriverTech and automated logs,” he stated.

Brian McLaughlin, chief operating officer for PeopleNet, an onboard communications and solutions provider based in suburban Minneapolis, introduced customer Patrick Cozzens, executive vice president of Modern Transportation Services, a dry-bulk truckload carrier based in Portersville, PA. Cozzens said that his fleet, which uses PeopleNet’s eDriver Log solution, has seen a 15% reduction in hours-of-service violations. At the same time automated logs required only a quarter of the company resources.

Jeff Sibio, strategic vertical marketing director for Intermec Technologies, based in Everett, WA, said that fleets find the most versatility in handheld devices running on Windows Mobile. “Fleet customers should have the ability to develop their own unique solutions using Application Programming Interfaces and Software Development Kits supplied by their technology providers,” Sibio stated.

Warren Patterson of SMC3, the Atlanta-based provider of rating data, technology and educational services, explained that web services enables one web-based application to seamlessly incorporate content from another. “The move to web services has reduced the time it takes to integrate revised data from weeks to hours,” Patterson said. James Ray, chairman of Boston-based Raytrans Holdings, which operates a 200 truck flatbed motor carrier, 3PL and brokerage operations, told attendees that web services allows it’s various companies and terminals to access data quickly and practically.

David Mook, chief operating officer and chief technical officer for TMW Systems of Beachwood, OH, described the impact of TMW’s software “dashboard” which analyzes a fleet’s operational data in real-time and displays trouble spots. He gave an example of how one fleet had the dashboard alert dispatchers for loads involving more than 200 empty miles, leading to a reduction in empty mileage.

Ernie Betancourt, president of Innovative Computing Corporation, of Brentwood, TN, described auto-dispatch, a way to increase fleet utilization by automatically dispatching trucks even during non-business hours, while also warning fleets to implement fuel optimization routing with care. The technology integrates route selection with real-time fuel prices and creates a money-saving plan for fueling on a long-haul trip. “Some drivers to do not like the very detailed instructions,” Betancourt said. “The prices on which routes are based may not always be the same as the actual prices paid at the pump.”

Going forward, fleets are honing existing technologies and implementing new ones. Dr. Kornhauser described dynamic routing and turn-by-turn directions for drivers on handheld devices for a package delivery service in Europe. The software, he said, was able to consider and route for specific constraints, such as customer delivery and pickup hours. The system is similar to earlier solutions, but on a portable device with driver navigation/directions built in. The impact had an increase in overall efficiency.

While driver turnover was not the immediate issue as it has been at previous Summits, filling driver seats will remain a challenge. “Over the next 10 years we will have to replace 200,000 retirees,” said U.S. Xpress’s John White. “Another 300,000 drivers will need to be found to handle growth. Altogether the industry will need 500,000 new drivers or 50,000 drivers a year.” Dennis Morgan of truckload carrier Cowan Systems in Baltimore, MD, sees problems attracting management people as well. “Trucking is not sexy,” he said. “It’s hard to recruit kids out of college.”

ALK Technologies plans to host their fifth annual event next April. For more details, visit: www.alk.com/techsummit2008.