Fleets use sophisticated techniques to fight overcapacity
In late 2005 when freight volumes peaked, fleets used information systems to filter through an abundant supply of loads to find the best matches for drivers. Even if the solution they found was less than optimal, at least it was profitable.
Today, load planners and dispatchers grapple with load imbalance as trucks and drivers outnumber loads. Many fleets are making unprofitable decisions just to keep trucks moving.
In times past, a fleet manager might have set up his dispatch software to immediately notify or even prevent driver-load assignments with an excess of 10 percent deadhead mileage. Today, the same manager might decide to move a large portion of his fleet empty from the Northeast and into a better freight market in the South.
Making the best possible driver-load assignments requires the ability to consider all of the alternatives and tradeoffs simultaneously. The larger the fleet, the more impossible it becomes for humans to calculate.
Earlier this year, C.R. England – the largest refrigerated carrier in the nation – implemented a sophisticated set of optimization tools from Manhattan Associates. Its suite of tools includes Driver&Load for matching drivers to the best possible load combinations across its network, and Drop&Swap to evaluate drivers and load combinations to determine optimal swaps en route.
To ensure that the software’s recommendations are optimal, C.R. England has taken extra steps to ensure the software has the most current cost information and fleetwide integration. C.R. England’s fuel cost per mile is updated to Driver&Load, by fuel market, on a weekly basis; keeping this information current enables the software to assign an accurate cost for deadhead miles. As fuel costs rise, the software automatically clamps down on deadhead mileage, says Ron Hall, director of business strategy for the Salt Lake City-based carrier.
Because optimization software matches drivers and loads on a global scale, obstacles such as regional load planning no longer blind fleet managers to the opportunities that exist for matching or swapping loads en route between two or more regions; as a result, the best driver is assigned to the best load, Hall says.
One of C.R. England’s priorities is to use the optimization software to remove the slack time from its network. The company uses a metric called Scheduled MPH – the mileage of a haul divided by the planned hours from pickup to delivery – to capture what the MPH is on a load at the time it is scheduled. For example, if pickup for a load with a distance of 480 miles is scheduled for Monday at 7 a.m., and the delivery appointment is set for Wednesday at 7 a.m., Scheduled MPH is 10 mph – 480 miles divided by 48 hours.
Another metric, Final MPH, captures the time from pickup to the actual delivery time. On the same load, if a driver was able to deliver it Tuesday at 7 a.m., the Final MPH would be 20 mph – 480 miles divided by 24 hours. The company has customized the tables in Driver&Load to flag opportunities for certain types of drivers – particularly team drivers that can utilize equipment around the clock – to be assigned to “high-efficiency” loads to increase load velocity.
“We’re working to encourage our scheduling staff to increase the Scheduled MPH on the loads before they’re ever sent to the drivers, and then incentivizing our driver manager staff to increase the MPH even higher for the Final MPH by pushing their drivers in earlier,” says John Coyle, C.R. England production coordinator, who shared the results of the company’s optimization efforts during a presentation in May at the Manhattan Associates Momentum 09 user conference. This year, deadhead miles have decreased from 7 to 5.7 percent, excess paid miles have decreased from 1.7 to 0.7 percent, and Scheduled MPH has increased from 20.5 to 23.1.
Small fleets may not have the resources or complexity to justify the use of optimization software to match drivers and loads, but for carriers that use it, the overcapacity in today’s market might not be as painful as it would be otherwise.
Aaron huff is senior editor of Commercial Carrier Journal.
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