The ferocity for velocity
The quest for productivity could transform trucking
Imagine that a customer comes to you with a load you can’t cover. No problem. With a single click, you simply find another available truck – one that just happens to be owned and operated by a competitor. The driver receives an in-cab dispatch and makes the pickup and delivery. Later, the two trucking companies automatically reconcile the revenue, driver settlement and other financial details. One company serves its customer; the other engages idle assets and labor. And both make money.
In a broad sense, this already happens thousands of times a day when carriers broker loads to other carriers and owner-operators or use intermediaries to fill empty trucks. For many trucking companies, customer service is a more important reason to maintain a brokerage division than the incremental revenue. And today’s information management tools allow for the load offering and acceptance portion of such transactions to occur at blazing speeds.
Still, with the threat of vicarious liability and other uncertainties inherent in depending on companies you don’t control, it’s natural that trucking companies as well as private fleets looking for backhaul opportunities would move toward closed systems that give customers greater assurance on service and quality control and help maximize carriers’ utilization. That’s one of the ideas behind the Reliance Network, an alliance of carriers spearheaded by Lakeville Motor Express. The Reliance Network doesn’t go so far as link its members’ dispatch and operations systems, but it certainly could one day.
Productivity challenges on the horizon will push motor carriers into creative solutions. A shortage of qualified drivers looms in the not-too-distant future. The federal government and the tort system will force carriers to adopt tighter driver qualification standards.
Consider the cumulative impact of several ongoing Federal Motor Carrier Safety Administration initiatives – Comprehensive Safety Analysis 2010, electronic onboard recorders, tighter medical standards, the availability of driver inspection data during hiring and auditors’ use of satellite tracking data for log verification. And if regulations don’t force changes, the threat of multimillion-dollar verdicts for negligent hiring and retention will. Tougher standards and greater transparency are inevitable.
Meanwhile, politics and the nation’s aging highway infrastructure will limit the potential for equipment productivity. Fleets can eke out more productivity by changing their specs and practices to accommodate greater payload, but these efforts can go only so far. And as equipment becomes more expensive, owners face greater pressure to maximize utilization of existing fleets first.
Fear might be the greatest roadblock.
With constraints on driver supply and equipment productivity, something must give if the trucking industry is to meet the freight demand of the coming decade and beyond. Eliminating empty miles and idle trucks will be key, and increasingly it will be necessary for freight to go where the equipment is – regardless of who owns that equipment.
The technology that would be required to link separate carriers seamlessly certainly is sophisticated, but it’s not an insurmountable challenge. In-cab communications are becoming universal, and interfaces among different solutions to allow for dispatch integration shouldn’t be much of a technical challenge. The task becomes easier as more information – such as drivers’ available hours of service – becomes available electronically in real time. The bigger hurdle likely will be configuring the integration in a way that provides all the necessary information without allowing the capture of competitively sensitive information.
The real impediments to stronger cooperation among carriers are legal and cultural. Carriers need detailed contracts to protect their interests, and in some cases the Justice Department might have to sign off on arrangements. Those are manageable hurdles. Most of all, owners and executives must become comfortable with the idea of sharing freight and equipment. Most executives initially will resist this idea out of fear, but the greater fear is failure. n
Avery Vise is Editorial Director of Commercial Carrier Journal.