Optimize your backhauls to cut down on fuel spend

Speaker 1:

Fleet managers looking for ways to minimize fuel costs? Even small gains can lead to significant savings. Download our fuel savings strategy guide today for 80 actionable tips to boost your fleet's fuel economy.

Matt Cole:

This year's higher diesel prices are putting a spotlight on efficiency and optimized backhauls are a big part of that.

Jason Cannon:

Hey everybody. Welcome back. I'm Jason Cannon and my co-host is Matt Cole. Diesel fuel prices national average peaked this year at $5.64 a gallon back in April based on the Energy Information Administration data. And that's remained above $5 a gallon until about late June.

Matt Cole: 

While fuel prices have been falling in recent weeks, this year's Spike put a spotlight on the commodity's pricing volatility for trucking companies. When fuel goes up as dramatically as it did this year, fleets look for ways to be more efficient. One way is through optimizing backhauls.

Sean Maharaj:

Hoptek is a freight monetization company. We are AI-based, heavily based in automation and helping carriers find the appropriate freight that matches their market and their network at the appropriate price, while also leveraging a variety of tools across the spot freight procurement universe across broker and shippers. Today we have probably almost a hundred thousand loads listed daily for one of our key products, which is Hob Tech Freightfinder. And we work with a large number of blue chip customers out there, which have been public. The likes of Warner and Prime and Herschbach and Martin out there. So we're happy to be helping trucking industry do what they do best with solutions. I think it's important with the way fuel has been going as you mentioned. For example, where I am in California, we've heard drivers talking about fuel going from $600 per tank up to even $1,000 per tank.

So the pressures on the margins depending on where you live are kind of undeniable, but certainly more pronounced you're on the West Coast. And if you're doing a head haul in any situation and then you're trying to find something to come back, definitely coming back empty is probably the least desirable scenario right now and having the ability to go out and probably extract that information and find some available freight, whether it's in your vicinity or within a certain radius that you can deadhead to and pull that freight really is very advantageous to kind of turning in that deadhead opportunity into some really valuable revenue. So we're seeing a number of carriers go out there and kind of go on the boards and take a look within our solution and look at what's available for them. And they even have the ability to go through some of what we have as kind of origin destination pair and kind of narrow it down into sub-segments within that.

So there's always something there for someone.

Jason Cannon:

So how exactly do firms like HopTech help fleets optimize their networks through technology?

Sean Maharaj:

There's a number of solutions out there. I mean, we've seen everything from whether you go out to the complete end of the spectrum on the optimization aspect. But when you're talking about in terms of load board activity and aggregation and spot freight procurement, I think what it allows you to do is to go out on these solutions and look from a network balance perspective where your equipment's going to be once it finishes its head haul and is required to get a backhaul and really find that backhaul that really fits specifically within not only your network balance, but also within your pricing parameters from an operational perspective. So we see that out there in terms of pulling in through a variety of different APIs, which are really the kind of the gold standard right now, pulling in information instantaneously. And the technology, as you mentioned, that are out there through these APIs are critically important right now because we're seeing some of these loads that are requiring instantaneous or near instantaneous response levels in order to take advantage of that load and grab it when you can.

In the past, the way people did it was they were out on different load boards, multiple screens kind of refreshing, entering information and trying to get to it in real time. But unfortunately, often it was gone by the time they decided it was actionable or kind of made the measurements on whether or not it actually fit their network or was at the right price. So a lot of the solutions today like ours has the ability to get that to you instantaneously and really monetize that very quickly at the right place at the right time.

Matt Cole:

A lot of this boils down to knowing your numbers as a fleet and understanding what the true cost is to move your truck.

Sean Maharaj:

I think that part as we talk to a number of carriers is a critical success factor. You cannot be operating in the marketplace today if you don't have a good grasp on your costs. And obviously what flows from that is really the pricing mechanism. So critically important, and in fact, we've seen some customers have a pricing mechanism that they've created in - house, or they even have pricing mechanisms that they're looking to employ from the outside like ours. And that again, I think is probably very important because the right freight is only the right freight if it's available at the right price and it always starts with the price. So I think that to your point is very important.

Jason Cannon:

As Sean explains, none of this would be possible without AI.

Sean Maharaj:

AI, I mean, aside from bringing in loads through multiple sources on different platforms, but it also gives you the ability to look at where exactly is the location, how do you regulate your operational requirements on a daily basis or by shipper? I mean, there's also looking at historical patterns as it comes with AI because it has the ability to analyze and look at weather traffic patterns and capacity and also the ability to find, as I said, the optimal load match. I think that probably without AI, we probably wouldn't be at where we are today. But as you said, there's a lot of different perceptions about what AI actually means, but bringing in all of these different data points really can only be had with sophisticated levels of AI today to get to that level of optimality. When we look at some of our load times or times when we talk about driver level trip-based optimization or trip-based freight finder, one of our products, we are taking into account for exactly just how long does it take a driver to execute this load and make it through traffic and make it through to the next point of destination, taking into account all those other factors that really play a role in on - time delivery and making sure they can get to the next revenue generating load.

Matt Cole:

What specific factors does this type of load matching tech use to optimize a fleet's network?

Sean Maharaj:

I mean, a lot of the factors we're looking at not only just what exactly the load is, but also we're also looking at what's the type of equipment you have. And we're also looking at what are some of the restrictions around the driver. Some drivers, they won't handle certain types of equipment or certain types of payloads. There's also certain organizations that say we won't go to a certain state. Some are not kind of restrictive or not looking at the state of California as an opportunity or they don't go out certain zones and that sort of thing. Those all play into that. They'll be looking at some of that. Also looking at the windows of opportunity for when you wanted to actually do a pickup on some of that load and when you want to deliver it. In some cases, we have people say that from the entire origin destination pair from where they're looking, they want to make sure that the equipment actually becomes available after they've made the delivery and they have a dedicated customer.

So it actually needs to be readily available at a certain point of time and they want to have a little buffer. So things like our corridor search exactly allow you to tailor that search and go out and look and say, "Hey, instead of doing, call it from Phoenix to Atlanta, what are some of the segments in between that allow us to figure that out and pick the best opportunity for us that may not be the entire leg?"

Jason Cannon:

That's it for this week's 10-44. You can read more on ccjdigital.com while you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.