This Opinion piece appears in the Jan. 2 print edition of Transport Topics. Click here to subscribe today.
By Brian Rudich
Chief Operating Officer
They say that information is as important as the freight, as if that’s a recent idea. It isn’t.
Freight documents have been essential pretty much forever. How else to confirm that something bought in one place was safely received in another? It was basic stuff.
Someone back in the mists of time hired someone else to deliver the goods, and commercial transportation was born. Then paperwork — or maybe it was scrawled characters on animal skins — became even more critical, and there was more of it. Dealing with transportation documentation has been a challenge ever since.
Physical transportation evolved over the years, of course. Horse-drawn wagons made way for modern trucks. Rutted dirt roads were replaced by superhighways. But freight document handling stayed pretty much the same.
Carbon paper came along in 1801, and the copy machine in 1959. They improved things but didn’t alter the basic paper trail. For most of the 20th century, for example, bills of lading and supporting papers went out with the driver, who brought them back at the end of the trip.
That’s where document processing began. The carrier sorted those papers, cut invoices, attached supporting documents, stuffed envelopes and put them in the mail — all by hand. For large, pre-deregulation carriers, it took armies of clerks in acres of office space to get it done every day.
As deregulation came in and competition increased, efficiency and cash flow became critical. The abbreviation DSO, for Days Sales Outstanding, popped up in more and more trucking conversations. The problem was that drivers were often on the road for weeks at a time — and so were their documents. A load delivered in mid-September might not be billed until October.
So drivers were asked to put their papers in envelopes and mail them home. But the mail was too slow for some carriers, and they began to use couriers. Then drop boxes showed up at truck stops, allowing drivers to stuff their papers in an envelope and move on. Their envelopes or trip packs were delivered to headquarters, often overnight.
Soon enough, centralized and truck stop scanning services along with document management systems came along. Then came portable, in-cab scanners and ultimately cellphone cameras good enough to do the job. Today, it’s often possible for truckers to bill a load the same day it’s delivered.
As chief financial officer of Command Transportation, a major freight broker, I witnessed this evolution firsthand. We started as a four-person shop in 1999, and at that point, we received 100% of our carriers’ invoices by mail. It wasn’t animal skins, but destapling, photocopying and data entry were laborious.
By around 2005, a good deal of our paperwork arrived as e-mail attachments — a huge leap forward. But guess what? Those e-mails were still going to individual accounts payable specialists’ e-mail addresses. If one person was out, an invoice would sit until he or she got back. And we still had to print each attachment to process it.
Later, we developed a process to work directly on computer monitors without printing documents, thereby enabling our people to review and process invoices more efficiently. Whether digital or paper, of course, all these docs still had to be sorted, grouped, validated and the data entered. We still had to ensure the supporting documents for an individual shipment were complete, that the information on one document corresponded with the others and that the data entry was accurate. Working on a computer screen was an improvement, but it still was costly and error prone.
Over time, we automated payables more and more. We purchased a document management system to store images. We deployed optical character recognition to read those documents. We even built thousands of templates to automatically identify many of these documents and extract information from them.
But as differentiating as this technology was, it still had huge limitations. The cost of integrating those different systems was very high. Maintaining thousands of document templates required several full-time experts. Even worse, the templates themselves were only partially effective. Because of the large variety of carriers and document types that came to us every day, we never could template the universe. And even the same document would look different from day to day based on load details or scan quality.
Despite such limitations, this technology helped Command pay its carriers more efficiently, quickly and accurately than ever before. And in my view, Command became the first-choice broker for truckers. This helped propel us to $560 million in revenue and ultimately a successful sale of the company in 2015.
But automation continues to evolve. Quantum leaps in technology have made transportation document processing smarter, cheaper and more flexible. With the application of artificial intelligence and advanced optical character recognition, an automated system now can recognize and correctly handle virtually any document without templates, programming or software installation.
With minimal setup, the newest technology can recognize and accurately read critical information regardless of its location on the page. The result is close to total automation of the billing and payables process — and improved accuracy. This technology already is being used by some of the top transportation companies in the United States, and I expect it to start spreading rapidly throughout the trucking industry.
HubTran, which is based in Chicago, is a provider of transportation back-office automation.