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October 7, 2010 8:00 AM, EDT

Opinion: Trucking Tech Seizes the Day

By Ken Weinberg

Vice President

Carrier Logistics Inc.

This Opinion piece appears in the Oct. 4 print edition of Transport Topics. Click here to subscribe today.

Long known for its simplistic and low-tech approach to logistics, the trucking industry fortunately has begun to realize how valuable technology can be in improving productivity and boosting efficiency throughout a company.

As evidenced by the presentations at my company’s recent user-group meeting, a greater sophistication and respect for technology has developed within the industry.

Data and information are key components of a successful transportation company. Analytics, business intelligence, forecasting and planning tools are becoming increasingly important to the way logistics companies around the world run their businesses.

Over the years, I have witnessed logistics moving from action to planning. Managers no longer need to walk around on the dock pointing to freight and telling a dock worker on which truck to load it. Using technology, managers now can plan on the prior day for the setup and loading of the trucks on the next day.

 

Technology is becoming the rule rather than the exception. I have identified six trends that reinforce my point and help explain what the logistics industry can expect from technology in the future.

Trend No. 1 — Everything goes on the Web: Carriers, shippers and their customers are processing more and more of their information on the Web, eliminating the need for phone calls, faxes and e-mail. Carriers and shippers can access all pertinent information online, at any time. Shippers can trace shipments, view freight charges and rate information, get price quotes and inquire about transit time, accounts receivable and payments. Carriers can provide a wider array of services to shippers.

For example, a Web application enables shippers to log pickup requests, locate and print out bills and send pickup requests to the carrier’s dispatch system automatically. Shippers can access reports and analytics online and carriers can provide automated e-mail alerts and updates.

The Web also is enabling more carriers to benefit from technology to manage the intricacies of their business. Software developers are offering to host carrier systems on a subscription basis, i.e., software as a service, an application of “cloud computing” that eliminates the need for trucking companies to make large capital expenditures and take on sizeable upfront costs for in-house software systems.

Trend No. 2 — Accounting-only systems are on the wane: Accounting now is only a fraction of what computer systems can accomplish for carriers. Many other functions have been added, including auto-rating, billing, collections and costs. These functions alone, however, only achieve part of the efficiency and savings carriers have come to realize from their computer systems. By using the full capabilities of a freight-management system, including efficient truck routing, improved loading efficiency, reduced backtracking, saving wages on the outbound platform and adjusting the linehaul schedule, even smaller fleets can get big savings.

Trend No. 3 — Shippers demand instant rates and instant Global Positioning System-style shipment tracing: What does it cost to send a skid holding 50 boxes of ironing-board covers from Skowhegan to Sacramento? Where exactly is the shipment now and when will it arrive? Shippers have come to expect precise, immediate answers via a carrier’s website.

Trend No. 4 — Automation re-places phones and e-mails: While writing this article, I checked with an IT executive with a large transportation firm who told me that with an up-to-date computer system, a customer can check the latest invoice online or see a delivery report immediately. There’s seldom a need to use phones or e-mails.

Trend No. 5 — Transportation companies can assure security and disaster recovery for their IT systems: A big IT issue today, but one too often ignored, is system security. Early concerns about security and loss of data have been allayed by improved technology.

When selecting a system or a hosting provider, go top tier and be sure you have the latest in data encryption and password protection.

The downside of a somewhat higher initial expense offsets very well against the downside of a disaster, which can be the loss of your information — or even your whole system.

Trend No. 6 — IT will tie together the whole organization, from everyone at headquarters to remote terminals to every driver on the road, with instant access and communication: Even radio frequency identification device labels that automate shipment tracking tie into shippers’ computerized tracking systems.

As the transportation manager of a major media company told me recently, total system integration can range from easily tracing a shipment to providing visibility within a company for managing operations. A clear picture of activity is needed across a company, including aggregate numbers.

Tools for achieving clear information, communications and understanding include single-data input to reduce keystroke errors and tracking key performance indicators in real time using business intelligence.

When I was researching IT and trucking for this article, I asked a major trucking industry consultant for his take on where things now stand with trucking and technology. He told me that in his opinion, the Internet and smart-phone technologies have transformed the industry, enabling faster, more comprehensive communications and making technology easier and more intuitive.

Progressive trucking companies will exploit these technological advances to drive down costs, more tightly integrate with customers and lift revenues.

Carriers, are you listening?

Carrier Logistics Inc., Tarrytown, N.Y., provides transportation software solutions for trucking companies.