The fate of the majority of the trucking industry rests on one key “Economics 101” fundamental. Supply and demand. Supply means “trucks and drivers”; demand means “good paying freight.” The success of any company rests on one fundamental—people.
With that in mind, I’d like to take a look at what successful companies have done in 2013 and how they are positioning themselves to be even more successful in 2014.
People
Sylectus has more than 750 subscribers and I have been fortunate enough to personally visit and talk with hundreds of them. From their successes and hardships, I have learned the following:
- The most important role in the trucking company is the driver. The driver is the “face” of the company. The driver is the person the customer actually sees at his loading dock. So the way the driver presents him or herself is how your customer will perceive your business. The driver is also responsible for the work the company does. The success of the business is dependent upon this person moving tons of freight from point “A” to point “B”, on time, and safely, all the while satisfying the many regulations imposed on the industry.
- The second most important role in the trucking company is the dispatcher. The dispatcher is the “voice” and “brain” of the company. The dispatcher is the person the customer interacts with, so the way the dispatcher sounds and how he or she resolves customers’ freight problems, is the way your customer will perceive your business. I compare them to a chess master, meaning that they must look at all the shipments (demand) and match them up as efficiently as possible with all the trucks and drivers available (supply). And often times, regardless of how good they are, at the end of the day they always have shipments they could not cover and trucks they could not move, simply because their trucks are not in the right place at the right time.
One of the most important things I’ve observed is that the most successful trucking companies today focus on improving the workflow of these two key employee groups.
Technology
Since Sylectus provides TMS technology to hundreds of trucking companies, we get many opportunities to gain unique insight into their buying decision process. Often, the decision on which technology to buy is not based on the question, “How do I help my most important employees (the driver and the dispatcher)?” but rather, “How can I improve my accounting process?,” or “What is the cheapest solution to automate my business?” What these trucking companies do not realize is that if instead, they focused on optimizing their two most important employee groups their company would be more successful.
Dispatchers need tools to manage the ebb and flow of supply and demand. As an example, Sylectus provides a web-base, protected, trusted network of “like-minded,” progressive carriers, as well as a fully functional web-based Transportation Management System (TMS). For the driver and dispatcher, this kind of technology has opened the door to expand their business opportunities.
Our TMS helps carriers get business by giving them access to a trusted network of more than 13,000 vehicles across the U.S., Canada and Mexico, providing dispatchers with elastic supply and allowing the carrier to say “yes” to their customers more often. The more they say “yes” to a shipper, the more business the shipper will give them.
It allows carries to keep the business through collaboration—using the TMS, if the carrier brokers a load to another Sylectus subscriber using the TMS, the load data is shared between the two carriers (this is called Virtual Fleet). As the truck actually running the load moves or sends load data (positions, arrive, load, empty), the data flows seamlessly, in real-time, back to the carrier with the shipper relationship and even to the shipper. Both carriers see the same load status information—almost like having the power of a virtual dispatcher. Loads can be tendered to other carriers, yet managed as if they were on the carrier’s own truck.
Sylectus also enables fleets to keep their drivers happy by leveraging the network. Excess trucks (supply) and loads (demands) can be posted on the network to share with other trusted network members. This provides more opportunity for dispatchers to find work for their drivers. With more than 25,000 truck searches per day and more than 2,500 loads posted per day, opportunities to keep drivers moving and reduce empty miles improve. More miles often mean happier drivers.
Finally, it allows carriers to diversify their businesses. The network also provides the ability to expand geographic or mode opportunities. For example, a 30-truck trucking company in Tennessee can look, feel and act like a 13,000+ truck operation across North America with access to cargo vans, straight trucks, tractors, flatbeds, reefers, etc. The ability to expand into a new market or deeper into existing customers improves with the web-based, trusted network.
Trucking companies that have invested in technologies that improve the productivity of their two most important work groups, drivers and dispatchers, realize better-than-industry growth.
Bring Your Own Device (BYOD)
A trend gaining momentum is the “Bring Your Own Device” (BYOD) concept. BYOD has made inroads with drivers to improve their work environment. In fact, many drivers already have personal smart phones, so adding applications that can reside on these existing devices to make their job easier makes a huge amount of sense. Why introduce multiple technologies in the cab if one technology platform can deliver it all?
Within the last year, the industry began to see significant mobile technology adoption, a real change from the old days of paper logs and manual operations. Mobile has become a crucial part of life on the road for truckers. The use of handheld devices is exploding in the trucking industry, with the proliferation of industry-specific mobile apps that help improve safety and compliance, reduce costs and increase customer satisfaction. Sylectus is at the forefront of this development.
There are many applications available to the driver on both the Apple and Android platforms to manage driver logs, vehicle inspection reporting, document imaging and more. Sylectus entered the BYOD era with the launch of its fully integrated smart phone app called Sylectus Mobile, in June 2013, which allows drivers the freedom to use their own mobile devices and reduce the burden of trucking companies having to source, install and configure in-cab technology. The application can track a driver and provide two-way communication between them and the Sylectus Alliance. The smart phone application lets drivers automatically update the status of their respective trips in the Sylectus system, eliminating the need for drivers to notify dispatch operators of their arrival or other key trip information. Sylectus Mobile also provides the ability for drivers to take a picture of important trip documents (BOL, POD) and upload those directly into the Sylectus imaging program, thereby improving billing and payroll processes. The adoption of Sylectus Mobile platform has been significant, even though it is only early in the BYOD life cycle.
The benefits of the BYOD are many. Here are just a few our customers have seen since implementing Sylectus Mobile:
- Ease of use – drivers who own smartphones already know how to use the device and the applications follow simple touch screen standards.
- Ease of installation – Simply download the “free” application from the server.
- Ease of update – As new features are added, they can be downloaded and deployed by the driver.
- Any device/single device – There is no restriction on style or type of device. It also eliminates the need for laptops or other in-cab technology.
- Cost savings – The driver has already invested in the hardware and potentially the data plan.
- Internet access – The internet is becoming more prevalent, meaning the technology works in more places.
- Mix and match toolset – Drivers can add tools provided by many suppliers on a single device.
- Reduced loss / damage – If the driver owns the device, they are more likely to take better care of it, hence reducing the likelihood of it getting lost, stolen or damaged.
BYOD is still in its infancy in the trucking industry, so we can expect this technology platform to deliver more value in the future.
2013 In Review
Within the trucking companies that Sylectus supports, we have seen significant increases in collaboration among our Alliance members and further investments in technology to support the two key employee groups, drivers and dispatchers. Even though carrier is capacity currently below 2007 levels, our carrier customers have still managed to increase their freight volumes by using the elasticity of supply within the network.
2013 was a “stable year” in terms of freight volumes across North America as supply and demand was relatively balanced. As a result, rates remained flat compared to 2012. However, something has to give. Equipment costs have gone up. Fuel costs have gone up. The costs of maintaining regulatory compliance have gone up. Yet rates and driver pay have maintained the status quo. With the driver shortage looming and inventory levels stable, any increase in freight demands will push supply above demand and “good” drivers will become the main element of succeeding in trucking. This will likely mean increased line haul rates and increased driver pay.
Looking Forward to 2014
As I mentioned previously, supply (drivers) and demand (freight) will continue to be the basic building blocks upon which a successful trucking company is built, and the way trucking companies equip their drivers and dispatchers, ideally with the right tools and technologies, will determine their success. While web-based technology has already become a great asset, I expect there will be more collaborative tools delivered in 2014. In particular, I expect to see major developments in BYOD solutions available to drivers in the coming years.
