Over the last decade, the freight industry has witnessed pressure bearing in on the ecosystem, primarily due to the ‘Amazon effect’ on logistics, which has raised customer expectations regarding delivery speed and visibility, and in general, pushed businesses to adopt technology that automates specific segments within complex distribution operations.
“However, aside from the Amazon effect and cost-saving needs, the industry is also under pressure from factors like the growing regulatory mandates to be sustainable and minimize carbon emissions,” said Will Salter, CEO and president of Paragon Software Systems.
There are other localized restrictions in the context of regulations. For instance, drivers used to clock more hours behind the wheel before the ELD mandate, which includes iron-clad rules on the stipulated hours of service per day. That apart, the increasing frequency of traffic bottlenecks has led some cities to restrict the entry of trucks of certain sizes – which can affect routing and thereby the functioning of fleets.
Salter pointed out how technology can help drive incremental changes to truck operations. “For example, you might have a distribution operation with separate trailers and drivers, and then you’d have to take the availability of those drivers into account. Automation software can take the data feed from driver tracking systems that contain information about the hours that drivers are available to work, which is then used to define routing and scheduling,” he said.
This helps fleets to better understand the actual number of drivers available to take up a job, instead of a generic pool of resources that might not account for the number of hours drivers are left with in their daily hours of service.
“The objective of routing technology is to put together the best combination of drivers, tractors and trailers, based on the constraints of daily operations. The constraints could be anything – driver hours, specific delivery time windows, loading rates, or even accessibility to delivery sites,” said Salter. “The system will look at every resource in parallel and work out the best combination of resources to meet the requirements of daily operations.”
Eventually, the idea is to reduce operational costs while also minimizing the use of available resources, especially in times when fleets are finding it hard to attract and retain drivers. The trucking industry is finding it difficult to attract millennials into the field. This is partly due to the record low unemployment levels in the country over the last decade, with people opting for work that does not ask them to be away from home for extended periods of time.
The problem has only compounded with the introduction of strict hours of service rules and the ELD mandate.
Technology is also helping brick and mortar storefront chains to embrace digitalization and be competitive against bigger ecommerce platforms. Salter spoke of the U.K.-based retailer Argos, that transitioned from being a brick and mortar storefront to offer same-day delivery on products. “Argos now has a clever combination of a brick and mortar operation and a home delivery operation. People can go online, and if they order something before 6:00 p.m., they can expect delivery on the same day,” said Salter.
“Managing customer expectations is something that requires a clever use of technology. Delivery companies need to meet challenges – both physical and legal, manage delivery time windows, expedite delivery and yet keep an eye on operational costs. It really is a challenging time to be a trucking fleet today.”