Regulations
From hours-of-service to E-log devices to fuel emission requirements, government rules dictate almost everything about operating a truck. Most of the rules are designed to make trucking safer, but they also create a lot of red tape and extra expense for drivers and fleets.
Fuel Savings
Although diesel prices are currently low, saving on fuel and increasing fuel efficiency remain priorities for fleets of all sizes. Fuel card programs are one solution, providing discounts on diesel and many other services for trucking companies.
Cash Flow
Trucking fleets may wait as long as 60 to 90 days to get paid by brokers and shippers. This extended cycle can drain a fleet’s cash flow and limit growth. Factoring—also called “accounts receivable financing”—turns fleets’ invoices into cash in less than a day, quickly building up their working capital.
Driver Retention
There is a shortage of 48,000 truck drivers nationwide. Meanwhile, driver turnover rates are nearly 100%. To recruit and retain drivers, many fleets are boosting salaries, improving benefits and offering performance bonuses.
Driver Health
Truck drivers are twice as likely as other workers to be obese, have diabetes and not have health insurance. Poor health also puts drivers at risk for sleep apnea and other disorders. Recently, organizations like Rolling Strong, the Truckload Carriers Association and many trucking fleets have launched programs promoting better driver fitness.
Safety
Accidents and fatalities have increased in recent years as more trucks and other vehicles share the highways. New “sensing” technology that helps trucks avoid collisions should help reduce the number of accidents in the coming years.
Infrastructure
Recent studies rank the United States’ highway infrastructure as 16th among developed countries. Without more public funding for roads and bridges, there will be more accidents, more delays and less profit for trucking companies in the future.
Solution:
Using Transportation and Network Optimization for Continuous Improvement
With the mounting challenges in the industry, it can be difficult for supply chain and logistics professionals to even know where to start to make the right improvements within their transportation network. Many of the world’s leading companies are finding results by implementing a transportation and network optimization strategy.
Building a Baseline Model
Before organizations can select what strategy will have the most impact on their business, it’s important to first establish a baseline model to assess the current-state. By utilizing detailed data, often down to the SKU level, of the actual transportation network teams can build a living model of their network, easily updated and consulted for the most up-to-date and accurate view.
Consider alternate modes of transportation or the use of private fleets
Despite the logistical challenges a vendor is facing, consumers still need their goods. In order to meet service levels, organizations can expand the modes from truckers to air, ocean or rail.
Additionally, companies may also consider right-sizing your inventory in order to meet desired service levels at the lowest possible cost. This can not only address the capacity challenges, but also result in significant cost savings. Private fleets can also serve as a cost effective alternative.
Use modeling technology to run what-if scenarios to test various strategies before implementation
Through the confines of your baseline model, you can test the effects of some of the strategies discussed by running “what-if” scenarios. This allows modelers the freedom to assess the impacts of various strategies prior to implementation in a risk-free environment separate from real-world practices. This empowers modelers by allowing them to accurately analyze potential network configurations and provide predictions of performance, making it easy to gain buy-in for a new strategy.
Adopt transportation modeling as an ongoing business process
While using transportation network modeling on a project basis is helpful and a great way to get started, the most long-term and impactful benefits arise out of adopting transportation optimization as an ongoing business process. These provides organizations a long-term view of their transportation network and the ability to track historical trends. Businesses can also access the living models to mitigate risks and engage in long-term planning.
Many of the world’s leading companies, including our SummerCon panelists, have many of these strategies in place today. Don’t miss this great session to hear about these strategies in action, best practices and more.
To learn more about SummerCon, visit www.summercon.net and follow the conference on Twitter with #SCon15.