MISSISSAUGA, Ont. – Shippers are demanding greater visibility of their freight movements, and more advanced technologies from their trucking providers.
That was a message from carrier executives who participated in a shipper-carrier roundtable at the Surface Transportation Summit Oct. 11.
Eric Warren, vice-president of business development with Hercules, said eight of the company’s 500 staff members are in information technology (IT) and he feels the trucking company he runs is as much a technology company as it is a trucking provider. Mike Ludwick, chief administrative officer for Bison Transport agreed.
“We are seeing a much more educated buyer of freight services than we ever have,” he said. “They have lots of information and they want a whole bunch more. The key factors they’re looking for are reliable capacity and freight visibility.”
Many shippers are now demanding deliveries be made within 10- to 15-minute windows, noted Warren, which is especially challenging in an LTL environment.
Hercules has been adapting by equipping its drivers with handheld devices, so they can handle more of the transaction than in the past.
“We’ve been trying to get more functions done by one person,” Warren said. “The driver at the point of delivery is getting the receiver’s name entered into the handheld. It’s one less job that has to be done when the delivery receipt comes back to the terminal.”
“The pull of technology in our business is really powerful,” added Ludwick. “Our IT group is growing faster than any other part of our business…We are concentrating on self-service tools for our drivers to give them access to the information they want, when they want it, where they want it.”
Bison noticed some time ago that every new hire already owned a smartphone, and wanted to use it. So, the company is providing tools to allow drivers to access information on their own devices.
“Our hope is that it also has the side effect of maybe widening the (pool) of people interested in our business,” he said. “We have technology in the truck, and in the handheld, and in the cab, that can make the job more interesting and better and maybe that gets us a new candidate into the truck.”
Buy implementing technology is easy, Warren noted, properly utilizing it is the challenge. He cited trailer tracking as an example.
“Buying the stuff is a stroke of the pen, that’s the easy part. Wringing every possible dollar out of the investment is tough to do.”
There was no adversarial tone to this year’s shipper-carrier roundtable, with carrier representatives suggesting downward pressure on pricing seems to be easing. Carriers also reported strong demand for their services.
“It’s been refreshing for us, the last little while, that shippers are much more interested in having a conversation on how we can work together to take waste out of the system,” Ludwick said. “We are happy to have those conversations and hope they can make both our businesses more efficient.”
He noted the cost of trucking has gone up substantially in recent years, and rates have not kept pace.
“The spot rate in the trucking market is less this year than it was in 2014,” Ludwick said. “That is just not sustainable for fleets. It has started to change in the last quarter or two.”
Anna Petrova, senior supply chain leader with Ferrero, said most discussions she has with carriers center around efficiency, not price.
“How can we create more efficiencies together?” she pondered. She welcomes the upcoming electronic logging device (ELD) mandate, as the devices could help to identify where in the supply chain waste exists.
“Hopefully carriers will understand waiting times, and it can become a fact-based conversation, which in the end can also save shippers some money,” she said.
Hugh MacDonald, director, logistics and distribution with Wajax, agreed.
“When a carrier does come in and talk about a rate increase, we know wages are going up, we know there are costs associated with maintaining good people, we know there are equipment costs, technology costs. It goes back to efficiencies and how we can understand how to help each other out,” he said.
MacDonald and Petrova both said they’re not concerned about the impending ELD mandate affecting their ability to find trucks to move their loads.
“I do not anticipate that to disrupt us in a negative way,” Petrova said. “We deal with large companies like Bison, and it’s something they know how to deal with.”
But carriers on the panel said not everyone is ready for the mandate, and it will put pressure on capacity.
“There’s going to be a capacity crunch based on strong demand and the ELD, and we think it’s time for it,” said Ludwick.
In an LTL environment, Warren said ELDs will help identify shippers that are slow to load or unload.
“We are able to track everything and bring this information to the customer. Previously, drivers may have written it down or passed it along to dispatch. Now, it’s very exportable, in a format you can give customers and have a meaningful conversation about,” he said.
“The ELD mandate raises the spotlight on driver time,” Ludwick added. “If we are doing something in our network that wastes drivers’ time, we’re going to have to change that. I think that’s a really good thing and it makes the profession less sensitive to all the things that are outside the driver’s control.”
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at email@example.com or follow him on Twitter at @JamesMenzies. All posts by James Menzies