Executive View: Help From Above

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MT: It has been a challenging couple of years for communications providers. How does the market look at the moment? Are fleets investing again in technology purchases?

Wolfe: Even though it probably has been a tough two years based on what everybody had planned, we did have a very good year in 2002. We ended up shipping our 450,000th unit. I think we have held ourselves quite well and have positioned ourselves where we need to be from a homeland security perspective. In terms of what lies ahead, one of the ways we tell how the overall economy is going is by how many units are on the air – how many trucks are actually messaging – and we’ve seen that increase over the last several months. That’s a good trend. The amount of messaging is going up too, which tells you there are more shipments going on, which is another good trend. And we’ve seen existing customers starting to take more units, which tells you that the trucks that were on the fence are coming back into service. Across the board, I wouldn’t say it’s a groundswell but it’s definitely improving.

MT: Security concerns, of course, have taken centre stage since the 9/11 terrorist attacks. You testified recently at a Congressional hearing on intelligent transportation systems. In your view what role should ITS play in ensuring that we have both security and productivity?

Wolfe: Transportation as a percentage of shipper costs has shrunk for a variety of reasons over the last 20 years. Some of that was due to increased competition but a lot was done through visibility and speed. When business went to JIT and rapid replenishment, it put a lot of the inventory on the road and it needed in-transit visibility. And that’s where our solutions have focused since their inception. Technologies already deployed – for example, we have over 260,000 units on the road at any given time in the U.S. (and Cancom Tracking Solutions, which represents Qualcomm in Canada, recently installed its 26,000th unit) – for a minor cost addition can have pretty extensive security capability. Our goal is to make sure the government agencies, our customers and the industry all know and understand what is currently possible and what is the potential.

MT: From what you see among your private and for-hire carrier clients has there truly been a shift in focus towards investing in security-related technology products?

Wolfe: We have some customers who have been very aggressive on their own, utilizing our system to improve cargo security. There are ways to use our system that can enhance their abilities to react. We see individual customers going out on their own and implementing unique ways of using our product and being very successful at it by lowering their overall incidents of theft and other such situations. We introduced into our product line some tamper resistant capabilities in 2001 and we now have a variety of customers using them. The key is the Federal Motor Carrier Safety Administration (FMCSA) in the U.S. put out for a test of security features. Qualcomm is the technical integrator on that bid. We are in the process of working with shippers, customers, the trucking associations as well as the FMCSA on defining the test and the scenarios to be tested and the technologies to be tested. We are at the beginning point of execution. The scenarios are all known and we are actually well engaged in getting the fleets equipped with the new technologies. The bottom line is hijack prevention technologies for a variety of applications — tamper resistant wiring, the ability to shut the truck down over the air, driver authentication, that’s just a sampling.

MT: What should carriers expect to see in terms of security features in the near future?

Wolfe: Wireless panic button, tamper resistant capabilities, over-the-air vehicle control capabilities we are actively working on and working to get into production. We are also looking at geo-fencing by route or location, which would tell dispatch when a vehicle is entering or leaving a location or goes off route.

MT: I understand that you have gained experience working with fleets in South America, which need to be more security conscious. Can you elaborate on what fleets there are doing that could be brought into the North American market?

Wolfe: The genesis for many of the capabilities we are currently testing are those technologies actively in use in Brazil today. The ability to shut down the vehicle over the air, geo-fencing, out-of route monitoring, tamper resistance, locking and unlocking the trailer doors remotely, which has some unique applications for Customs control. If you can lock a trailer at the point of origin and know it hasn’t been unlocked it changes things dramatically. Customs officials would have the authority to unlock the trailer at Customs points and then it would be locked again until it got to destination, which would help deter cargo theft and in hijack prevention.

MT: A large part of the reason for investing in mobile communications remains to improve efficiencies within a fleet. What are you looking to add to your product that helps fleets to continue improving efficiencies?

Wolfe: We have quite a big investment with a product called FleetAdvisor. FleetAdvisor is a suite of features, one is automatic arrival and departures, another is jurisdictional line crossings that automates fuel tax reporting and the third one is driver hours of service. The initial target market for that product is the private fleet segment and we are going to be rolling that out in the U.S. this year and we are working with third parties for some Canadian options that can also run on that new platform. We have a new capability inside the cab called the MVPc and that product can run our software or other peoples’ software.

MT: It would seem a good strategy during tough times to get greater use of existing systems. Are you seeing that with your customers?

Wolfe: Absolutely. In fact a lot of our customers talk to us about how to get more utilization out of our system and we work with each customer to further develop what they have in mind. We have customers, for example, that know when their trucks are in areas of high risk for cargo theft. They have an internalized process for monitoring the truck as it enters the area and procedures for the driver to follow which utilize wireless technology. As the truck enters the area they start positioning it a lot more frequently and the driver checks in more frequently.

MT: With the Container Security Initiative the U.S. has placed a great emphasis on reducing the risk associated with containers moving into the U.S. However, it’s impossible to adequately search the majority of containers. Is a technology solution viable?

Wolfe: We are working with SAVI Technology. I’m actually on their strategic technology council and we are working to integrate our two products for that specific purpose. Basically they have a wireless seal for the container as well as their RFID technology for inventory management and we are working with a lot of the ports on using wireless seals and inventory tracking and tying that in to our mobile tracking product for the linehaul.

MT: You recently signed on Frito-Lay. Are you seeing increased interest from private fleets, and in particular small and medium-sized fleets, in mobile communications?

Wolfe: Some private fleets have been on the leading edge for some time. I think you are seeing the interest level growing with the small- and medium-sized private fleets. Everyone is trying to drive costs out of the system and it gets back to are they using their assets wisely? I think the ROI is there. The hurdle private fleets have historically had is that the fleet is actually not the business. It’s an internal issue within those companies of where they are going to spend their dollars.

MT: What are private fleets looking for in terms of options?

Wolfe: It’s a different operating model. Private fleets focus primarily on customer service to their stores and DCs. So things such as empty miles aren’t quite as critical. They are also very sensitive to the fact tha
t their name is on the trailer so they will emphasize safety and regulatory compliance to a higher degree. Integration with their back office systems – ERP, WMS, dispatch. We pride ourselves on being at the leading edge of integration.

MT: There are several technologies and combinations of technologies competing for market share in the market right now. Is this making for confusion in the marketplace?

Wolfe: I think there has been confusion in the marketplace for quite a long time. We believe the ubiquitous coverage provided by satellite is needed for specific applications. Schneider the day of the terrorist attacks was able to get hold of every one of its trucks and reroute them out of Manhattan. You could not do that on the terrestrial networks at that time because they were overloaded. That’s real.

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