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TRANSCRIPT
White Pap
er
How to Maximize Trailer Utilization and Reduce Dormancy
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Contents
Executive Summary 5
Introduction 6
Purpose 6
Trucking Industry Background 6
Trucking Industry Challenges 6
ProvenBenefitsofTrailerManagementSystems 7
HistoryofTrailerManagementAdoption 7
DivergentGoalsofCustomersandCarriers 8
Industry Challenges in Detail 9
InefficientTrailerUtilization 9
Excessive Trailer Pool Size 9
Current Practices 9
Built-In Bias “Pads” the Size of Trailer Pools 10
LackofAccurate,TimelyInformation 10
Obstacles to Manual Data Collection 10
Data Reliability 11
PoorDriverProductivityandSafety 12
Low Driver Morale and High Turnover 12
IncreasedTheft 12
PoorBack-OfficeandFieldStaffEfficiency 13
Trailer Tracking as a Solution to Industry Challenges 13
Improved Trailer Utilization 13
Optimal Trailer Pool Size 14
Accurate,TimelyInformation 14
ImprovedDriverProductivityandSafety 15
Improved Driver Morale and Retention 15
ReducedLossesfromTheft 15
ImprovedBack-OfficeandFieldStaffEfficiency 17
TheImpactonTrailerRentalstoCarriers 17
How to Evaluate Trailer Management Providers 18
Conclusion 20
ContactInformation 20
References 21
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AdoPtion of untethered trAiler mAnAgement systems
provides a competitive advantage to carriers and vendors that rent trailers.
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Executive SummaryAsbusinessesoperatinginthecapital-intensive,low-profit-margintruckingindustry,carriersbenefitfinanciallybyadoptingwirelessuntetheredtrailermanagementsystems.Withoutuntetheredsystemsinplace,carriersfacethefollowingchallenges:lackofaccurate,timelyinformationabouttheirtrailers(includinglackofcargovisibilitywhentrailerssitidleorintransit on rail cars); poor trailer utilization; excessive trailer inventories; inability to charge customersaccuratelyfortrailerdetention;losttrailers;anincreaseincargotheftandassociatedcosts;reduceddriverandback-officeproductivity;increaseddriverfrustrationandturnover;wastedresources;andpoorcustomerservice.
Thenumberofinstalleduntetheredtrailermanagementsystemshasgrownrapidly—from100,000unitsin2003toover415,000unitsbythecloseof2006and600,000unitsexpectedbytheendof2009.Associatedrevenuesareexpandingaswell.Thisrapidadoptionofuntethered trailer management systems is a response to widespread awareness that these systemsofferthefollowingbenefits:
Consequently,adoptionofuntetheredtrailermanagementsystemsprovidesacompetitiveadvantagetocarriersandvendorsthatrenttrailers.Concernsaboutinvestmentsinuntethered management systems can be addressed by evaluating untethered system providers using the followingcriteria:adequacyofcustomerserviceresources;financialstability;abilitytoprovideadjunctprofessionalservices(suchassystemintegrationandtailoring);trackrecord;truckingindustryknowledgeandcommitment;technicalexpertiseinwirelessinformationtechnologies,hardware,software,andinformationtechnology(IT);systemrobustness;networkserviceavailability and assurance; and a willingness to act as a trusted partner by employing suitable processesandtechnologies.
• Accurateandtimelyinformation (includingincreasedknowledgeofwhen and where trailers are dropped and unloaded)
• Reductionintheneedforphysicalcountsoftrailersinayard
• Improved trailer utilization
• Improvedtrailerpoolsizingforeachcustomer
• Reductioninthesizeoftrailerfleets (capitalcosts)
• Improved driver productivity andsafety
• Improved driver morale and retention
• Quickerdetectionandrecoveryofstolen trailers and loads
• Reduction in costs associated withtheft
• Increased dispatcher productivity
• Increased ability to generate accurate reportstodeterminedetentionfees
• Improved planning
• Improved customer service
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IntroductionPurpose
Thiswhitepaperexplorestheapplicationofwirelessuntetheredtrailermanagementsystemswithinthetruckingindustry.Afteridentifyingkeypracticesandindustrychallengesfacedby carriers,thepaperidentifiesthebenefitsobtainablebyinstallinguntetheredsystems.
trucking industry Background
Thetruckingindustryiscapitalintensive,anditoperatesonalowprofitmargin.Inaddition toback-officeexpenses,whichareincurredbyanytypeofbusiness,carriersincursignificantcapitalcostswhenpurchasingtractors(cabs)andcargotrailers.Mostcarriersownmoretrailersthantractors,anda3:1ratiooftrailerstotractorsisnotunusual.Sincemostcarriershavenetprofitmarginsrangingbetweenoneand3.5percent,theconceptoftrailermanagement—achievedthroughtrailertrackingsystems—offerssolidfinancialbenefits.1
Carrierscanbesegmentedintodistinctcategories,andeachusestrailersdifferently:
• less than truckload (ltl).Trailersinthesefleetsusuallycombineanumberofless-than-truckloadsizedloadsfordifferentcustomers,andthedriverspickupanddropoffeach oftheseloadsinmultiplelocations.Driversoftenmakeuseofcross-dockingfacilitiestodistributeandcollectthesesmallloadstoandfromothertrailers.
• Private.Privatecarriershaultheirownproductsandtrailersinsuchfleetsareusedinwaysthatsuittheirowners’interests.
• truckload.Althoughtrailersinthesefleetsmayservemanydifferentcustomersoveraperiodoftime(regionallyornationally),eachdiscretetruckloadofcargoiscarriedforasinglecustomeratatime,andtheentireloadisusuallytransportedfromonepointtoanother.
• tanker.Thesetrailershaulonetypeofproduct—suchasfuelorchemicals—andresemblethetruckloadcategoryinsomeways;however,theratiooftrailerstocabsislowerthaninthetruckloadcategory(therearenotasmanyfreetrailersforeachcab).
• Package.Trailersinthesefleetsresembletheless-than-truckloadcategoryinsomeways,butthenumberofpick-upanddrop-offlocationsismuchlarger.
trucking industry Challenges
Withoutuntetheredtrackingsystemsinplace,carrierstypicallyfacethefollowingchallenges:2 lackofcargovisibilitywhentrailerssitidleorintransitonrailcars,losttrailers,anincreaseincargotheft,reduceddriverproductivitywhilewaitingfororfindinganemptytrailer,increased driverfrustrationduetotimespenthuntingfortrailers,inabilitytochargecustomersaccuratelyfortrailerdetentionbecausecarrierscannotdeterminewhentrailersareloadedorunloaded,wasteofemployeeresourcestrackingdownlosttrailers,andtheneedtomanuallyupdatethelocationoftrailersonadailybasis.
Thesourceofmostofthesechallengesisalackofdetailedinformationaboutacarrier’strailers— inparticular,wheretheyarelocated,whethertheyareloadedorempty,andiftheyaresecure.Mostofthesechallengeshaveadirectimpactonproductivityandtheefficiencywithwhichthetrailersgeneraterevenue.
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Proven Benefits of Trailer Management Systems
Untetheredtrailermanagementsystemsprovidearemedyforthemanychallengesassociatedwithalackofspecific,timelyinformationabouttrailers.Therapidadoptionofuntetheredtrackingsystemsisaresponsetowidespreadawarenessthatthesesystemsofferproven benefitsincluding:
• Fasterdetectionandrecoveryofstolentrailersandloadsandareductionin associated insurance costs and other losses
• Increasednumberofloadspermonthcarriedbyeachtrailer
• Reductioninthesizeoftrailerfleetsofupto20%accordingtosomeestimates
• Reductioninthenumberofdispatchersandback-officeadministrativepersonnelneeded
• Reductionintheneedforphysicalcountsoftrailersinayard
• Increasedknowledgeofwhenandwheretrailersaredroppedandunloaded
• Increasedabilitytogenerateaccuratereportstodeterminedetentionfees.3
History of Trailer Management Adoption
Inthe1980s,beforewirelessuntetheredtrailertrackingsystemsweredeveloped,trackingwaslimitedtotetheredsolutions.Thesetetheredsolutionsconsistedofanin-cabterminal equippedwithaglobalpositioningsystem(GPS)receiverlinkedtoaserviceprovider’snetworkoperationscenter.Toprovideatetheringfunction,thein-cabterminalwaslinkedtothetrailer,wheresensorsprovidedbasicinformationaboutthetrailer’sstatus.Consequently,whenatrailerwasunhookedfromacab,thetrailertrackingfunctionwaslost.
By2003,serviceproviderswereofferingindependent,untetheredtrailermanagementsolutions.Nolongerreliantuponatetheredconnectiontoanin-cabterminal,theuntetheredsolutionsplacedallofthehardwareinsidethetraileritself.Equippedwithanindependentpowersource,GPS,andlinkstoanetworkoperationscenter,theseuntetheredsolutionsalsoprovideddataaboutthestatusofatrailer—includingwhetheritwasloadedorunloaded,connectedtothecabordisconnected,orhadopenorclosedcargodoors.
since there were more than 4 million trailers in the u.s. at
the close of 2006 (not including owners of single trailers),
trailer management systems are only beginning to have
an impact on the industry.
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Theuntetheredtrailermanagementmarketisexpandingrapidly.Fromaninstalledbaseof100,000unitsin2003,4thetotalreached415,000unitsattheendof2006andisexpectedtoreach600,000unitsbytheendof2009.5 Since there were more than 4 million trailers6 in the U.S.atthecloseof2006(notincludingownersofsingletrailers),trailertrackingsystemsareonlybeginningtohaveanimpactontheindustry.
Divergent Goals of Customers and Carriers
Inthetruckingindustry,thedivergentgoalsofcustomersandcarriersareachiefsourceoffriction.Carrierswishtomaximizeprofitsbykeepingthelargestpossiblepercentageoftrailers fullofcargoandmovingovertheroad.Theycannotmaximizeprofitsifdriverssitidleatshipmentlocationswhiletrailersareunloadedorloaded(a“liveload”scenario).Thedetentionfeeschargedforthiswaitingperioddonotequalthelostincomethatwouldhavebeengeneratedbyhaulingcargo.Consequently,forcarriers,an“ideal”scenarioisoneinwhichthedriver(1)pullsintoacustomerfacilitytomakeadeliverywithatrailerfullyloadedwithcargo,(2)unhookstheoriginaltrailer,(3)immediatelyhooksupanewtrailerthatisalreadyloadedwithcargo,and(4)pullsoutofthefacilitytomakethenextdelivery.
Customerswishtominimizeoverallshippingcosts.Whiletheymaysharethecarriers’favorable assessmentoftheidealscenario(describedabove),customerssometimesunintentionallyincreasecarriercosts.Forexample,acustomerwillreceiveashipmentofrawmaterialsthatmustbere-distributedtoseveralseparatedestinations.Ifthecustomerleavesthematerials intheoriginaltrailerinsteadofunloadingthecargointoanearbywarehouseuntilothertrailersarrivetohaulitaway,thecustomeris—inessence—usingthetrailerasawarehouse.Thishelpsthecustomertoeliminatethecostofunloadingthetrailer,butitharmsthecarrierbecauseitpreventsthecarrierfromusingthetrailertomaximizeitsprofitbyhaulingadditionalcargo.
increase in untethered trailer monitoring units
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Industry Challenges in DetailInefficient Trailer Utilization
Trailerutilizationisameasurementthathelpstodeterminehowefficientlytrailersarebeingusedtogenerateprofitsforcarriers.Utilizationcanbemeasureddailyoroveralongerperiod oftime,butitusuallyincorporatesthetotaldollarsearnedannuallybythetrailersinafleetdividedbytheoriginalcostoftheequipment.Sincetrailersearnmaximumrevenuewhentheyarebeingusedtohaulfreight,carriersnaturallywishtoincreasethistypeofutilization.Similarly,carrierswishtoquantifytheamountoftimethattrailersaredetainedbyeachcustomersothattheycanlevyaccuratedetentionfeesasasecond-bestwaytogeneraterevenue.Finally,carrierswishtoquantifytheamountoftimethattrailersaresittingidle andunused.
Oneofthemostimportantchallengestocarriersisachievingthemostprofitableutilizationprofilefortheirtrailers.Itisimpossible,however,toimproveutilizationandtodeterminethefleet’sreturnoninvestment(ROI)withoutaccurateinformationabouthowthetrailersarebeingusedbyeverycustomer.TrailerutilizationisanimportantfactorindeterminingwhetherinventoryisgeneratingasufficientROI.AninadequateROImeansthataparticulartrailerortrailerpoolisonlycoveringitsoperatingexpenses—notcontributingtoprofitability.So,intheabsenceofdetailedinformationprovidedbyuntetheredtrailertrackingsystems,carrierscannotaccuratelyassesstheirROI.
Excessive Trailer Pool Size
Current Practices
Carrierstypicallymakeavailabletocustomersapooloftrailerstofacilitateasmoothflowofshipmentsinandoutofayard.Onegoalistoreducethenumberofinstanceswhendriverswastetimewaitingforcargotobeloadedorunloaded(theliveloadscenario).Instead,drivers candropoffonetrailerandpickupanother—whetherfullorempty—asdescribedpreviously intheidealscenario.Thisallowscustomerstomakegooduseofthetrailersbyloadingsomeoftheminpreparationforpickupsandunloadingothersafterdeliveriesaremade.Asaresult,customers can use their loading crews as needed throughout the day without worrying about runningshortoftrailers.
Theavailabilityofapooloftrailers,however,doesnotalwaysresultinawin-winsituation.Ifthetrailerpoolistoosmall,itwillnotserveitspurpose,anddriverswillhavetowaitforemptytrailersuponarrivingatadestination.Also,ifthetrailerpool,whichrepresentsacapitalcosttothecarrier,istoolarge,thecarrierwillsufferfromalowerprofitmargin.Ineithercase,itisimportanttodeterminethe“right”sizeforacustomer’strailerpool.Todoso,thecarrierneedsaccurate,detailedinformationabouttrailerutilization.Withoutanuntetheredtrailermanagementsystem,thisinformationisdifficulttoobtain.
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Built-In Bias “Pads” the Size of Trailer Pools
Trailerpoolsmadeavailabletocustomersareusuallytoolargeandtheirsizecannotbejustified bytherevenuestheygenerateforthecarrier.Threefactorscontributetothispractice:
• Customersplayaroleinpaddingthesizeoftrailerpools.Whencustomersneed40trailerstoaccommodatetheirshippingvolume,theytypicallyaskformoretopreventashortage.Theymayrequest50trailersinsteadof40—sometimesinanticipationofshort-livedbusinesspeaksthatrequiremoretrailers.
• Carriersthemselvesareresponsibleforthenextincrementofpadding.Whentheyreceivearequestfor50trailers,theymayaddanother10trailersjusttobesurethattheneedsoftheircustomersaremet—providing60trailersinsteadof50.
• Thelackofaccurateinformationabouthowmanytrailersarelocatedatthetrailerlotsofeachcustomercontributesyetanotherlayertotheoversupply.Thenumberofforgottenidletrailersatanylocationaddsup,andevenifthisfigureisaslowas10percentofthetotal,itrepresentsanadditionalsixtrailers(inthisexample)—bringingthetotalnumberofavailabletrailersto66.
Asaresult,26ofthe66trailerscitedinthisexampleareunnecessary.Theseextratrailersareadrainoncarrierresourcesbecausetheyareacapitalcostthatfailstogenerateprofits—anexampleofpoorassetutilization.Equallyasbad,othercustomersmayneedthesetrailers.Withoutdetailed,accurate,timelyinformationaboutthelocationandstatusofeverytrailer,carrierscannotdetermineanoptimalsizeforeachcustomer’strailerpool.
Lack of Accurate, Timely Information
Obstacles to Manual Data Collection
Withoutanuntetheredtrackingsystem,manualdatacollectionistheonlywaytogather informationaboutthetrailersinayard—identificationnumbers,ownership,andstatus (fullorempty).Thetaskofgatheringthisinformationmanuallyisfraughtwithobstacles:
• expense.Physicalchecksofthetrailersinayardarelaborintensiveandexpensive,whichresultswithyardmanagershavinglittleincentivetoconductthemregularly.
• Lack of timeliness.Evenifyardmanagersarediligentaboutconductingphysicalyardchecks,thesituationintraileryardschangesminutebyminuteastrailersmoveinandout.
• inaccuracy.Manualdataentryissubjecttohumanerror.Iftheindividualswhoenterdataarecarelessorforgettomakeentriesabouttrailerdepartures,whotakesthem,ortheirstatus,theinformationinthedatabasebecomesobsolete.
Trailer utilization is
an important factor in
determining whether
inventory is generating a
sufficient ROI. An inadequate
roi means that a particular
trailer or trailer pool
is only covering its
operating expenses—
not contributing to
profitability.
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• Lack of interest. Independent trailer yard managers may have only a marginal interest in keeping accurate records throughout the day or when they conduct yardchecks.Additionally,managersofcustomer-ownedyardsmayactuallyhavean incentive nottokeepaccuraterecords.Afterall,itmaybeadvantageousforcustomerstoretainmoretrailersthannecessary.Finally,whendriversareaskedtoconductyardchecks,theymaynotbereimbursedsufficiently—leadingtofrustrationandunwillingnesstodoathoroughjob.Forexample,driversmaynotwishtoleavetheir cabs and may not see trailers parked behind other trailers which leads to under-reportingandotherwiseincorrectreports.
• strained customer relationships.Whencarriersaskcustomerstoconductyardchecks,itcanplaceastrainontheirrelationship.Fromthecarrier’sperspectiveitisawkwardtoaskforafavorfromsomeonewhoispayingyouforaservice.Fromthecustomer’sperspective,itisanunwanted—andunreimbursed—task,anditplacesthe customer in a position where an accurate report may not be in his or her own bestinterests.
data reliability
Manually recorded data is most accurate when it involves trailers that are currently attached totractors,whentrailersareintheshopforrepairsormaintenance,andwhentheyarebeingtransportedonrailcars.Otherwise,thedataissubjecttothelimitationsdescribedearlier.
Location of Trailer When data is Collected
data Accuracy
Accurate not Accurate
in a carrier lot x
in a customer lot x
in a rent-based storage yard x
hooked to a tractor (cab) x
In the shop for repairs or maintenance
x
on a rail car x
Summary of Manually Recorded Data Reliability
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Poor Driver Productivity and Safety
Aftermakingadeliverytoacustomer,thedrivermustfindanemptytrailertoreplacetheonethatwasdroppedoff.Ifthereisnountetheredtrackingsysteminplaceorifthemanualsystemisnotaccurate,thedrivermustengageinatime-consuminghunt—physicallycheckingeachtrailerinthelotuntilanemptyoneisfound.Ifanemptytrailercannotbefoundthere,thedrivermayrepeatthehuntinanotherlot—perhapsdiscoveringmuchlaterthatanemptytrailerhadbeenwaitingatathirdlocationallalong.Duringthishunt,thedriverdoesnotgenerateanyrevenueforthecarrierandburnsexpensivefuel.Ifthetrailerhuntconsumesaslittleastwohoursperweekduringa48-weekyear,thelosttimeaccumulatesatarateof$13.80perweekpertruck(assumingcarrierchargesof$1.50permileat45milesperhourandadriverpayscaleof$0.33to$0.50permile)—reaching$662inlostrevenueeachyear.Thisamountiscompoundedforeverydriverinafleetandmustbesubtractedfromthe carrier’sgrossprofitmargin,whichisusuallyabout10percent.
Inadditiontolostrevenue,thetimespenthuntingfortrailershasotherimplications.Forexample,whilethetimespenthuntingmaynotalwaysbesubjecttoFederalMotorCarrierSafetyAdministration(FMCSA)regulationsthatgovernhoursofservice,thedriverscouldhavebeenrestinginsteadofhunting.Theresultantfatiguemayhaveanegativeimpactondrivingperformancefortheremainderoftheworkshift.
low driver morale and high turnover
Becausetheyarepaidonlyforeachcargo-haulingmile,driversareacutelyawareofthe efficiencyofcarriers’businessoperations.Whensidetrackedbyhuntsfortrailers,theyknowthattheyarenotearningmoney.Asaresult,theymayfeelthattheyarepayingapersonalpriceforacarrier’slackofefficiency—underminingmorale.Justasimportant,itisnaturalfordriverstoresentchronicsituationsoverwhichtheyhavenocontrolbutforwhichtheypayaprice.Undersuchcircumstances,itisnotsurprisingthattheykeeptrackofwhichcarriersenablethemtoearnthemostmoneyintheleastamountoftime.Theyunderstandwhichcarriersmakethebestemployers,expressedinstatementssuchas,“CarrierAwillkeepmemoving.”Consequently,carriersthatdonotuseuntetheredtrackingsystemsmayfacehigherdriverturnoverrates.
Increased Theft
Shippersofeverytypeareconcernedaboutcargotheft,andtruckfleetsbear85percentofthisburdenamongallshippingmodes.7Whilemosttheftisunreported,theInternationalCargo Security Council estimates that more than $10 billion in merchandise is stolen each year.Whenunreportedtheftandindirectcostsincludingdamagedormissingassets,lostproductivity,andhigherinsurance8premiumsarefactoredin,estimatesrangebetween$20billionand$60billionlostannually.Inadditiontothesecosts,cargotheftrepresentsasignificantcustomerservicefailure,anditaffectscustomersthatshiphigh-valuecargotoagreaterdegree.Intheabsenceofuntetheredtrackingsystems,apromptresponsetotheftisunlikely.
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Poor Back-Office, Field Staff, and Fuel Efficiency
Withoutuntetheredtrailermanagementsystems,carriersmustresorttoinefficientmanualsystemsthatareneithertimelynoraccurate.Therefore,back-officemanagementsystemscannotefficientlyintegratetheinformationwithmaintenanceanddispatchsoftware.In thefield,forexample,valuableresourcesarewastedonlabor-intensiveyardcountsandondrivers’huntsforemptytrailers.Everyminuteofengineoperationthatdoesnotcontributetothehaulingofcargo—whetheritisspenthuntingforemptytrailersoridlingwhilecargoisloaded—representsawasteofexpensivefuel.Alloftheseresourcemisallocationserodebottom-lineprofitability,andcanbereducedbyimplementinguntetheredsystems.
Trailer Tracking as a Solution to Industry ChallengesImproved Trailer Utilization
Byobtainingaccurateinformationabouttrailerutilization,carrierscanbillcustomersaccurately,andtheycandevisestrategiestomaximizeprofitswhilemaintainingcustomerservice.Strategiesmayinclude(1)reducingorexpandingthesizeofthetrailerpoolmadeavailabletoanysinglecustomerand(2)buildingincentivesintothenegotiatedfeestructure(tariff)sothatprofitableutilizationismaximizedandlessprofitableutilizationisminimized.
Untetheredtrailermanagementsystemsofferanumberofadvantages.First,thesesystemsrecordtrailerlocationswhenevertheyaredroppedorhooked,andtheyreporttheselocationsonaregularbasis.Asaresult,carrierscanmaintainaccuratetrailerinventorieswithoutconductingphysicalyardcounts.Sincethesesystemsalsosendstatus-changemessageswhentrailersareloadedandunloaded,carriersalwaysknowthestatusofeachtrailerandcanpasstheinformationtonearbydrivers.Carrierscanmonitortrailerdwelltimesonaper-customerbasistodetermineiftrailersarebeingusedtotheirfullestpotential.
Insummary,carriersenjoythefollowingbenefitsfromuntetheredtrailertracking:
• Accurate,up-to-datetrailerinventories
• Reduced labor costs when collecting trailer pool data
• Substantiatedcustomerloadingandunloadingtimesfortrailerdetentionbilling
• Historicaldetentioninformationforuseincontractnegotiations
• Abilitytorenegotiatetrailerpoolcommitmentsbasedonactualusagebycustomers
• Identificationofdemandtrendsversussupplyovertimeandbylocation
• Abilitytoredeploytrailersfromlow-utilizationcustomerstocustomersthatneedmoretrailers—withoutpurchasingadditionaltrailers
• Abilitytoreducetrailerinventoriesreducecapitalexpenditures
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Optimal Trailer Pool Size
Optimizingthesizeofatrailerpoolhasadirectimpactonreducingcapitalcosts.Todeterminetheoptimaltrailerpoolsizeforeachcustomer,carriersneedup-to-date,detailedinformationthatonlyuntetheredtrackingsystemscanprovide.Asnotedpreviously,thebuilt-inbiasthatpadsthesizeoftrailerpoolscausescarrierstowonderifcustomersareabusingthemand,correspondingly,ifsomecustomersarebeingunderservedbytrailerpoolsthataretoosmall.Itisimportanttoremember,however,thattheobjectiveisnottobilldetentionfeesortoprovideon-sitestorageforcustomers.Carriersareinthecargo-haulingbusiness,andtheymustmaximizeprofitsbyhaulingcargo.
Best-in-classuntetheredtrailermanagementdatatypicallyincludesthelocationofeachtrailer, dropandhooktimes,connectionanddisconnectionevents,dwelltimes,andtrailerstatus(loadedorunloaded).Thisdataalsoenablescarrierstoengageintrailer-pooloptimizationtaskssothattheycanavoidthetwinproblemsofprovidingtoofewtrailerstocustomersthatneedthemand,conversely,toomanytocustomersthatdon’t.Thesetasksinclude:
• Determiningiftrailerpoolcommitmentsarebeingobservedbycustomers
• Obtaininghistoricaldetentioninformationforuseincontractnegotiations
• Identifyingdemandtrendsversussupplyovertimebylocation
• Renegotiatingtrailer-poolcommitmentsbasedonactualcustomerusage— offeringpricebreakstocustomersthathavetoomanytrailers
• Improvingcustomerservicebyredeployingtrailersfromlow-utilizationcustomers tocustomersthatneedmoretrailers—withoutpurchasingadditionaltrailers
Accurate, Timely Information
Untethered trailer management systems resolve the obstacles presented by manual data-collectiontechniques—theexpense,inefficiency,lackoftimeliness,inaccuracy,andunavailabilityasaresultofthelackofinterestincollectingit.Anuntetheredtrailermanagementsystemcanprovideavarietyofconveniences,dependinguponthesystemused:time-anddate-stampedpositionreporting,connectanddisconnectnotification,dropandhookevents,anddwelltimes;over-the-airupgrades;configurablereportingtoassistindataanalysis;integrationwithexistingdispatchsoftware;modulardesigntosupportmultipleinstallationconfigurations;Web-basedaccesstoinformation;multi-modecellularcoveragefortransmissionreliability;satellitemapping;virtualboundaryalertstominimizethecostoftheft;sensorsthatdetectunauthorizeddooropeningsandclosings;reefermonitoringandnotificationcapabilities;tripreporting;systempowermessages;groupsupportandreporting;andachoiceofbatteryorsolarchargingsystems.9Asaresultoftheseconveniences,carrierbenefitsincludetheabilityto:
• Monitordetailsaboutthestatusandlocationoftrailersandcontainersinnear-realtime
• Increasedriver,tractor,fieldstaff,dispatch,andback-officeproductivity
• Optimize asset utilization and trailer pool inventories
• Enhance detention billing
untethered trailer
management systems
resolve the obstacles
presented by manual data-
collection techniques—the
expense, inefficiency, lack
of timeliness, inaccuracy,
and unavailability as a result
of the lack of interest in
collecting it.
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• Increase trailer and cargo security
• Createvaluablereportsforoperationsandplanning
• Improvecustomerservicewithaccurate,timelyinformation
• Maintain visibility in harsh environments
Improved Driver Productivity and Safety
Untetheredtrailermanagementsystemsresolvedriverproductivityandsafetyproblemsrelatedtothehuntforemptytrailers.Armedwithdetailedinformationaboutthetrailerinventory,dispatcherscanprovidedriverswiththespecificlocationofemptytrailers.Thisimprovesdriverproductivitybecauseit:
• Eliminatesdriverhuntsforemptytrailers—eitherwithinayardorbetween differentyards
• Eliminates instances in which drivers are sent to a yard to pick up a trailer only to discover that no trailer is available
• Improvessafetybyprovidingopportunitiesfordriverstorestifnecessaryinstead ofhuntingfortrailers
improved driver morale and retention
Withuntetheredtrailermanagementsystems,driversnolongerwastevaluableincome-generatingtimeonhuntsfortrailers.Thiscanhelpeliminateresentmenttowardtheiremployersandimprovemorale.Justasimportant,carriersthatuseuntetheredtrailertrackingsystemsgainreputationsamongdriversascarriersthatkeepdriversmoving.Inadditiontoreducingdriverturnoverratesforthesecarriers,untetheredtrackingsystemscanactasrecruitmentdevicestoattractnewdrivers.
Insummary,untetheredmanagementsystemshelpcarriersaccomplishthefollowinggoals:
• Improve driver morale
• Reduce driver turnover
• Increasetheearningpotentialofdriversbyreducingtheiridletime
• Helprecruitnewdriversbyattractingthemasaresultofimprovedcarrierreputations
Reduced Losses from Theft
Untethered trailer management systems play a role in promptly recovering stolen cargo and trailersaswellasinpreventingcargotheft.Becauseuntetheredsystemscanalertcarriers whentrailerdoorsareopenedoriftrailersmovebeyondpre-setboundaries,carrierscan respondquicklytotheft.Carrierscanbeginbyqueryingdriversandyardpersonneltodetermine ifasituationmeritstheinvolvementoflawenforcementauthorities.Quickactioncanpreventtheremovalofcargofromtrailersthatarestillintheyard.
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Whentrailersarestolen,untetheredsystemskeepcarriersandpoliceinformedabouttheirlocations,andtrailerscanbeidentifiedmorequicklyontheroad.Asaresult,trailerscanberecoveredwiththecargointactinmanycases,andinsomeinstancesthievescanbeapprehended.Furthermore,whencarriersbuildareputationforcombatingtheft,itactsasadeterenttoexperiencedthieves,whowillmoveontomorevulnerabletargets.Untetheredtrackingsystemsalsominimizetheancillarycostsoftheftbyreducinginsuranceclaims,lossofthetrailerandcargo,timespentbyemployeesonassetrecovery,andcustomerservicefailures.
Carrierscandifferentiatethemselvesfromcompetitorsbyinstallingtrailertrackingontheportionofthefleetthathaulshigh-valueorhigh-riskcargo.Thiscanattractadditionalbusinessfromcustomerswhohavesufferedahighdegreeofcargolosswhenusingcarriersnotequippedwithtrailertracking.Somecustomersarenowrequiringthatfleetsbeequippedwithtrailertrackingintheirrequestsforproposal(RFPs).
Insummary,untetheredtrackingsystemscanreducetheft-relatedexpensesanddifferentiatecarrierservicesinthefollowingways:
• Alertcarrierspromptlyaboutunauthorizeddooropenings,unexpectedtrailer movements,andtheunloadingoftrailersatunplannedlocations
• Alertcarriersiftrailersfailtoreporttheirlocationsaccordingtoschedule(thetracking systemmayhavebeendisabled,andthecarrierwillnototherwiserealizethatthetrailer is missing)
• Enablecarrierstoproactivelymanagemissingtrailersinsteadofwaitingforreportsofmisseddeliveriesasabasisfordeterminingthattrailershavebeenstolen
• Enablefasterrecoveryofstolentrailersandcargobysupplyingtrailerlocationdata
• Minimizetheancillarycostsoftheftincludinginsurance,cargoandtrailerloss, employeetime,andcustomerservicefailures
• Actasadeterrenttopreventcargotheft
• Minimizetheftofhigh-valuecargowhenappliedtoaportionofthetrailerfleet
• Differentiatecarriersinwaysthatattractnewbusinessfromcustomersthatare sensitivetotheftorretainthebusinessofcustomersthatrequiretrailertrackingintheirRFPs
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Improved Back-Office and Field Staff Efficiency
Thevarietyofinformationmadeavailablebyuntetheredtrailertrackingsystemshasadirectimpactontheefficiencyofback-officeandfieldpersonnel.Inthefield,untetheredsystemseliminatetheneedforyardcountsandothererror-prone,labor-intensivemethodsoftrackinginventories.Thereislessscramblingtofindmissingtrailersandfewerchancestodisappointcustomers.Intheoffice,armedwiththenewinformation,taskssuchasinventorymanagement,dispatch,responsestounexpectedshipmentopportunities,utilizationanalysis,andplanningbasedontrenddataareeasiertoconductandmorereliable.Asaresult,carrierscandomorewithfewerresources,andcustomersenjoybetterservice.
Tosummarize,carriersbenefitinthefollowingways:
• Eliminateunnecessary,error-prone,labor-intensivetasks
• Eliminatescramblingandbacktrackingtolocate“missing”trailers
• Improvetheefficiencyandaccuracyofinventorymanagementanddispatchoperations
• Enable quick responses to unexpected shipment opportunities that can win new customers
• Conductutilizationanalyses,trendspotting,andlong-termmanagementmoreeasily
• Improve customer service
the impact on trailer rentals to Carriers
Asthenumberoftrailersequippedwithuntetheredtrailermanagementsystemsincreases, industryexpectationswillrise.Notsurprisingly,thecriteriabywhichcarriersselectvendorsofrentedtrailerswillreflectthistrend.Asaconsequence,vendorsthatequiptheirtrailerswithuntetheredtrackingsystemswillenjoyacompetitiveedgewhenseekingcustomers.Inparticular,carriersthatalreadyhaveupgradedtheiroperationalsystemstoincorporatethenewtrackingtechnologieswillbeunlikelytorenttrailersfromvendorsthatdonotsupportuntetheredtracking.Theyareunlikelytotakeastepbackwardafterinstitutionalizingthesetechnologicalchanges.Finally,thewidespreadpracticeofcarrierskeepingrentedtrailerslongerthanoriginallyplannedwillceasetobethenorm.Instead,carrierswillbeabletolocateandreturnrentedtrailersmorequicklytotheirvendors.
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How to Evaluate Trailer Management ProvidersThetelematicsindustryhasexperiencedconsolidationinrecentyears,andsomeprovidershaveabandonedtheindustry.Asaresult,somecustomershavebeenleftwithantiquatedequipmentandinteroperabilitychallenges.10 Toaddresstheseconcerns,carriersthatareconsideringaninvestmentinuntetheredsystemsshouldevaluatepotentialprovidersbydrawingupalistofassessmentcriteria.Theseshouldincludethefollowingelements:
• Adequate resources to respond.Anuntetheredtrackingsystemprovidershouldhaveadequatecustomerserviceresourcestorespondquicklyandeffectivelyto questionsandproblemsituationsfromcustomersinawidegeographicalareaat anytimeofday.
• financial stability.Business stability is an important element in purchase decisions and untethered tracking providers should be able to demonstrate a longstanding commitmenttoservingtheircustomers.Providersshouldhaveadequatefinancialresourcestoweathergeneralmarketplacefluctuationsandperiodsofindustry retrenchment.
• Availability of professional services.Customers that use untethered tracking systems mayrequirevarioustypesoftechnicalandprofessionalassistance.Theseservicesmayincludeassessmentcapabilities,theabilitytointegratethenewsystemswithotherproductsandsystemsthatarealreadyinusebycustomers,trainingservices,andcustomdevelopmentandprogrammingservicestoaddspecificfeaturesorotherwisetailorsystemperformance.
• Proven track record.Pastperformanceoftenprovidesevidenceofanorganization’scommitmenttoitscustomers.Untetheredtrackingsystemprovidersshouldbeabletodemonstratearecordoflongstandingcustomerservice,productsupport,updateassistance,technologicalexpertiseandleadership,andahistoryofproductimprovement.
• industry knowledge.Untethered tracking system providers should be able to demonstrateathoroughunderstandingofthetransportationindustry,itschiefchallenges,andtheneedsofitsparticipants.
• technical expertise.Sincetechnologyliesattheheartofuntetheredtrackingsystems,aprovidershouldbeabletodemonstrateknowledgeandawarenessofarangeofwirelessinformationtechnologies,systemhardware,informationtechnology(IT)issues,andsoftwareintegrationanddevelopmentpractices.
• system robustness.Foreachsystembeingevaluated,customersshouldbeableto verifythelikelihoodoflong-termreliabilityandperformanceintheoperatingenviron- ment.Thisshouldincludeboththetrailermanagementsystemdiscussedhereand
Business stability is an
important element in
purchase decisions and
untethered tracking
providers should be
able to demonstrate a
longstanding commitment
to serving their customers.
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thecommunicationsnetworkdiscussedbelow.Akeyaspectofsystemrobustnessistheabilityoftheapplicationtoutilize,operatein,andbuildupontheadvantagesofmultiplecommunicationtechnologiesandfrequenciestosendandreceivedata—inotherwords,demonstratemodediversity.Forexample,itshouldbeabletoapplyavarietyofsatellite,cellular,andWi-Fi(IEEE802.11)communicationtechnologies.
• network service availability and assurance. The wireless network that is paired with theuntetheredtrailermanagementapplicationmustalsobeagoodmatch.Sincethewirelessnetworkprovidermustbeabletoservethefunctionssuppliedbythetrackingsystem,carriersshouldconsiderthe“5Cs”ofcapacity,coverage,continuity, costeffectiveness,andconsistencywhenevaluatingnetworkservice.Doesthenetworkhavethebandwidthtohandlethenumberofusers,thetrafficvolume,andservices usedbytheapplication(capacity)?Canitprovideallofitscommunication,reporting, andalertfunctionsthroughouttheentiregeographicalareawhereitwillbeputintoservice(coverage)?Doesthenetworkhavealongstandingrecordofperformanceindatatransmissionandahistoryofnetworkavailability(continuity)?Doesthenetworkofferlowesttotalcost—includinghardwareandmessaging—fromamongthemanysolutionsavailable(costeffectiveness)?Withintheframeworkoflong-termcontinuityofservicedescribedearlier,doesthenetworkprovideconsistentserviceregardlessoflocation,applicationtype,ormodeofoperationsothattheuntetheredapplicationcandelivertheexpectedbenefits(consistency)?Notallapplications—inthiscase,anuntetheredtrackingapplication—placethesameburdensonthewirelessnetwork.Consequently,thesamewirelessprovidermaynotbethebestchoiceinallcases.
• Partnership approach.Thetransportationindustrypresentscomplexchallenges.Theseinvolvethenatureofthebusinessitself,commonpractices,employeeissues,andcompetitivepressures.Untetheredmanagementsystemprovidersshoulddemonstrate a willingness to understand customer concerns and objectives and act as a trusted partner and advisor to develop solutions that incorporate the most suitableprocessesandtechnologiesforthechallengesfaced.Theyshouldalsobeabletodemonstrateaknowledgeofbestpracticesandhavetheresourcestotraina customer’sstafftoobtainoptimalresultsfromthesystem.
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ConclusionByadoptingwirelessuntetheredtrailermanagementsystems,carriers,privatefleetsandtrailerrentalvendorscanaddressthekeychallengesthaterodeprofitabilityandcompetitivestanding.Thekeybenefitsprovidedbyuntetheredtrackingsystemsarebasedonthesuperiorityoftheinformationsuppliedbythesesystemsanditseasyintegrationwithtrailermanagementpracticesandstrategies.Thechiefbenefitsofemployinguntetheredtrackingsystemsincludemoreefficienttrailerutilization,optimaltrailerpoolsizingforeachcustomer,reductionincapitalcosts,improvedbillingaccuracy,theprovisionofaccurateandtimelyinformationforeffectivemanagementoftrailerinventories,improveddriverproductivityandsafety,improveddrivermoraleandretentionrates,areductioninlossesfromcargoandtrailertheft,improvedback-officeandfieldstaffefficiency,andimprovedcustomerservice.
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References1ABIResearch,TrailerTrackingMarkets.A Global Analysis of Trailer Tracking and Monitoring
Systems, Vendors, and Technologies(OysterBay,NY:ABIResearch,2005)p.3–2.
2ABIResearch,TrailerTrackingMarkets.A Global Analysis of Trailer Tracking and Monitoring Systems, Vendors, and Technologies(OysterBay,NY:ABIResearch,2005)p.3–3.
3ABIResearch,TrailerTrackingMarkets.A Global Analysis of Trailer Tracking and Monitoring Systems, Vendors, and Technologies(OysterBay,NY:ABIResearch,2005)pp.1–2,3–4.
4C.J.Driscoll&Associates,U.S. Mobile Resource Management Systems Market Study, 2005-06 Edition. A Comprehensive Study of the U.S. Fleet AVL Market and Other MRM Products and Services(PalosVerdesEstates,CA:C.J.Driscoll&Associates,2005)p.12.
5AnOmnitracsestimate.
6Omnitracs,internalderivedestimatebasedonindustrysources,(SanDiego,CA:OmnitracsEnterpriseServices,January11,2007).
7NationalCargoSecurityCouncil(NCSC).Shining A Light On Cargo TheftbyDavidCullen,ExecutiveEditor,FleetOwner,August,2006.
8ABIResearch,TrailerTrackingMarkets.A Global Analysis of Trailer Tracking and Monitoring Systems, Vendors, and Technologies(OysterBay,NY:ABIResearch,2005)p.3–6.
9ABIResearch,TrailerTrackingMarkets.A Global Analysis of Trailer Tracking and Monitoring Systems, Vendors, and Technologies(OysterBay,NY:ABIResearch,2005)p.3–4.
10ABIResearch,TrailerTrackingMarkets.A Global Analysis of Trailer Tracking and Monitoring Systems, Vendors, and Technologies(OysterBay,NY:ABIResearch,2005)p.3–7.
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