Transportation and logistics are always under construction. Changing consumer demands, economic swings, legislative reforms – the challenges require constant navigation. Technology’s ability to meet today’s challenges and anticipate tomorrow’s needs represent one of the only constants in supply chain evolution. As the industry continues to enter new territory, technology provides the guidance and paves the way for where transportation is headed next.

The Three C’s
It’s been a bit of a wild ride in transportation and logistics across the last 24 months. When we think about the major challenges in front of us, we can really put them into three major categories that I like to call the “Three C’s” – capacity, clocks or time, and cash flow.

On the capacity front, we’re currently sitting about 50,000 drivers short. Carrier utilization has consistently hovered between 98-103% utilization. Between 2017 and 2018, loads to trucks increased by more than 29%.

Of the capacity we do have, it’s highly fragmented, with about 97% of for-hire carriers comprising fleets of 20 trucks or less.

Normally, to capitalize on a carrier-favored market, fleets would flex up using independent contractors, but with more than $700 million awarded from independent contractor misclassification lawsuits in recent years, fleets are understandably hesitant to leverage an independent contractor model, or to grow the one they already have.

Further compounding the problem is that trucks are only logging about 6.8 productive hours per day. Miles traveled per day also has decreased between 10-20% due to things like the implementation of electronic logging devices (ELDs), redistributions of shipper networks, and overall congestion and traffic.

Therefore, to increase capacity, fleets are paying drivers more. Driver pay has increased by about 12%, which is pushing freight rates higher. By the close of 2018, rates increased around 10-15% with another 5% increase anticipated for 2019.

To combat rising rates, shippers are extending pay terms to improve working capital. More than 40% of shippers pay carriers in 30 days or more. Of the top 1,000 US companies, average days to pay suppliers sits at 57. This creates a major capital and cash flow challenge for carriers.

These challenges collectively are what’s sparking so much innovation and technology deployment in transportation.

Digital Demands
Accenture conducted a study of digital disruption in transportation and logistics. They estimate that companies choosing not to implement a digital strategy in the upcoming years will start to see downward pressures of approximately 3% EBITDA as compared to companies that adopt a digital strategy. Companies digitizing the customer experience, adopting new digital models, or digitizing operations collectively can improve EBITDA by 13%.

It’s numbers like these that have promoted more than $42 billion of investments in transportation and logistics technologies in recent years.

We’re seeing new technology providers gain footholds inside of transportation – names like FreightRover, Uber Freight, Convoy, Transfix, uShip, and project44.

Transportation staples like DAT and Truckstop.com are evolving their models to keep up with where the industry is going.

The traditional, out-of-the-box TMS providers are moving away from their homegrown, proprietary development models to integrate with new technology providers to meet customer demands.

Logistics providers of all sizes are now launching digital freight management models, rather than solely relying on human capital, to bring speed and transparency to their work.

Business as Usual, but Better
However, transportation as a whole generally sits near the end of the Innovation Adoption Curve. Therefore, the technologies that are proving the most successful are the ones that support a “business as usual” mentality, but also bring something better to the table. That’s exactly where FreightRover shines.

FreightRover includes a suite of four platforms designed to streamline supply chain management and to tackle the “Three C’s.”

CarrierHQ is an online marketplace offering cost- and time-saving services to fleets of all sizes. Services include insurance enrollment, fuel savings, business formation, factoring, and pay-by-trip driver settlements. CarrierHQ also assists large fleets in mitigating risk around independent contractor misclassifications by giving entrepreneurial choice to the drivers on which services they choose for their business.

PayEngine automates the back-office work around supplier payments and provides shippers with extended pay terms while allowing carriers and other suppliers to benefit from a customized quick pay program.
Freight xChange provides automated end-to-end freight management and brings shippers and carriers together online.

SmartLTL connects with all major domestic LTL carriers and provides shippers with quote to dispatch in under 60 seconds.

The Future of Transportation Tech
FreightRover is bringing automation and efficiencies to transportation and logistics today, but there is a lot more innovation for the industry on the horizon.

3D printing will significantly increase nearshoring and challenge the industry in how to do a better job of shipping made-to-order products.

We’ll see changes with equipment utilization as we look to maximize the space inside of trailers by leveraging multiple shippers and lanes together. These changes will ultimately alter the way we price truckload freight.

As we progress from EDI to API connections, giving us larger data parcels at quicker speeds, we’ll have an infusion of data to improve the productivity and profitability of our businesses.

The Internet of Things (IoT) not only will improve the way we maintain our equipment by helping with things like pre- and post-trips to ensure we are safe and compliant, but IoT also will transform our offices and homes by creating smart environments that know when products need ordered before we do. We won’t need to get on our phone or push a Dash button to order a product. And, if we think 48 hours is tough to deliver on, changing demands will only shorten the timeliness of the supply chain as consumers want things faster and faster.

However, perhaps the most overlooked area for new innovations comes from ELDs. This data will help us manage detention better to ensure drivers are compensated for their time. Using location and hours of service data, we’ll be able to issue smart notifications to find a truck and driver the perfect piece of freight to maximize productivity.

But, perhaps the most exciting innovation is using ELD data to create behavior-based insurance, which is exactly what Aon and FreightRover have partnered to do. The industry soon will see the launch of a behavior-based auto-liability insurance program using a proprietary algorithm of things like speed and hard-braking to generate a monthly rate by driver. Safe drivers get rewarded with lower rates. Risky behaviors require higher payments. The deck resets monthly, generating a new monthly rate based on the previous month’s driving data.

Not only will this program help create safer roads and control insurance costs, but we also believe this is a stake-in-the-ground moment for truly creating capacity in the industry. Today independent contractors and small fleets have a huge capital outlay of several thousand dollars per truck to purchase insurance. Our program provides a monthly rate, with no upfront investment, deducted through an easy settlement withdrawal. Drivers also can generate real-time quotes and enroll through their mobile phones, connect their equipment, bind the insurance, and be on their way.

It’s truly an exciting time to be in transportation. Where we used to see technology as the great differentiator, we’re now seeing it as the great equalizer. Plus, the technologies we’re talking about aren’t years away, they are happening right now, and they’re changing the way we do business. The journey is just beginning and there is a lot more innovation on the road ahead.

While contracts are responsible for over half of all freight movement, spot markets still make up for 30-40% of hauled loads, according to Heavy Duty Trucking.  And most spot market freight is traditionally handled by (you guessed it) load boards. Shippers, brokers, carriers, and owner operators are all used to interacting on a regular basis through dozens of competing boards, but the process can be slow, clunky, and sometimes downright untrustworthy. Data remains stored within the load board, rather than utilizing the cloud to transmit information into the user’s TMS, selecting loads can waste hours on the phone, and at the end of the day shippers are often still left in need of capacity. So the question remains – is there a better way?

Lately, we’ve begun to see hundreds of new solutions popping up left and right. These services claim to handle one aspect or another better than a load board, but few have the experience or industry partnerships to solve all of the problems that traditional load boards present.  If you Google “freight matching software,” you come up with thousands of hits from hundreds of companies, all trying to tell you how to change your business model in order to take advantage of their technology.  The right solution, though, shouldn’t require you to change how you manage your freight.  Instead, the right software should do the work for you.

 

Searching Loads

Traditional Load Board:  

Most traditional load boards curate results through certain search parameters, such as origin/destination, pickup time, and deadhead mileage.  Once you’ve found a load that fits your needs, you’ll need give the broker a call to request it.  That phone call takes time away from managing your business. And with a traditional load board, each time you search, you will need to reset your parameters.

FreightRover:

We know that with selecting freight, time is actually money. In addition to all of the searching parameters of a traditional load board, FreightRover saves your favorite searches for later use.  Maybe you’re always looking for freight out of Chicago that goes to Oregon – FreightRover will automatically notify you when a load that matches your saved search pops up, so you don’t waste time clicking through pages of loads.

So, what’s in it for shippers and 3PLs? Well, you can easily set rules through FreightRover’s platform to automatically adjust load details and visibility after a set period of time. Say you post a load for $1,500 and you set your rule to automatically raise the price by $200 72 hours before the late pickup appointment.  If your load hasn’t been selected by that time, FreightRover will automatically adjust the price to $1,700 to sweeten the load for carriers searching on FreightRover.

 

Selecting Loads

Traditional Load Board:

When carriers and owner operators find a load that fits their needs, there are still a few hoops to jump through in order to select it.  You know the drill – you’ll have to pick up the phone and call to make sure the load is still available. Upon confirmation of it’s availability, you’ll probably negotiate your pay terms and might have to make it through a few call transfers to do so.

FreightRover:

In the age of online shopping, load selection just shouldn’t be that difficult.  Wouldn’t it be convenient if you could find a load you like, view the price up-front, and select it right from the app? FreightRover automatically checks to ensure the load is still fully available, and you’ll be awarded the load within seconds.  No time wasted on trying to pick up loads that don’t exist.

And while we think our software is pretty great, we know that users don’t want to spend time in yet another platform. That’s why we’ve built TMS connectivity that will publish your selected loads into your existing TMS software.  The best part?  No unnecessary calls or worrying about negotiations – just a few clicks and you’re on your way.

 

Selecting Payment

Traditional Load Board:

Standard pay terms mean freight bills can be slow to pay out. By nature, you are typically working with a stranger on a load board, which means that shippers need time to verify load documents, carriers can be slow to send those documents over in the first place, and the process bottlenecks, causing carriers to wait 90+ days for a check in the mail.

FreightRover:

Luckily, it doesn’t have to be that way.  FreightRover’s PayEngine ensures that carriers are paid in as little as 24 hours.  Payment options are presented upon load selection, and can be changed on a per-load basis. Shippers and 3PLs don’t need to worry about paying out immediately, though. Instead, enjoy standard 30+ day pay terms, without slowing payment down for the carrier.

 

Track Load

Traditional Load Board:

It can be anywhere from annoying to downright difficult to keep track of your load as it moves.  Drivers have to manually report check calls and load updates. And while there are a many 3rd party platforms that offer extensive tracking, that in-depth tracking comes with a price tag.

FreightRover:

We know that load tracking and analytics are vital to successful freight management. That’s why we’ve partnered with MacroPoint to enable much of their their real-time global freight visibility and in-depth analytics directly within the FreightRover platform.  Working together, our platforms create automatic check calls for loads in FreightRover to virtually eliminate wasted time manually reporting updates.

 

Scan Docs

Traditional Load Board:

Searching, selecting, and tracking loads in a traditional load board can be a little clunky, but document approval is where it gets downright messy. From mailed-in documents, to long lines at the truck stop waiting for scanning, document validation significantly slows down the payment process for both the carrier or owner operator, and the shipper/3PL.

FreightRover:

FreightRover’s partnership with Pegasus Transflo means that when the load is completed, drivers and their carriers can easily snap a few photos of the appropriate documents and send them off to the shipper or 3PL.  Shippers then have the option to either accept the documents, or request additional images.  As soon as the documents are accepted, FreightRover automatically releases payment to the carrier.  Indexing and repository is free and mobile scanning means drivers get to skip the truck stop line and head back out onto the road.

 

Finalize Loads

Traditional Load Board:

There’s no reason to beat a dead horse. We know that even after the load is finalized, the paycheck for a load hauled today might not come for two or three months.

FreightRover:

Carriers will receive their payment based on their pay terms selection, including 24-hour pay.  Shippers pay using their financing terms agreed upon enrollment (typically 30+ days).  Everyone is happy, and freight keeps moving.

 

When looking for the best way to find and manage freight or capacity, there’s plenty of options out there.  But which one is right for your business?  At FreightRover, we’ve streamlined the process from end-to-end.  From the moment you search a load in our system, all the way through receiving documents and finalizing the load, the process is simple and the control is comprehensive.

FreightRover works like a dog, so you don’t have to. To request a demo of FreightRover, give us a call at (866) 621-4145 or send an email to sales@freightrover.com

There’s no doubt that new government regulations are pushing the trucking industry through a major shift. And while tension is high among our current administration and the previous one, these regulations are still set to go into effect throughout 2017. You’ve probably heard of the ELD mandate, which will go into effect in December, and catapults the industry into a very different regulatory landscape. With the ELD mandate and other widespread regulations, 2017 is shaping up to be an unprecedented year for the trucking industry.

Electronic Logging Devices

There is a lot of buzz going around the trucking industry about the newly-implemented Electronic Log Device (ELD) mandate. The mandate was first published by the Federal Motor Carrier Safety Administration in December of 2015, and goes into effect December of 2017.

Proposed hours-of-service rules, limiting drivers to 60/70 hours on duty in 7/8 consecutive days, can easily be tracked through ELDs. The looming regulation has left many drivers worried that the ELD will serve as a “big brother” entity over their driving. Realistically, though, the ELD does nothing more than keep accurate records. The device connects to a truck’s engine to record information, but the ELD does not and cannot automatically transmit data to any outside entities. In the event of a roadside inspection, drivers are required to electronically transfer their HOS records for the last 8 days (including the current day) to the roadside inspector. There are several methods to transfer records, including online, email, USB connection, and Bluetooth connection.

The ELD mandate brings the transportation business into the 21st century, and helps drivers cut down on deadhead miles, as well as assists in keeping accurate records. The ELD simplifies compliance by eliminating long-term paper logs, and in doing so results in a significant cut-back in the most common violations, since drivers will always have an accurate and up-to-date log on file. With electronic transfer capabilities, inspections go significantly faster and easier, meaning drivers lose out on less time while stopped. And ELDs even store additional useful information, such as location, speed, and engine date, which helps both carriers and their drivers in legal litigation.

Greenhouse Gas Rules

While important, the ELD mandate is far from the only regulation that will affect the trucking industry in 2017. In August of 2016, the Environmental Protection Agency and the National Highway Traffic Safety Administration issued three phases of new greenhouse gas standards to ensure that manufacturers will reduce carbon emissions.

“Phase 2 includes technology-advancing, performance-based standards that will phase in over the long-term, with initial standards for most vehicles and engines commencing in model year 2021, increasing in stringency in model year 2024, and culminating in model year 2027 standards,” says the EPA memo.
Carriers and owner operators can expect a temporary cost-hike in tractors and trailers, as manufacturers work to meet the new standards set by the EPA and National Highway Traffic Safety Administration.

The EPA, however, explains that companies can recoup the extra expense with fuels savings within two years. Trucking companies should make plans to track fuel savings, ensuring they’ll recover their costs and capitalize on the benefits for operations by the two-year mark.

Entry Level Driver Training Rules

In addition to the ELD mandate and gas emission regulations, driver training will take a turn in 2017. The Federal Motor Carrier Safety Administration (FCMSA) has proposed an increase in training for truck drivers, even amidst the national driver shortage.

Implementation and compliance of the proposed FMCSA rule could cost up to $5.6 billion over the course of a ten-year period, including expenses such as tuition and compliance audits, experts say. The FMCSA could require In-house training programs, but they do not outline the details of such requirements.

Several groups recently have petitioned the FCMSA to reconsider provisions of the new requirements, which the agency issued on Dec. 7 of 2016. The final rule does not include a requirement for 30 hours of behind-the-wheel training for new drivers. Earlier last year, FCMSA had proposed a minimum of 10 hours of training on a “driving range” as well as an unspecified amount of time driving on a public road. The final rule also does not require a behind-the-wheel standard for student drivers. Instead, it points them to a skills tests administered by state licensing agencies.

The petition to reconsider was filed by Advocates for Highway and Auto Safety, the Owner-Operator Independent Drivers Association, the Truck Safety Coalition and Citizens for Reliable and Safe Highways on Dec. 21, 2016.

“The performance standard in the Final Rule does not ensure that CDL applicants who can pass the state CDL skills test will spend any time actually operating a CMV on public roads with an experienced instructor encountering safety critical situations,” the petition says.

Representatives from independent contractor defense services, such as OOIDA, are concerned that other professions require time to practice on-the-job before being given a license, but that CDL applicants are not provided with the same opportunities.

Here at FreightRover, we work daily to publish informative articles for our carriers, shippers, and owner operators. For more information on FreightRover’s role in the ELD mandate and other 2017 regulations, contact us today!

The Federal Motor Carrier Safety Administration (FMSCA) published new information and additional guidance on ELD compliance last month. The website’s FAQ page now clarifies that carriers using automatic onboard recording devices can transfer their AOBRDs to a new truck and remain compliant with the ELD mandate, as long as the truck replaces another within the fleet.

While the ELD mandate goes into effect Dec. 18, 2017, this “grandfather” rule allows carriers using AOBRDs to continue to do so for two additional years, until Dec. 16, 2019. At that time, all fleets with AOBRDs will be required to switch over to ELDs.  If the carrier adds vehicles to their fleet in the meantime and chooses not to replace an old truck with the new one, the new vehicle would be required to have an ELD.

Furthermore, the agency explained that if an ELD does not meet the law’s requirements and ends up being decertified, the ELD vendor isn’t required to notify the carrier.

“FMCSA reported that carriers found to be using non-compliant devices will have eight days to replace the device with a compliant option. Though carriers are required to choose a device from the agency’s registry of certified devices, the agency’s vetting process for the devices is skimpy, relying on manufacturers to “self-certify” their devices,” says James Jaillet, reporter for Commercial Carrier Journal (CCJ).

Because of the industry-changing nature of the mandate, there is a lot of confusion around when exactly a device is compliant, and how the mandate even came about. We’re here to clear the air. We’ll be posting updates on the latest ELD mandate news periodically, and are focused on keeping our customers informed on the information that is making big waves in the trucking industry.

How the Mandate Came About

Back in 2012, Congress enacted the “Moving Ahead for Progress in the 21st Century” (MAP-21) bill. This law included a general transportation structure outline for the coming years, a breakdown of highway fund allocation, and a clause regarding the use of ELDs. In technical terms, an ELD electronically records a driver’s Record of Duty Status (RODS), which in turn replaces the long-term paper logbooks that some drivers use to keep track of their Hours of Service (HOS). Aside from those grandfathered in, fleets have until December 18, 2017 to implement universal ELDs into their business model.

FMCSA Public Meeting

To clarify compliance issues and further assist ELD manufacturers in understanding the law, the FMSCA has scheduled a public meeting in Washington D.C. The meeting will be held May 9 at 9:30 a.m. at the U.S. DOT’s Media Center.

“This meeting is intended to address questions received from ELD manufacturers and to review the required standardized output and standardized data sets” says the FMCSA in their announcement.

Because the meeting is public, dozens of carriers and ELD providers are expected to attend.

ELD Mandate and FreightRover

The ELD mandate may initially sound daunting; it’s a big change to the trucking industry and affects drivers on a daily basis. Some changes, though, are good changes. That’s why we are developing partnerships with ELD providers to bring you a truly independent experience. Reach out to us today to learn more!