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.

To end FreightRover’s week focusing on women in logistics, we talked with all-star Misty Darnell of Paschall Truck Lines about her thoughts on trucking and the unique female perspective.

Misty Darnell Image

How did you get into logistics?

I received an offer to work fulltime while I was getting my master’s degree in finance. I got my first taste of logistics and instantly loved it. I love that there’s a new challenge every day. Nothing’s ever perfect within logistics – there’s always something that can be better, that can be improved upon. I did that and then got offered a job to come back 5 years after I graduated and to work at Paschall Truck Lines. I knew I loved trucking and it was a good opportunity to get back into it and do something I knew I liked. From there I’ve progressed into the roll I’m in now, which is Vice President of Corporate Development.

What are the biggest problems in the industry?

I think for any carrier the driver market and driver turnover are big issues within our industry. We must make trucking more attractive to more people and get them involved because we have a driver shortage. I think our biggest challenge currently is deciding what we need to do as an industry to get more people involved and wanting to become truck drivers.

Do you think being a woman in the logistics industry gives you a different perspective? Do you think you’ve brought anything new to the table being a woman in a traditionally male-dominated field?

My mind races at 100 miles an hour and is constantly thinking about a bunch of things at once. When you think about logistics and trucking, that’s exactly how trucking is. There are so many things going on at once. It’s not just one process, you’re working through the whole system. You’ve got your trucks to worry about, you have your equipment, your customers, and your drivers.

I’m not sure why there hasn’t been as many women in trucking – I guess because from a driving perspective everyone just thought it was more of a male job. But from the carrier and driver side of things, it’s a huge opportunity for women to come into this industry to give a completely different perspective and thought patterns. Women tend to look at things very openly and question things at times. I know for myself, I always question why I’m doing something and what potential opportunities might be there. I think logistics for women can be a huge opportunity for them to be successful if they can come in and handle the driver aspect of it as well as the back office.

What can other women learn from your success?

Within my organization, I’m the only woman vice president and I’m also the youngest. I sit on two vendor customer advisory boards where I’m often the only woman in the room. It’s easy to worry about stereotypes like, “Oh you’re a woman. Do you know as much as everyone else?” However, when you’re able to open your mouth and speak very intelligently, you instantly gain respect. As a woman, you must prove yourself. Be confident in what you’re speaking about and be knowledgeable. That comes with any industry and any job, but especially here where there traditionally haven’t been very many women at higher levels.

How is technology helping to bring more people into the industry?

The technology advances help enables automation and back-end procedures, which free up time to work more hands-on with the drivers. Technology allows us to reallocate resources. There’s a driver shortage and there’s also a shortage on the experience side. We’re a training fleet, so we hire drivers from CDL school and put them through our training program. We’re able to expedite processes and reallocate those resources to training novice drivers to become better long-term drivers.

What is Paschall Truck Lines doing to get people into the transportation and logistics industries?

On the driver side of things, we have taken a hard focus at hiring additional women drivers. Our percentage right now is about 8% of our total driver pool. I know that doesn’t sound like a lot, but within the industry it’s actually really good. We see hiring more female drivers as a big opportunity and we are trying to increase that percentage monthly.

This is a guest post written by project44.

As rates increase due to capacity issues, delivery windows continue growing tighter, and e-commerce shakes up shipping more and more, the need for efficiency has never been greater. Luckily, these issues are happening at a time when industry technology is undergoing a massive upgrade cycle that spells greater efficiency, better business insights, and financial gains. The key is digitization and automation, and leveraging FreightRover and project44’s partnership can help you achieve it for your LTL shipments.

Collaboration Brings the Best Results

The rate at which industry technology is upgrading has created somewhat of a learning curve. While shippers and carriers adjust to the new ways of doing things, niche technologies are being created to meet the expanding needs of the industry. That said, fragmentation across the industry creates challenges in entry time, delivery windows, and costs. The best solutions happen when technology companies partner together and leverage each other’s shared expertise.

project44 and FreightRover are a prime example of this collaboration, and how it leads to a better overall customer experience. project44’s LTL visibility solutions are integrated directly to FreightRover’s automated LTL load management solutions, resulting in smooth, automated processes working off of high-quality data. project44’s intelligent visibility data combined with FreightRover’s automated LTL management keeps users in the know at all times.

Automation and Visibility

Stale and inaccurate data is the bane of supply chain efficiency. While the industry has relied on legacy data feeds like EDI, FTP, spreadsheets, and manual processes, the data they provide is too unreliable for automation and visibility. These processes are costly, time-consuming, and result in poor customer service for the end consumer.

FreightRover’s automation capabilities make LTL load management simple and efficient by instantly connecting users to the largest domestic LTL carriers. Thanks to project44’s integrations, customers get live updates regarding shipment status, tracking, and delivery confirmation, and FreightRover automates the process end-to-end. With access to better rates and instant rate quotes, easy automated dispatch, real-time shipment visibility and automated invoicing, the dynamic partnership between project44 and FreightRover turns hours of LTL processing into 3 simple steps and provides an unparalleled level of visibility. The result is a digitized, automated, and essentially hands-off experience for shippers.

To learn more about the partnership and start saving on your LTL shipments, visit: https://integrations.freightrover.com/p-44/