September 2016

Trucking 3.0

Whether you’re a truck driver or a truck fleet operator, there’s no argument that the industry is being transformed, and at a rapid rate; partly in response to increasing regulation, but also in response to competition, technology and the sheer mass of America’s enormous economy. Trucking has always embraced independence, liberty, self-reliance--similar values we all share living in our great nation. Fierce independence and allure of the open road; you know, like all those Goldwing riders you see out there. But a driver’s life is no bed of roses. It can be incredibly isolating and the dangers are well documented. Meanwhile, trucks and truckers have long been vilified politically for being greedy natural resource exploiters ruining our infrastructure. The do-gooders push extra regulations to keep the trucking menace in check and the motoring public public safe. Part of that nanny-state intrusion has manifested itself recently with federal mandates for electronic logging devices (ELDs).

Technology and the people behind it are driving some serious trends across the U.S. economy, including a shift away from brick and mortar retailing and the move towards new levels of automation finding its way into our lives and work-- something that goes double for the trucking industry which is responding in a variety of ways to accept and adapt to technologies to support the overall mission. Like boots on the ground, logistics by truck is battle won by putting weight of metal (freight) down range, on target in as timely and efficient manner as possible. How this is being accomplished by drivers, fleet operators and the industry in general is evolving, and what is emerging has all stakeholders wondering where all of this is going.

Trucking, truckers and the industry in general are arriving at a point break. This term refers to an underwater geological feature that causes the ocean’s tidal swells to lift suddenly and creates a wave that “breaks” at that point. The new regs and technologies converging on the trucking industry combine to form that rising feature. How the industry can surf the subsequent wave successfully has been suggested by Forbes' Kevin Omarah who describes in his recent article “Truck Driver Shortage Is A Shortage Of Imagination” how much of what is ailing the industry could be solved with some imagination, and a better understanding and willingness to integrate the role of the driver with technology in more realistic and humanist terms.

Omarah sets the stage by pointing out one of the industry’s most acute pain points: the shortage of over-the-road drivers. According to Omarah, the shortfall is estimated at about 50,000 drivers, and that the age distribution of the 850,000 or so currently driving suggests the shortage will get significantly worse, not better in the coming decade.

After laying out statistics about driver pay for long-haul drivers, which in relative terms is par with college grads these days and way better than those with only a high-school diploma, he notes most drivers quit in their first year, turnover for full truckload fleets that runs the 90% range according to the ATA. “Maybe the combination of homesickness, licensing and regulatory hassle, financial responsibility and aggravation with road congestion merits a raise.” Amen to that. Contrast that to the same ATA data for less-than-truckload (LTL) fleets. In the first quarter of 2016 he points out, turnover for LTL fleets was only 8%. “Something is obviously much better about these jobs,” he said.

On that data point, Omarah begins to point out a vision of where the industry could take itself structurally and operationally. He recommends looking at it from the customer back, suggesting that because LTL drivers generally work closer to home and often have regular customer drop locations these drivers have both an incentive and an opportunity to develop a long-term career. They live and work closer the customer. According to Omarah, the highest “customer touch” jobs in trucking may be in the parcel business, where earnings at UPS, for example, often exceed $70,000 per year.

When you consider how technology is extending supply chain transparency to LTL fleets, including mobile devices tying into enterprise systems for inventory visibility and order management, as well as the internet of things enabled devices along the chain, Omarah says “you have a truck driver who’s an intimately demand-driven extension of your supply chain,” and I think he’s right.

And he goes on to describe a vision of a way forward. All the technologies associated with autonomous trucking and related automation enabled driver support technologies (platooning) have the potential to provide a solution. Why not use those technologies to take care of the tedium and danger of long-haul truckers navigating the interstates and leverage the LTL advantage to keep and retain a higher level, and more engaged professional labor force?

His unified theory posits urban transfer stations, staffed with expert drivers aka “technology enabled supply chain professionals,” receiving the automated long-haul vehicles and processing freight from there for local and regional delivery. Some imagination! But his vision has merit, especially considering how pervasive local shipping and delivery has become since the advent of internet commerce. While it’s likely the industry will not likely operate exactly like his vision suggests, he offers some tantalizing solutions to trucking’s toughest issues.

Source >

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