Digitalization of Trucking

Digitalization, as an industry trend in the logistics world, has emerged quite late. However, now that digitalization and innovation seem to have caught up the industry’s pace, much transformation can be expected. Digitalization refers to using advanced technologies to integrate physical and digital worlds through a seamless exchange of information occurring at different supply chain nodes. Hence, the process helps improve productivity, use data analytics for informed decisions, automate mundane manual tasks, reduce the scope of error, and induce process excellence throughout the supply chain.

Logistics, as a whole, is experiencing this wave of innovation in automation and digitalization initiatives. When we refer to trucking, digitalization may refer to a comprehensive and automated system where processes are monitored and controlled by technologies that optimize operations while directly contributing to the bottom line. The extensive growth of e-commerce is a driving force behind driving digitalization in trucking. Changing consumer behavior, prolific e-commerce discounts, same-day deliveries are all changing the way products move at different stages of the supply chain. The need for digitalization in the industry is greater now than ever.

Elements of Digitalization in Trucking

Digitalization can be witnessed in broadly four segments of the industry: Goods, Conveyance, Infrastructure, and Business Processes. Therefore, the elements of a digitally enabled trucking system can be an autonomous communication system, remote diagnostics, real-time tracking and tracing capabilities, and seamless exchange of information among integrated systems. The large-scale penetration of mobile connectivity, smartphones, geo-location tracking systems, and sensor technologies like the Internet of Things are all contributing to the logistics industry’s digital revolution. With the growing need for data analytics, the future of trucking will be mostly dependent on critical insights from analytical systems to drive forecasts, meet demand, manage risk, and reduce costs.

Goods: Inserting tracking devices such as a tracking bar, QR code stickers, and RFID tags in goods are common. RFID tags are quite useful in providing real-time information about location or GPS and external climate conditions such as temperature and humidity. Having such tracking systems in goods and containers that carry these goods is particularly relevant because tracking them while on transit across geographies is necessary to provide real-time data and shipment status. Sensors, connectivity, and the application are the three elements that comprise the tracking technology for shipping containers. Sensors tell the containers’ location, and through connectivity, the data transmits to the application. APIs are used to extract this data further and put it on the logistics platform to be analyzed.

Conveyance comprises the trucks, delivery vans, and other vehicles equipped with sensors that report their location, speed, engine condition, etc. to the systems.Routing and navigation are integral elements of this aspect as they facilitate improved operations considering constraints such as congestion. Autonomous trucking is finding increasing mentions in enabling digitalization in the industry. 

The digitalization of infrastructure is also of utmost importance, including the things that support the transportation activities. The road infrastructure is the central element in the planning and management process of road transport. Thus, digitalizing roadways, terminals, distribution centers, logistics parks form an integral part of the initiative. Equipping infrastructure with sensors helps monitor their use and condition that enable effective traffic management systems to optimize capacity. Similarly, smart roads with sensors and data collecting devices that can detect collision points and warn nearby drivers can be of great use in avoiding road accidents.

Business processes are the glue that binds all the different elements of a supply chain. These processes support the transactional functions of freight distribution. Business processes such as inventory management, demand forecasting, assigning load to carriers, managing and allocating warehousing capacity, freight invoicing etc can all be digitized using TMS, WMS, and their integration with ERP. EDI (Electronic Data Interchange) has, for long, governed the integration of information between systems. Lately, APIs have enabled seamless data sharing for easy management of platforms and extraction of relevant data. Another technology that is enabling automation of business processes is Robotic Process Automation (RPA). This technology is non-intrusive in nature and leverages the existing IT infrastructure of organizations. The increasing adoption of Electronic Logging Devices (ELDs) as a replacement for paper logs is also an initiative to move to more digitized systems.

Benefits of Digitalization in Trucking

With the proliferation of e-commerce and the need for trucking growing leaps and bounds, the digitalization of trucking is needed more than ever now. The digitalization of trucking comes with its share of benefits that enable optimum fleet and space utilization, enhanced efficiency, significant cost-cutting, and integrated systems.

1. Optimum utilization

Empty runs of vehicles is a major cost in trucking. Inefficiencies of dispatching systems where trucks travel to pick-up destinations without load contribute to additional costs and wastage. Digital platforms interconnecting systems help in the consolidation of truck capacity are a necessity.

2. Enhanced integration

Digitization facilitates the integration of trucks in sync with the logistics chain through real-time data of locations, estimated shipment arrival times, and information regarding departure times to factories, warehouses, and customers. Such integrations foster timely delivery, better performance, and customer satisfaction, enabling them to track the shipments’ status remotely.

3. Enhanced efficiency

Digitized trucking enhances efficiencies at granular levels as well as in the broader scope of processes. By incorporating cutting-edge materials handling practices into daily operations, better allocation of space, capacity, and resources, enhanced inventory control, and significant cost reductions contribute to enhanced efficiency and productivity.

Digitized trucking will enable faster transfer of goods in and out of distribution centers and to end customers. Through easy track and trace capabilities and smooth booking processes, customer experience can be improved. Measurement of key performance indicators can further help improve operations. Furthermore, blockchain can enable the complete transparency of the social and environmental footprint of purchases shared with end-users. All in all, the digitalization of trucking as an industry is a win-win scenario for all

Trucker Issues During the Pandemic

If you could rate the best National Truck Driver Appreciation Week ever held, it still wouldn’t hold a candle to the surprising amount of praise heaped on drivers during the coronavirus crisis. Truckers have been classified “essential” workers. They’ve been lumped with health care professionals and others deemed heroes for taking personal risks to the benefit of others.

Quite a different tune than we’re used to hearing.

There’s a dawning realization that a professional driver is not just some nobody, virtually invisible up in the shadowy cab of yet another annoying big rig. That driver needs to eat, but can’t always find an open restaurant. Or when he does, he no longer can enjoy what might have been the day’s highlight: sitting down to a good meal in a truck stop diner, in the company of other drivers.

That long-haul driver embraces a new risk – that if he comes down with COVID-19 while far from home, he might end up self-isolating in a lonely truck stop. No doctor to consult in person. No family member to help while he suffers for days, wondering if he’ll make it.

Perhaps most important in this spotlight on drivers is a greater awareness of trucking’s mantra: If you bought it, a truck brought it. Though grocery shortages haven’t been severe, there’ve been enough empty shelves over enough weeks for consumers to rethink their attitudes about truckers. There’s a lot more at stake than toilet paper.

While support within the logistics chain has been great, readers have noted too many instances – often at the docks – where it’s not

It’s a shame, but no big surprise. Before coronavirus, certain shippers and receivers were known to prohibit access to restrooms or vending machines. Those access restrictions have spread or intensified in some instances as well.

And yet negative responses can be more subtle, more hurtful. It’s one thing to practice good social distancing or common sense in passing a pen back and forth. It’s another when someone’s body language or tone of voice makes a driver feel like he’s just climbed out of a porta-potty tank.

Hey, we’re in this together. Any one of us could be giving – or receiving – a contagious disease, so mutual respect, and even a little humor, goes a long way. As for the public’s newfound respect for truckers, let’s hope it lasts a lot longer than the crisis.

Van Rates Increase From the Beginning of the Year

June freight volumes finished the month strong, and rates responded to close Q2. Over the past six weeks, van rates have climbed about 10% on the top 100 van lanes. Last week, rates increased on 66 of those lanes and fell on only 24 of them. The remaining 10 held steady.

The national average van rate for June was $1.89/mi., which was 10¢ higher than the May average and the highest monthly average since January. That included large increases in major freight markets like Los Angeles (up 14%), Memphis (up 12%) and Atlanta (up 11%).

Freight volumes up 6% in 2019

Although van rates are lower this year compared to last June's record prices, freight volumes — the number of loads that actually moved in June — are about even with June 2018. For the first half of the year, van volumes are up 6% compared to the same period in 2018.

Rising Rates

Lanes with the largest rate increases were generally those moving West to East. The big surge came on lanes going from the Central U.S. to the Northeast.

• Chicago to Buffalo surged 31¢ to $2.56/mi.

• Memphis to Columbus, OH, jumped 27¢ to $2.51/mi.

• Buffalo to Allentown, PA, rose 15¢ to $2.99/mi.

• Memphis to Chicago gained 13¢ to $2.41/mi.

• Out West, Stockton, CA, to Portland also added 13¢ moving up to $3.02/mi.

Falling Rates

While almost all of the major van markets showed price gains, rates coming out of Seattle dipped last week. Seattle has seen prices slip 6% over the past month.  Also, rates coming out of Houston were slightly lower last week.

• Houston to Oklahoma City slipped 15¢ to $2.02/mi.

• Houston to Dallas moved down 5¢ to $2.27/mi.

• That's about it. Other dips were just pennies per mile.

Credits: Mark Montague www.dat.com

Warehouse Management Problems and Solutions

Warehouse management is commonly associated with six basic tenets: accuracy, cost control, efficiency, cleanliness, safety and security, but the underlying processes are complex and dynamic, presenting major problems for warehouse managers across industries. Distributors have to deal with trade-offs due to resource limitations, leading to under performance in key functional areas.

Warehouse managers face the challenge of maximizing performance while balancing trade-offs under uncertain conditions. This article examines the top five warehouse management problems and their solutions.

Redundant Processes

Traditionally, warehouse employees have been likely to handle a product several times due to the nature of the warehousing process. This tendency lingers on in current practices. A notable redundant process in warehouses is where warehouse workers pass the same ticket through multiple hands.

While necessary in some instances, such redundant procedures are time-consuming and increase the cost of labor. Using barcode technology streamlines the warehousing process, removing redundant processes while maximizing resource utilization. Automated systems are evolving fast, a trend that compels warehouse managers to maintain up-to-date systems to achieve the desired results. 

Poor Facility Layout 

Efficient use of space is a critical success factor in warehousing.  Inadequate storage space and inefficient use of available storage are common problems in warehouses with poor facility layout. Poorly configured warehouses are a major cause for worry for managers because of the inherent potential for negative impacts on profits.

The optimal layout factors both the floor space and the vertical space available for use. In addition to maximizing the use of space, a good layout maximizes the use of equipment and labor, accessibility to all items and the security of all items. Using forklifts that reach the roof of the warehouse allows for a configuration that maximizes both the horizontal and vertical space.

The complementary solution is to ensure that the highest-selling inventory is easily accessible by placing it at the most accessible point.

Seasonality in Demand

Fluctuations in demand pose serious challenges for warehouse managers. The dip in sales due to the recent global financial crisis resulted in major cost problems for warehouses due to increased inventory levels. Although it did not affect all industries alike, the problem highlights the challenge of fluctuations in demand due to forces outside the control of the warehouse.

Managing seasonality in demand requires timely and accurate information about manufacturing, retailing and the industry. Information gaps between the warehouse and other relevant entities or the industry limit the ability of the distributor to monitor and respond to changes in demand effectively. It is necessary for warehouses to use timely and accurate information in planning and forecasting demand as well as in providing supply chain visibility.

Rearranging the products to match changes in demand helps minimize the negative impacts of seasonal demand. Such a rearrangement involves correct positioning of the items by placing the products with high demand during the current season at the front of the picking aisle and at the correct height.

Dealing with seasonality in demand, however, goes beyond just layout and picking. The problem also requires proper management of transportation networks and strategic sourcing of transportation services. These long-term solutions build a lasting capability with strategic value for the distributor.

 High Labor Costs

Warehouse managers strive to increase productivity while minimizing labor costs in a labor-intensive environment. Inbound Logistics estimates that labor constitutes about 65% of the operating budgets of most warehouses. A typical warehouse uses expensive equipment and employs a large labor force, presenting a challenge that is for the most part unique to warehousing operations. 

The staff ranges from cleaners and packers to managers and administrative personnel. Attempts to reduce the cost of labor should take into consideration the impacts of the move on other costs. The two major strategies for addressing labor-related problems include maximizing available labor and replacing labor with automated systems.

Developing the right mix of expertise through workforce planning helps managers hone the skills necessary for successful labor force practices. A combination of the right skills and motivation, through practices such as excellent working conditions, training and flexible hours, enhances employee productivity and the performance of the warehouse.

Inaccurate Inventory

Accuracy and efficiency in handling inventory in warehousing go hand in hand. Inaccurate inventory causes problems such as maintaining improper stock levels and buildups of obsolete inventory. Picking problems also arise when pickers rely on inaccurate information, leading to inefficient processes. Other costs of inaccurate stock information include increased expenses, lost revenue and low productivity. Automation is a key factor in solving accuracy-related problems.

Automated systems offer real-time, accurate information about stock levels and composition. The technology employed in managing inventory in a warehouse is critical to success because the value of the automated system is just as good as the quality of the system itself. A low-quality system retains some of the risks associated with inaccurate inventory. A careful and informed selection process reduces the risk of procuring an automation system that does not meet the needs of the warehouse.

Warehouses face increasingly dynamic environments as remote events in the global supply chain become more relevant to local business environments. The desirable approach when dealing with the challenges that arise due to new developments is to use inexpensive solutions that offer sustainable best practices. Warehouse managers should monitor and track changes in the business environment and adopt responsive solutions.

Common warehouse problems such as redundant processes, poor facility layout, seasonality in demand, high labor costs and inaccurate inventory information require robust systems that keep managers informed about changes and gaps that require attention.

Acquisition of Cargo Building C, The Plan for Growth

Worldwide Flight Services, an air cargo handler, is extending its North American network to Atlanta after winning the bid to operate in the airport's newest cargo facility. In attempt to grow its cargo business, Hartsfield-Jackson International Airport agreed on a long term lease with WFS to support the growth of the air cargo intake at the airport. The newest of of cargo buildings in the airport will begin operations in late 2019, while also revealing its customers more specifically in the coming months.

Air cargo is a crucial economic generator for Hartsfield-Jackson, creating more than 27,000 jobs in Georgia and more than $6.7 million in revenue for metro Atlanta, according to the airport's website.

In 2018, cargo volumes at Hartsfield- Jackson Atlanta International Airport rose 4.7% to over 700,000 tons, which followed a 7.5% increase in the previous year. However, global cargo demand fell 4.7% in April from a year earlier, according to the International Air Transport Association, with the biggest declines coming from manufacturing hubs across Europe and Asia. New export orders have also been falling recently due to Brexit-related trade uncertainty in Europe and trade tensions between China and the US, according to the IATA.

To contradict the decline, Hartsfield-Jackson recently came to the agreement with Amsterdam Airport Schiphol to create a catalyst of air cargo coming from The Netherlands!