In Part Four of this series, we examined several use cases for generating value from ELD investments, including improving fuel economy, safety, security, driver assistance, vehicle maintenance, customer experience/visibility, precise ETA, dispatching, route re-planning, and driver communications… Here in Part Five, we look at several additional use cases.
Detention and Utilization
The inflexibility of ELD-monitored HOS compliance means excessive detention at facilities can cause significant consequences and pain for drivers and carriers. When dwell time exceeds what was planned, drivers may not be able to complete the planned journey without a long break. According a 2018 audit report from the DOT’s Office of Inspector General, detention time reduces drivers’ pay between $1.1B to $1.3B each year and costs carriers $250M to $302M annually. The report also concludes detention increases accident rates by 6.2% for each 15 minutes of additional delay.
The ELD mandate may exacerbate the consequences of delays, but ELDs can also be used to fix the problem. The data provided by the ELD platform can be shared with shippers and consignees to help them see the impact of their actions on performance and cost. Carrier-Shipper contracts should include detention pay provisions.1ELDs can help prove that drivers arrived on time and show exactly how long it took before they were able to leave. Shippers may still be reluctant to pay penalties, but at least the conversation can be based on objective machine-created data and the customer can be made more aware of the consequences of their actions.
ELD data can also help in other ways to increase driver and vehicle utilization. Route planners will have more precise information about actual times for different routes, times of days, and customers. They can plan more realistic and optimized plans. According to the April 2019 Cass Freight Index, “ELDs (Electronic Logging Devices), which initially hurt the capacity/ utilization of truckers (especially small truckers), are becoming an ever-smaller impediment to capacity utilization and in some cases actually improving utilization to levels above those achieved before ELD adoption. Many of the truckers who were the most adversely affected are now getting most, if not all, of the original loss in utilization back. This is especially true in the dry van and reefer (temperature control) marketplaces of trucking. Even the flatbed segment of trucking, which initially faced the greatest challenges with productivity after the adoption of ELDs, is learning to adapt.”
Dispute Reduction and Resolution
ELDs can be used to reduce and/or quickly resolve disputes. They can contribute to an electronic proof-of-delivery (PoD) by including the ELD data showing that the vehicle was at the customer’s property at a specific time and day. The PoD could also include geotagged pictures of the delivery at the customer’s site, and if possible, a signature from the receiving person. Together these provide very convincing proof that the items were delivered in good condition. Looking to the future, as businesses start to use smart contracts,2 ELDs may play a role as one of the inputs into the smart contract, providing evidence that a specific service was provided at a particular time and location.
As mentioned above, ELDs can also record the precise actual dwell time at a location. The data can be used to bill customers for excessive detention. The ELD-generated data can be used to reduce disputes about how long the driver was actually on the site.
ELDs can also help corroborate non-culpability for truck drivers when there is an accident. The data will show exactly what speed they were going when they started braking, and location information. ELD data can also be used when there is damage to a customer’s property, for example, cracks in a driveway or collision with a structure. The ELD’s GPS data may prove that the truck was never in the location where the damage occurred.
ELDs provide a wealth of data, including precise location histories, granular vehicle data, and potential IoT/sensor-based data as well. This is truly big data, as ELDs for a moderate-sized fleet can generate tens of millions of rows of data each year; far more than can be handled gracefully by spreadsheets. ELD solution providers may not provide all of the analytic tools needed either, so third party tools might be considered to do certain types of analytics.
The data generated by ELDs enable many different analytics, such as:
Geospatial intelligence – dangerous intersections, pothole detection, high-risk routes and times (reducing cargo
Optimized route planning – time-of-day/day-of-week route optimization, accounting for HOS constraints.
Optimized DC dock scheduling – for private fleets, ELDs can reveal patterns that can be used to optimize dock scheduling, taking into account HOS constraints.
Fleet and driver utilization – uncovering opportunities to improve utilization.
Pricing and profit optimization – with visibility into the true cost of different lanes and shippers (using accurate transit and detention times), carriers can optimize their pricing to account for cost-to-serve.
Driver safety and performance – identifying best and worst driver behavior to reward and correct it.
The range of analytics possible is only limited by imagination and resources. A rich set of pre-built analytics from the ELD solution provider, with easy customization, can go a long way. Otherwise, carriers and fleet owners may need outside help to build out the analytics they are looking for (unless they already have data scientists on staff). Investments in analytics can be well worth it. They can bring substantial improvements to performance, utilization, safety, and profitability.
Digital Supply Chains, Autonomous Supply Chains
Companies are striving to make their supply chains digital. This means moving from manual processes (based on paper documents, email, fax, phone calls, and rekeying of data) to automated, instrumented, fully connected supply chain processes. An in-depth definition can be found in The Digital Supply Chain Imperative, which defines the characteristics of a fully digital supply chain as: zero data entry redundancy, instrumented supply chain (data about various events in the supply chain is automatically generated via barcode, RFID, GPS, IoT, etc.), management-by-exception, with intelligence fed by fine-grained data. Sophisticated shippers are determined to create digital supply chains and hence are demanding that carriers provide them with precise, real-time location information about each shipment. In some cases, it has become a requirement for any carrier the company uses.
That requirement will only get increasingly widespread and stringent as these large manufacturers, wholesalers, and retailers strive to take the next steps, building out autonomous supply chains.3 Getting to a fully autonomous supply chain is a goal that will take many years. But some very large shippers are making serious attempts to start that journey now and it is creating a hunger for accurate, granular, real-time location data. One major retailer we talked to has been trying to improve the ETA accuracy for end-to-end shipments and has been frustrated by the inaccuracy and incompleteness of the visibility data they are able to get from carriers. They have a strong and clear preference for carriers that can provide consistent, accurate, real-time location. While today it is primarily the visionary large companies that are doing this, the use of autonomous supply chains will widen and spread over the next several years. The demand for precise real-time data will only increase.
Most organizations begin their ELD initiatives focusing strictly on compliance with regulations. However, if they stop there, they are missing out on significant opportunities to realize additional value. Here we have discussed a number of uses cases that carriers and fleet owners can implement, leveraging their ELD investments for expanded benefits and returns. Companies would do well to create a prioritized roadmap of these use cases, to build an ever-expanding ROI from their ELD investments.
In Part Six of this series, we discuss what characteristics to look for when selecting an ELD platform, devices, and applications.
1 Two hours of unpaid detention time followed by $50 per hour is common, though some suggest $75 per hour or more. — Return to article text above
2 A smart contract is a computer-enforced contract that is automatically triggered by a mutually agreed specified set of conditions, typically based on data generated by IoT devices, enterprise systems, and other sources. — Return to article text above
3 This is not about self-driving vehicles, but rather self-driving supply chain processes. The ultimate goal is full automation of supply chain and logistical planning, execution, and exception-handling. It is a journey that will take decades to fully realize but is starting now. — Return to article text above
To view other articles from this issue of the brief, click here.