Many trucking companies struggle to expand their operations due to the their inability to manage their business properly. Although you can start a trucking business and grow it by purchasing more trucks, not having the right tools and technologies in place may hinder successful growth. When increasing the number of trucks and loads, it becomes more and more difficult to manage and keep track of your business due to the incremental increase in paperwork. Many established carriers that have been around for years tend to run their trucking companies in a traditional fashion by manually tracking their business with paper-and-pen type methods. To accelerate growth and become more efficient, you must adopt new tools and technology to gain a competitive advantage which will help you move forward faster in today’s dynamic market.
“Advanced computer systems and data analysis are increasingly being used by firms within the trucking industry and within the rigs themselves, helping reroute freight based on traffic patterns, recording the number of miles a rig has driven, and everything in between. This use of big data could potentially allow a fleet to optimize efficiency enough to operate at full capacity with fewer drivers, or let a company save enough money to raise wages and attract more workers” – U.S News & World Report, An Industry Stuck in Neutral
Below we have outlined some of the different types of technologies and tools that can help increase your company’s efficiency and accelerate growth.
1. Dispatch Software/Transportation Management System (TMS)
These types of software help manage and optimize both inbound and outbound transportation operations. While there are many different kinds of TMS available on the market, they all tend to focus on managing four key processes
a) Load management: TMS helps manage your open and closed shipments, view load details, include customer info, assign drivers and trucks to loads, upload documents. They help you keep everything related to a shipment or load in one place.
b) Planning and decision making: TMS helps determine the most efficient transport schemes depending upon what the user gives more or less importance to (fewer stops, transportation costs, shorter routes, etc.)
c) Database: TMS stores and manages all data relevant to your trucking business such as driver’s, assets, customer, and vendors.
d) Control & Visibility: TMS enables companies to have eyes on their freight along the way. While some TMS integrate with third-party tracking solutions, there are TMS solutions releasing this year that don’t require you to install third-party GPS devices in your trucks in order to have visibility on your shipments.
e) Measurement: Print reports and measure performance to determine inefficiencies.
Although cloud-based transportation management systems are beginning to take over the market by making it affordable and accessible for trucking companies of all sizes, the TMS market has been historically dominated by expensive on-premise solutions. Current on-premise transportation management systems have traditionally been adopted by larger trucking companies rather than small to medium sized carriers due to the high cost of deployment.
On-premise TMS solutions are generally expensive because they incur license fees and require management of the entire operations which include, but are not limited to: Machines (computer servers), installation, maintenance, ensuring uptime, backups, recovery, and troubleshooting. License fee and and cost for machines is all paid upfront as opposed to a monthly subscription fee for a cloud based TMS that offers the Software as a Service (SaaS). On-premise TMS are now becoming primitive solutions in today’s dynamic world where users own multiple connected devices.
However, 2016 is already looking like a bright year as there are cost-effective cloud based dispatching/TMS solutions that cater to carriers of all sizes. These will be available on the market very soon. Smaller trucking companies will finally be given the opportunity to manage their operations using these more modern solutions that they can access on multiple devices with ease.
2. Fleet Tracking Solutions
Fleet tracking solutions eliminate the need to constantly call/text your drivers to find out where they are or what the status of the shipment is. Gaining visibility for your trucks that are actively in-route allows you to increase your productivity throughout the day and gives you time to focus on growing your company. Some tracking solutions allow to connect customers to automatically communicate the location and status of trucks and loads. While the benefits of implementing a fleet tracking solution are hard to argue against, choosing the right fleet tracking solution is critical.
There are two types of tracking solutions available
- BYOD – Bring Your Own Device (BYOD) solutions are more cost effective and typically rely on driver’s phones or phones/tablets provided by the trucking company. These solutions can be advantageous due to their fast implementation and low cost, which are very attractive for small to mid-sized fleets.
- Third-Party GPS Devices: These tend to be more expensive due to the cost, maintenance, and installation of the device and thus are typically geared towards larger fleets.
Most established fleet tracking solutions have been targeting their sales towards larger trucking companies, and their pricing reflects that. Furthermore, most offerings require their GPS devices to be installed in each truck you would like to track. Similar to how transportation management systems are transitioning from being on-premise solutions with high deployment costs to cost-effective on-demand solutions that use newer technology, the current fleet tracking market is heading in the same direction with BYOD solutions.
3. Accounting Software
Running any company requires keeping tabs on your cash flow, income and expenses, which can be a daunting task if done by traditional pen-and-paper methods. Commonly used accounting software such as Quickbooks, Quickens, FreshBooks and Xero can help track all of the financials relevant to your trucking business such as managing your expenses, assets, equipment financing, accounts payable and receivable, profit and loss, etc… These tools coupled with your total miles driven can help determine what your cost per mile is for your trucking company. Understanding the accounting principles relevant to the trucking industry is important for any owner.
With today’s tools and technologies readily available, every trucking company has the opportunity to grow their business by working smarter, not harder. Despite the fact that some software can be expensive and initially bring your margins down, the ROI in the long term will be monumental due to the efficiencies they add to your operations; thus, allowing you to grow faster. In addition to TMS, Dispatching, Fleet Tracking, and Accounting softwares, there are many different trucking softwares readily available on the market depending on what features/functionalities you are looking for. Now that various emerging cloud based SaaS solutions are reducing the cost of investing in trucking software, there is something on the market for everyone.