The U.S. supply chain industry is under immense pressure as it navigates the complexities of the pandemic and other large-scale shifts. While a driver shortage may be a contributing factor, it’s not the only factor.
The solution is not as simple as hiring and training more drivers. The industry must contend with decades-old patterns of waste and inefficiency, and embrace innovation that will ensure the drivers we do have aren’t wasting money, fuel, and time dragging empty loads billions of miles per year.
To be clear, every player in this industry should be stepping up recruitment efforts, since every driver counts in a system stretched to its limit. But it’s not enough, and each time the labor markets change, and shortages appear again, we believe the cost of not embracing real change will rise.
Billions of empty miles and inefficient facilities
BMO Capital Research puts the overall number of empty miles driven at a staggering 30 percent, which adds up to about 65 billion miles per year — enough to drive to the moon and back over a hundred thousand times.
Believe it or not, it’s been more or less the same way for decades: studies going back to the ’70s ballpark empty miles at similar levels. With the advent of computerized tracking systems, email and online accounting, digital payments, and improved infrastructure, how can that be?
In our view, the freight industry has not embraced technology the way other major industries have. While warehouse and last-mile logistics have embraced automation, the trucking segment seems to be mired in old habits and business practices that result in empty trailers, wasted time and fuel, and lost revenue opportunities.
Most in the industry are familiar with these shortcomings. For example: it’s not exactly a surprise when a driver arrives at their pickup location only to be told they need to wait a full business day for their load. It’s lost time and money for the driver, which is bad enough, but like someone slamming on their brakes on the freeway, the ripple effect of these delays over time is what really hurts.
That load not leaving on time changes the timing of every interaction that driver has or planned in this tightly woven, interdependent network. Delays pile up as schedules are reconciled and accommodated. What started as a missed fax from customs can end up having a much greater impact including things like affecting many loads over a week, making many customers unhappy and, more than likely, putting more than a few empty trucks on the road.
By not just preventing such delays but offering real-time monitoring and options to drivers and fleets to mitigate their results, we can help reduce empty miles. That reduction increases the effectiveness — and paycheck size — of every driver out there.
Automation is the Solution
Modernizing the freight industry with the latest tech doesn’t mean things like lidar sensors and exotic materials. The opportunity to supercharge trucking and reduce waste is a matter of replacing analog business practices, not analog gauges and dials.
Instead of conjuring images of self-driving trucks putting drivers out of work, the word “automation” should suggest the ultra-efficient operations of a modern e-commerce business.
The year is 2021. Suppose you’re running an online store or service. Every aspect of it can be accessed by anyone, anywhere — and much of the paperwork and other time-consuming, rote tasks are automated and fully digital. Adoption of digital tools by brands and customers is well underway — it’s time for fleets and drivers to take advantage as well.
Imagine how automation of ordinary, slow-paced business processes could affect each aspect of the logistics field. Automated scheduling would allow shippers and carriers to create optimized, predictive schedules that are always up to date with the latest data from both. Real-time location data combined with internal metrics could create an effortless, flexible, and transparent system. With humans in the loop, the system can be tweaked as needed.
Meanwhile, drivers on the road or idling could match and bid on loads from their smartphones or laptops. At the same time, shippers could set up customized rules that funnel their inventory to preferred partners, driving repeated bookings and stronger shipper-carrier relationships. The entire system could prioritize preventing empty miles.
Pricing, invoicing, and payment can be automated as well, using machine learning to understand the fluctuations of supply and demand, season by season or day by day. Again, transparency and fairness lead this offering, and the benefit is in the real-time nature of rates. Nobody needs to wonder if the system is operating with their best interests at heart.
And who wants to fill out an invoice when the system already knows who contracted with whom, to drive what, and how far? Let computers do what computers do best, and drivers can focus on driving.
Applying technology and innovating on data and business intelligence means more loads arrive on time. Drivers can then maximize their hours and resources — and that’s good news for everyone involved top to bottom. Who knows? If even half of those 65 billion empty miles were loaded up, it might not feel like there’s a driver shortage at all.