Smaller trucking companies that are growing steadily are beginning to notice when they should start taking advantage of new management software.
For example, PVG Trucking out of North Carolina used simple Excel spreadsheets to organize its business for around eight years, and finally switched its management methods to an electronic transportation management system after its fleet grew to 28 trucks.
“It slowly became very cumbersome to keep track of all the different loads and accounting things and dispatches,” CEO Daniel Gusev said. “Consolidating everything into one software that did everything from invoicing to paying settlements and dispatching definitely saved time and manpower.”
The difficulty, however, is choosing the right system for your fleet, evaluating it properly, and putting it into place.
Because of this, a trucking company needs to have a solid strategic plan for its future growth as well as for its potential return on investment. Then, it can decide if and when implementing a new management system should happen.
“For smaller, emerging fleets, I think the two biggest challenges are cost and fear of change,” said director of sales and marketing for Transport Pro, Kelly Frederick. “If the fleet is not doing consistent volume and they don’t know what business looks like from one day to the next, cost can quickly become a barrier to entry.”
According to Gusev, who had his system supplied from Frederick, PVG slowly began utilizing the system, first implementing it into their dispatching methods and then into handling invoices.
The bottom line, though, is that it becomes more and more challenging to successfully operate an expanding trucking company with basic tools.
“It’s just obvious when you’re not meeting your customers’ needs [due to] a technological barrier,” said Ben Wiesen, president of Carrier Logistics. He said shippers will also tell carriers when a lack of technology is hindering business.
The move from simple methods to new technology often occurs once a company reaches from around 30 to 50 trucks in its fleet, according to senior director of product management for Trimble Transportation, Jay Delaney. However, “we’re seeing fleets of smaller size starting to make that jump,” he explained.
Delaney also said that smaller fleets that are seeing expansion are usually accustomed to handling business via phone call, but once contracts, mergers, and acquisitions start coming through, they consider bringing in management software.
“They can’t do it all on sticky notes and Excel spreadsheets,” said Rick Halbrooks, vice president of McLeod Software sales and marketing. “They can’t do it using Big Chief notepads.”
Additionally, as fleets grow and carriers look seriously into TMS implementations, they also need to think about the benefits of cost reductions. These savings that come from an increase in efficiency can be put right back into the company with more trucks, newer facilities, or lower and more competitive rates for customers.
But to make cost reductions possible, those seeking TMS choices for the first time should find some guidance. The capital investment involved with adopting one of these systems can be a struggle, but some vendors say finding a subscription-based service can alleviate some of those challenges.
Fully understanding how a system works can be extremely difficult “until you actually get in there and look at the screen and follow a transaction through its life cycle,” said Carrier Logistics’ Wiesen. “It’s easy to get very confused by the product offerings.”
Because of this, finding a reliable source to which a carrier can direct important questions is vital, according to Wiesen. A company should separate questions regarding what software does specifically, and evaluate every individual answer, he said. He also suggested a carrier hire a consultant to help with this analysis.
Many vendors say carriers should first look into the largest business aspects which they aim to manage with the software, regarding everything from dispatching to increased asset utilization.
The main goal should be to make sure “the higher-value areas are going to improve and automate,” said senior vice president of industry strategy for Descartes, Brian Hodgson. “There are a ton of a capabilities.”
One capability includes the configurability of assigning loads to specific drivers based on commodity or destination.
“Those are standard configurables in many TMS [systems],” said Hodgson. Customization, however, “can take you down a path…that’s expensive to implement from a software provider’s standpoint.”
All in all, once a carrier learns the ways a TMS automates tasks, operations staff will start to think differently about how they work.
“You can be more proactive,” said Trimble Transportation’s Delaney. ”When a driver is running three hours late, you can see that in the system and you can make an adjustment to save that load.”
He says this change in workers’ thinking will change overall behavior and maximize business potential.