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Trucking Industry

Lasting Changes May be a Result of Contactless Delivery Methods Brought About by Pandemic

May 24, 2021 by Levinson and Stefani Leave a Comment

trailer, truck, container

The pandemic has brought with it many changes across the trucking industry, from shut-down rest areas and shipping ports to changes in road safety and manufacturing capabilities–but one positive change has clearly been the speed and efficiency of contactless deliveries.

In early 2020, The Consumer Brands Association collaborated with carriers, truck manufacturers, and retailers to outline contactless delivery method standards and test their usability.

“The task forces put emphasis on documenting the underlying use cases, understanding current processes, talking about what the technology would enable going forward, and then laying out the standards and publishing that,” explained the vice president of supply chain at the Consumer Brands Association, Tom Madrecki. “This is where we think that contactless delivery is headed.”

The task force has worked diligently to put in place various pilot programs that allowed it to easily test specific contactless procedures, Madrecki said. Companies have also been able to implement many short-term contactless methods including social distancing and communicating to dockworkers from the cab. However, aspects like paperless technology may be key to a lasting contactless system.

“The open question is, ‘How do you scale new technology?’” Madrecki added. “How do you accelerate carrier adoption? How do you get the facilities on board? How do you ensure that if people have different technology solutions…they’re quickly adopting those, and…they’re all sort of similar?”

Still, though, contactless options have seen massive shifts even in the short amount of time since the pandemic began.

“I think, at the start of the pandemic, contactless pickup and delivery was really for the sake of social distancing and keeping drivers physically distant from warehouse employees, shipping clerks, and guards,” said Vector Logistics co-founder, Will Chu. Vector is a provider of logistics software to fleets. “There’s a lot of traffic, a lot of people moving in and out, and you think about distribution facilities and the number of people coming in–[they are] definitely hot spots for potential outbreaks.”

In particular, Chu said, paperless systems save companies a lot of time by reducing the travel time from the staging area to check-in and by diminishing lines that would grow at the entrance of facilities. This also allowed companies to gain more overall insight into how time can be much more easily managed.

“We’ve been able to reduce dwell times from 30% to 50%,” explained Chu. “We’re replacing a process that really involved a driver speaking to multiple people, getting in and out of their cab multiple times to get paperwork, to sign paperwork. They’re removing into a process where everything can be done from the comfort of their own cab, over a mobile app.”

These time-saving contactless procedures will likely be here for the long term, Chu added.

“The conversation has shifted from safety and social distancing to efficiency and visibility,” he said. “That has been the larger driver of process and business process change. You’re moving from a system where it was just a physical piece of paper to now a digital system.”

Although these changes have been a long time coming, it seems COVID-19 has forced them to finally come into play at warp-speed. Now, companies like XPO Logistics and Ryder System Inc. have boosted their contactless delivery methods by incorporating contactless customer interaction through procedures like synchronized e-signature capture.

“Contactless and electronic supply chains have been a growing necessity in the industry for many years, and the pandemic has accelerated the need to innovate and adapt quickly,” noted Coyote Logistics chief network solutions officer, Nick Shroeger. Coyote has been working with the CBA’s task force. “While many of the recent advancements in contactless technology have been rooted in creating safer operations and working conditions for members of the supply chain, there are additional benefits to these solutions.”

Those solutions include overall cost savings brought about by automating data storage and paperwork, decreasing dwell times, and allowing for the full reconciliation of deliveries, Shroeger explained. The improved efficiency from these changes is showing that they are likely to become a permanent part of the trucking world.

“There’s a lot of success, not only around keeping workers safe,” said Madrecki, “which is the original premise, of course, and [in] trying to minimize interaction, but there [are] actually a lot of documented cases of enhanced efficiency when it comes to the speed that a driver can get in and get out.”

Confidence Report Updates Show Truck Lightweighting Will Become More Common

May 23, 2021 by Levinson and Stefani Leave a Comment

A recently-updated confidence report from the North American Council for Freight Efficiency is predicting that North American Class 8 trucking will be undergoing much more lightweighting with the implementation of more and more electric trucks on America’s roadways.

Currently, many truck buyers have been shifting towards lightweighting incrementally while others may already require it, but, according to the Lightweighting Confidence Report’s updates, these efforts may begin increasing steadily.

“The key is that lightweighting is not a fuel economy option like it is in cars,” said Mike Roeth, Executive Director of NACFE. “It’s a payload play. It’s freight-ton-per-mile efficiency. Do enough of that, and you could have fewer trucks on the road, less congestion–that’s a good thing.”

However, fleets have to be diligent about when and how they begin the process of lightweighting their trucks.

“If a fleet spends money to lightweight but doesn’t get more freight, then [it has] lost money,” Roeth added.

The report noted, primarily, that freight is becoming denser, shippers are loading more pallets onto trailers, and overall tractor and trailer weights have been on steadily increasing.

On America’s roadways, a large majority of trucks are dry van units, which only travel at maximum weight 2% of the time due to goods filling out trailer volume before meeting maximum weight or because routes are not ideal for hauling a grossed-out trailer volume, according to the report.

Now, NACFE expects that shippers will begin asking fleets to have trucks loaded to maximum weight–80,000 pounds–on 20% of their shipments instead of just 10%. Maxed-out trucks currently make up only about one-tenth of big-rigs on the road. Therefore, shippers will likely request that dry van units boost their maximum load on 4% of their hauls, double from the current average of 2%.

Bulk haulers, or fleets that typically reach maximum weigh on most shipments, only make up about 2% of trucking overall, Roeth noted. If these haulers utilize technology that can help reduce their weight by 500 pounds, they could save around $5,500 upfront.

“A good metric for the value of lightweighting technologies is dollar of upfront cost per pound of weight saved,” the report said. “For example, average bulk carriers will pay $6 to $11 [per round] for a component that weighs less, reefer- or certain dry van- dedicated routes [is] $2 to $5, and general dry van freight is $0 to $2.”

Originally, when NACFE first released its report in 2015, it believed more fleets would be reaching maximum weight limits more often “because packaging would get denser, load matching and digital brokers [would] get more freight on trucks, and the trucks were getting heavier because of more emissions components and driver amenities and aerodynamic devices,” Roeth said. These added components have increased average weights by 1,000 pounds throughout the last ten years.

“That trend, we think, still exists, it’s just a little slower,” Roeth continued. “And the truck builders have done a pretty good job of lightweighting their [bases, standards, and] trucks to help with the extra weight they added through the 2000s.”

Since 2015, trucks have been able to drop five pounds of weight by installing steel and aluminum wheels, as well as utilizing new innovations regarding cab, mount, and frame structures, Roeth explained.

“These options are out there and the supply chain is kind of ready to build them when they have to, and we think it is going to happen over time,” said Roeth, who added that truck manufacturers may begin selling newer lightweight features that have been in the works.

Some obstacles regarding the industry’s ease into efficient lightweighting include the current shift from diesel-run trucks to those that are hydrogen-electric or battery-electric. For the same shipment, an electric truck can be 2,500 to 5,000 pounds heavier than a diesel truck.

Many may think that a viable option would be converting existing diesel trucks into ones running on electric batteries, but that would mean there would be “less [of an] opportunity to try to take that weight out…at least in the first generation,” Roeth noted.

Another caveat? According to Roeth, t’s still much easier to haul heavy freight with two trucks–keeping them both under weight limits–than trying to lightweight a large load with just one truck.

Independent Contractor Rule Changes Facing Delays–John Stefani Weighs In

May 22, 2021 by Levinson and Stefani Leave a Comment

The regulatory freeze that occurred in late January following the inauguration of President Biden has subsequently delayed the actions intended by the U.S. Department of Labor to modify the interpretation of an independent contractor working for a carrier.

This is a typical occurrence with the entrance of a new president as regulatory landscapes will undergo large changes every time a new administration takes office.

“When there is a change in administrations, it is standard to have a regulatory freeze so new agency staff have some time to review the issues at hand, and the review can delay or pause the regulatory process,” said American Trucking Associations vice president of safety policy, Daniel Horvath.

In February, the Department of Labor announced a two-month delay on the final rule that would revise its interpretation of an independent contractor’s status in regards to the Fair Labor Standards Act. The rule was initially planned to go into effect on March 9th, and the DOL said its purpose would be to “promote certainty for stakeholders, reduce litigation, and encourage innovation in the economy.”

For now, the DOL said it would be delaying the effective date for this revision until May 7th and accepted further public comment regarding this change through the month of February. It had also announced that it would be withdrawing its previous opinion letter stating that motor carriers could offer safety equipment and training to their independent contractors without causing any conflict in relation to their statuses and independent contractors.

The letter was retracted because it had been “based on a rule that had not gone into effect” and was “issued prematurely,” according to the Department of Labor’s Wage and Hour Division. If that rule does end up going through as originally intended, it would give a new federal standard to motor carriers, allowing them to decide whether a trucker is an independent contractor or an employee–which the DOL said would likely be more beneficial than California Assembly Bill 5 law’s ABC test that is currently used to make this determination.

As of right now, it is difficult to know whether or not the modification will continue on as planned, undergo further changes, or be dismissed altogether under the new administration, according to deputy general counsel for American Trucking Associations, Richard Pianka.

“I think there’s an expectation that the independent contractor rule will go away, one way or the other,” he said. “We certainly know there are a number of groups that were not happy about the [independent contractor] rule who are likely to be influential and will be urging this administration to undo it.”

Executive vice president of advocacy for ATA,  Bill Sullivan, noted that ATA strongly supports this becoming a final rule. “This rule would provide a welcome step in the right direction, providing fleets and independent contractors with needed clarity,” he said.

Additionally, most public comments collected in regards to the rule changes were in favor of the new modifications, expressing their belief that it would boost work arrangement flexibility, clarity for workers, and business benefits.

However, some groups that have been looking critically into the consequences of allowing drivers to maintain their independent contractor statuses have concerns regarding the responsibilities and pressures that would fall onto the shoulders of these drivers as opposed to the companies for which they would be driving for–especially when the companies are typically the party with the resources to pay for damages and insurance costs in the event of an accident.

“If this rule goes into effect–shifting the legal burden from the large company to the independent driver–it’s all the more reason we need to see an increase in minimum insurance requirements,” said Levinson and Stefani’s John Stefani. “When something goes wrong and people are injured–or worse–the responsible party should have the means to compensate the victims.”

Additionally, when truckers are working as independent contractors, they may often feel the expectation to transport shipments as fast as they can, meaning that a driver may overlook his or her own health and safety to get the job done.

“The concept of an independent contractor–driver–is a bit trickier in the trucking industry because the reality is that these large companies are exerting a lot of pressure on the drivers to get the loads transported as quickly as possible,” Stefani explained. “And, as we’ve seen in many of our truck crash cases, those drivers react to that pressure by cutting corners, oftentimes staying on the road while fatigued or despite hazardous weather conditions.”

How the Pandemic has Shifted the Supply Chain – Part 2

May 21, 2021 by Levinson and Stefani Leave a Comment

We recently reported on some of the areas within the world of trucking that saw major, lasting changes due to the effects of the pandemic, such as the operations within state departments of transportation, road safety reports, and trucker advocacy and appreciation.

Another aspect of the industry that was highly affected–logistics. When companies focusing on logistics were able to implement data-driven technology and boost diversification, they were able to stay afloat much more easily during the COVID-19 era.

“Even if they themselves don’t necessarily have a diverse mix but they can figure out a way to flip [to a different type of load, and they] have the resourcefulness, they’ve been able to fare well,” explained Anne Reinke, President of the Transportation Intermediaries Association. “And some of our customers who can’t necessarily flip the switch have had a really tough time.”

At the beginning of the pandemic, logistics companies suffered large declines in volume, with some segments steadying much more quickly than others. Because much of the nation was adhering to shelter-in-place orders, the segments that thrived were those in alignment with what people needed at home, like grocery stores, Reinke explained.

“You’ve got to be nimble, fleet-footed, and try to broadcast your horizon–to the extent you can,” Reinke said. She also noted that some members of TIA kept in mind the mantra of: “We’ve got to focus on culture, we’ve got to focus on what we can control.”

Communicating with partners and customers was also much more beneficial when logistics companies worked to utilize the capabilities of data-focused tech.

“These companies that have invested in technological solutions to make themselves a difference-maker, to make [themselves] more predictive in terms of their carrier arrival times and their carrier relationships…Those are the ones that recognize how important it is to make those investments,” said Reinke.

Manufacturers comprised another group to make some key adjustments, especially while they were fighting for “essential” status at the start of the virus’ spread. Still, vehicle suppliers soldiered on regardless of any production delays or disruptions.

“HDMA member companies have adjusted to the pandemic with a keen focus on their workforces,” said Heavy Duty Manufacturers Association CEO, David Giroux. “It was critically important that our manufacturing sector was deemed ‘essential’ at both the state and federal levels. The designation allowed production to continue primarily without pause.”

One difficulty for manufacturers was the steeply-declining number of Class 8 vehicle sales, down to 191,900 in 2020 from 276,348 in 2019.

“We are now seeing the fragility of the supply chain as the shortages in the supply of goods from foreign ports and critically-important components like semiconductors and resins continue to cause headwinds,” said Giroux.

Additionally, administration operations and marketing techniques have undergone massive shifts, he added.

“Many trade shows, company events, and customer activities were dispatched to the virtual realm,” Giroux explained. “The return scenario is not yet in clear view.”

Finally, a sector of the transportation world that had to quickly change its operational systems–seaports.

Within a few weeks of the early days of the pandemic, the number of imported containers arriving in the United States from China dropped dramatically as sea shipments were canceled and the U.S.’s industrial capabilities began shutting down more and more.

Still, ports worked through these obstacles, proving their essential nature to the rest of the country, said Chris Connor, CEO of the American Association of Port Authorities.

“Throughout the global pandemic, America’s ports–in fact, ports throughout the Western Hemisphere–never stopped operating,” he said. “Port workers are clearly essential workers, ensuring the delivery of vital goods to grocery stores, businesses, and medical care facilities at major personal risk.”

Although some ports saw nearly a 25% drop in shipment volume during the pandemic’s first few months, most made extraordinarily strong comebacks by the summer following the boom of e-commerce, caused by a majority of Americans shopping online in lieu of heading to stores in-person.

“Countless millions of Americans were able to work from home with all the comforts of home at their disposal because the transportation system–with ports at the nexus–never paused,” Connor explained.

How the Pandemic has Shifted the Supply Chain – Part 1

May 20, 2021 by Levinson and Stefani Leave a Comment

Since the start of the pandemic over a year ago, the trucking industry and the sectors working alongside it have undergone many changes–and have had to overcome countless challenges. Here’s a look at some of the most highly-affected areas across the nation’s supply chain

For State Transportation Departments, the response to the pandemic varied widely across the country. Technology, in particular, was a huge factor in each DOT’s actions, according to American Association of State Highway and Transportation Officials president, Victoria Sheehan.

Sheehan also currently serves as commissioner of the New Hampshire Department of Transportation, which has continued having employees work remotely. However, when employees must work in-person, such as at construction sites, they have begun utilizing contactless ticketing and delivery, and have also made an effort to travel in separate vehicles to work sites.

Additionally, Sheehan said the DOT began distributing personal protective equipment on public transportation and modifying buses and trains for social distancing between passengers.

“Not only are our workers essential, but we’re transporting other essential workers to and from their employment,” she said.

Now, state transportation department employees have been working to set up call centers for vaccination appointments and vaccination sites. Although these kinds of tasks are new, most state officials were well-prepared for an emergency, including that of the 2020 pandemic.

“Our association and our state DOTs and all the partners we work with had to be very nimble in reacting to all of these emerging issues,” said Sheehan.

Another area that saw major changes–road safety.

“It was definitely a strange year for inspectors,” said roadside inspection program director at the Commercial Vehicle Safety Alliance, Kerri Wirachowsky. “In the beginning of the pandemic, a lot of agencies just stopped doing inspections completely, only stopping vehicles if they saw an imminent issue.”

Only 2.7 million inspections were conducted in 2020, as compared to 3.5 million in 2019. Even the number of roadside inspections throughout CVSA’s International Roadcheck dropped by 25% last year. Many jurisdictions removed inspectors from the road to assign them other responsibilities instead.

“Some jurisdictions redeployed people to work on things related to COVID,” Wirachowsky noted. “So, the actual number of people doing inspections went down temporarily through 2020. It varied from state to state.”

Additionally, some state troopers who also worked as inspectors were sent to help the violence taking place during the social unrest in Wisconsin and Oregon, she added.

The accuracy of CVSA’s numbers during this time may be slightly less accurate than previous years, as well.

“As far as my data presentations go, I’m not using 2020 data,” said Wirachowsky. “For me, violations data each year needs to be consistent. But when you have an emergency declaration from the federal government for the entire year almost, when some violations aren’t cited and trucks can run over their hours, that skews all the violation data.”

On a high note, though, another affected area of the industry was that of truck driver advocacy.

Truckers–as they worked around the clock every day of the pandemic to make sure hospitals and clinics had the medical resources they needed and that grocery stores were fully stocked with food and household goods–quickly became the heroes of 2020. Many members of the public showed their thanks with outward displays of gratitude and gifts for the nation’s truckers as the pandemic wore on.

“Last March, we didn’t know what we didn’t know, but it became clear just what an important role we were going to play in getting the country back on its feet,” said Chris Spear, President of American Trucking Associations. “Truck drivers became soldiers on the front lines of our response to the pandemic: delivering food, medicine, [personal protective equipment], and other essentials that made our long quarantines possible. And now, as the tide is turning, delivering the literal shots in the arm we need to finish the fight.”

This advocacy made it possible for the industry to get more done in its favor than ever before, Spear added.

“We were able to secure real wins for our industry: access to rest stops, distributing PPE and sanitizer all in the name of keeping our drivers safe and healthy,” Spear said. “We worked with lawmakers to ensure that economic stimulus reached carriers and drivers so they could keep the economy moving. We pivoted and adapted our series of meetings and events to keep our members safe, but connected.”

Venture Capital May be Vital in the Modernization of Trucking Tech Systems

May 20, 2021 by Levinson and Stefani Leave a Comment

Autonomous Electric Van semi truck car driving on a highway with technology assistant tracking information, showing details.

We recently reported on the growing number of trucking technology companies merging with startups to stay competitive in the industry. To avoid inefficiencies, though, convergence is key.

With these vendors bringing in more aspects of modern trucking tech into their businesses, hardware can easily become redundant. Therefore, many managers are having to work with various data streams, platforms, and logins.

For example, when Omnitracs first acquired SmartDrive, tech convergence became a priority. The company soon found that it could lower overall costs for fleets by merging in-cab applications, core devices, and data plans. It also discovered that carriers could make similar convergences on the back office side instead of having to work with a variety of host systems.

According to the company’s CEO, Ray Greer, Omnitracs was also able to consolidate data gathered by apps, onboard video capabilities, and telematics in order to boost visibility and bring the company further insight.

“You can begin to mine that to better understand the environment, better understand the conditions to improve the coaching of the driver, [and] maybe even [better understand] the management of the asset, the freight, and the delivery,” said Greer.

“This would not have been possible without venture capital funds,” added Bart De Muynck, research vice president of Gartner Inc., explaining that venture capital has helped the industry exponentially by bringing in new vendors and by helping fleets steer their companies in the direction of lower-cost and cloud-based management and safety software.

According to Greer, though, companies newer to the market have a more difficult time rising up against the competition and boosting their own technology than a more substantiated company would, and typically end up leaving the industry by becoming acquired.

In fact, most startups keep their eyes on rapid growth and high selling value as opposed to steady increases in profits.

“They’re building for growth, and they’re building to sell,” said James Langley, senior vice president of Trimble Transportation.

Convergence can become particularly tricky when trucking tech start ups produce some “really compelling solutions” regarding methods of data utilization and artificial intelligence application, Langley said, but they also will often create specific solutions for particular problems, which makes it difficult for their fleet customers to incorporate that solution into the software they’ve already implemented.

Langley came across this exact problem when he served as president of Dart Transit Co., a truckload carrier based in Eagan, Minnesota.

“I’d have people come in and present some really awesome technologies, and my next question was, ‘OK, does that mean I need another sign-on? Does that mean I need another portal? Does that mean I need another reporting tool?’ Because if that’s the answer, I don’t want it, because my people only have so much time in a day,” he remembered.

The trucking technology market has also become much more complicated in recent years as consolidation continues to become more common, and many vendors that work in competition in specific market segments are also, oftentimes, collaborating on certain tech integrations within other areas of the market in an effort to bring further convenience to the customers they share.

“My view, as the leader of Trimble Transportation, is [that] we have to embrace ‘coopetition’ because we have to support customer choices,” said Langley.

With all of these new and unique applications for trucking companies, many fleets will chose multiple kinds of technology to suit their individual needs, Langley added.

“If we want people to buy more of our solutions, our Trimble-branded solutions, it has to be the one plus one equals three. They’ve got to be better together,” he explained. “We’ve got to win on [the] value proposition. We can’t hold a customer back if we don’t have exactly what they need.”

The industry, as a whole, seems to expect these kinds of consolidations within trucking tech to continue in the coming years, especially as more improvements and advances are made in electric and automated vehicle technology, final-mile delivery capabilities, machine learning, and data analytics. The boosted innovation and investment that will come with these changes will undoubtedly bring more consolidation in this sector.

Finally, many companies won’t be able to go all-in on one platform unless it implements much better user experiences, better overall capabilities, and a much lower cost, De Muynck explained.

“On the shipper side, we have already seen a much larger desire for a single platform and supplier,” he said. “We have not yet seen the same appetite on the carrier side. The economic conditions of the carriers mean they have to continue to use their software for a lot longer, whereas shippers have no issue changing out a TMS, for example, after three years.”

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