The Carrier Cash Flow Problem: Can Technology Help?
Estimated reading time: 2 minutes
Trucking companies have struggled in 2019, primarily from pricing pressure on shipping rates. Cash poor and without a safety net, many smaller fleets went out of business. For those that remain, salvation may come from technologies that reduce costs, mitigate risk, streamline operations, and differentiate small carriers from their larger, cash-flowing competition.
Carrier Technology: Justifying the Investment
The idea of investing in new truck technology when fleets are struggling may seem counterintuitive. Many carriers run their businesses on thin margins, chasing the next load to get by. This makes planning for the future difficult. But a long-term perspective may be even more important when overcapacity threatens survival, and technology can generate significant ROI.
The right technology can help carriers analyze market conditions, choose better loads based on time commitment and costs, and compete with larger carriers for the best shipper contracts. According to Drew Jahnke, Director of Sales at Oversize, technology can even create a competitive advantage for small carriers.
“Technology can expedite basic functions like quoting, passing information and data entry. Removing these tasks that clog up daily operations will let the team work on growing the business,” said Jahnke. “You only get paid for what you move, and it means that automating all these redundant tasks is the fastest way to gain better margins for your company” (FreightWaves).
Which Truck Technology to Choose?
When it comes to trucking technology, choices are plenty and go well beyond electronic logging devices (ELD). In fact, venture capitalists have invested billions in trucking tech firms—$2B in the first half of 2019 alone. Experts predict investments to surpass the $3.6B invested in 2018 by a wide margin.
Because of the ELD mandate, trucks have never been more connected. All the new data being collected creates opportunities for tech solutions to drive new supply chain efficiencies. And choosing the right technology depends on where those opportunities for efficiencies exist. When margins are thin, carriers can’t afford to invest in anything that doesn’t make a fleet more competitive.
This list of up-and-coming technologies is a good place to start investigating:
- Collision Mitigation Technology – helps drivers avoid costly accidents by warning of dangerous environmental and road conditions in real time.
- Driver Scorecards – informs real-time coaching opportunities and reduces fuel consumption from adverse driving behaviors.
- Dynamic Routing – streamlines routes to reduce miles, increase route density, re-route around congestion, save fuel, and maximize hours of service.
- Electronic Logging Devices – no longer optional, ELDs improve driver quality of life, increase job satisfaction, and reduce costly turnover.
- Forward-Looking Camera Systems – reduce costs by capturing footage to defend accidents and other claims, and monitor adverse driving behaviors.
- Trailer Tracking – enables visibility into asset locations, proper use of containers, understanding utilization rates, planning for asset purchases, maintenance scheduling, and even data for marketing purposes.
- Temperature Tracking – allows visibility into temperature control, proper cleaning procedures, protecting food, and generally avoiding contamination; avoids spoilage and claims, and helps produce a data trail for compliance.
Capstone and Carrier Technologies
Technologies continue to transform the transportation industry, and they’re not just bells and whistles. The latest solutions offer opportunities to slash expenses, streamline operations, reduce employee turnover, elevate your brand, and keep cash flow positive. And partnering with a tech-enabled 3PL to source freight for you can bring even more value. Contact us to learn more.