Improving on the decades old practice of shipment visibility is all the rage right now, and it’s about time. For too long, shippers have relied on outdated manual processes to answer critical questions about location and status of freight in transit. Today, FourKites leads a new industry of shipment visibility providers that are taking us to the next level in shipment visibility. Aside from being more accurate, what other benefits can be achieved by implementing one of these solutions? How can you maximize the value of the new technology beyond simply replace the old with the new?
Below are three steps to achieving maximum value from real time predictive visibility. Follow these 3 steps and learn how shipment visibility can pay for itself many times over in reduced transportation costs and an increase in customer satisfaction.
Step #1: Get Connected
Many companies get stuck here, and to be fair, it’s a big challenge. The objective is to establish and maintain a method of exchanging the best available information with every carrier. For visibility, this means location and status information about the equipment that’s carrying the load. That includes every truckload, LTL, rail, intermodal, ocean, parcel, and air carriers in use. Each mode uses different message types and communication methods and the individual carriers have varying levels of ability to support the message dialog with their customers.
For decades, “best available information” meant EDI, check calls and carrier portals. It was understood that there was a time delay and human error built into these methods. It’s no wonder we’ve been searching for a more elegant solution.
Today, we have GPS data which offers accurate, timely, and reliable information. It helps that every truck on the highways in the US is now required to have an Electronic Logging Device (ELD) which constantly broadcasts its location to a central server. Other transportation modes use similar technology to accurately report their location. Using the geolocation of the asset carrying your load, we can know the current location and, without question, the exact date and time of every milestone.
Using a technique called geofencing, which puts a virtual “fence” around locations, truck arrivals and departures are recorded precisely. We no longer have to rely on a dispatcher to report that a truck has just left the yard or a driver to report that he’s “about an hour away”. GPS satellites are doing the work for us.
Exact locations and routes make it possible to calculate a reliably predictive ETA. The ETA calculation includes more than just the current time and the distance to the next stop. It also factors in truck specific speed limits & routing, traffic and weather conditions and is updated frequently. Accurate ETAs also account for the driver’s hours of services constraints. If the driver is going to have to rest while en route, that time has to be included in the ETA calculation.
For many shippers, a reliable ETA is more than enough to justify predictive visibility. With it, they manage their arrival times to customers and improve their on-time performance. For shippers with loads bound for a Walmart distribution center, this advantage can have a huge impact on reducing OTIF fines. One FourKites client who is a large pork producer reports they were able to increase their on-time performance to Walmart from 87% to 94% by implementing predictive visibility. The reduction in fees more than cost justified their project.
Step #2: Get Insights
Because geolocation-based visibility data is timely and reliable, insights gained from the data can drive cost savings. The savings come when companies leverage their insights to make better decisions. For example, carrier level insights help companies understand how their entire long tail of carriers is performing over time. Lane level insights help companies understand various metrics for each of their lanes and stop level insights help them to understand various metrics for each of their stops.
Below are two specific examples of how FourKites clients use the insights they get from real time predictive visibility to improve their processes and reduce costs.
Dwell Time Analytics
Detention is when a truck is delayed at either the pick-up or destination delivery location for more than the agreed upon “dwell time”. Real time visibility provides a geofence around pick-up and delivery locations to automatically log actual arrive and departure times. Companies with this level of insight into dwell times and accruing detention costs receive recommendations that reduce detention costs by better planning and scheduling. It is imperative for the shipper and customer to plan their labor and operations to reduce detention fees.
Appointment Reschedule Analytics
Measuring ‘reschedules’ provides insight into the reliability and robustness of supply chain planning between the shipper and carrier. An appointment reschedule happens when one of the parties wishes to change the planned pickup or delivery appointment times. Careful analysis provides insight into:
- How effective is schedule planning, overall and over time?
- Which carriers and stops need to be focused on for better planning?
- How many of the reschedules are ‘good’ vs. ‘bad’?
Good – If the carrier reschedules appointment for a better on-time performance or faster transit (based on historic data)
Bad – If the carrier reschedules appointment without much positive impact on delivery due to other constraints
- How many of the reschedules are organized and how many are last minute?
Last minute rescheduling could be considered as evidence of poor planning. Reschedules happening much prior to actual transit could be evidence of handshake agreements, misplaced priorities, or unknown assumptions.
Step #3: Get Optimized
Having reliably accurate and detailed status information opens opportunities to re-evaluate the entire logistics component of your supply chain. Let’s look at a couple of processes that are a concern to every Transportation Manager; finding available capacity and managing arrivals and departures at their locations. The ability to competently address these two challenges have a direct impact on your company’s transportation spend.
One challenge in matching loads to available capacity is knowing exactly when and where a truck will be empty and available. If known, the return route can be compared to other known loads to find backhaul possibilities. The goal is to eliminate empty miles. It’s not enough to know the appointment times for pick-up and delivery. If you’re to maximize the value of your fleet, you need to match the actual, reliable and real time status of the truck against all known loads.
Arrivals and Departure Management
In the US, statistics show that drivers actually drive only about six out of the eleven hours they’re allowed to drive before a break. That’s mostly because of inefficiencies at the warehouses and distribution centers that are their pick-up and drop-off stops. They spend too much time waiting for a door to open up or to have their trailer prepped for departure.
You can manage arrivals and departures efficiently if you have a reliable ETA for every inbound truck. With knowledge of the truck’s arrival time, an efficiently run warehouse stages orders in real time to be ready at the dock when the truck pulls up. At the drop-off location, the DC manager ensures that a door, staff, and equipment are available to unload the truck upon arrival. Today, there are companies who are reaping significant savings by optimizing their arrivals and departures at depots by using predictive visibility.