Technology Powers LTL Leaders
As seen in the May 2011 edition of World Trade
Less-than-truckload (LTL) carriers have come a long way in their daily efforts to optimize their networks and fleets in order to provide superior, reliable, and consistent shipping options and services to customers.
No doubt about it-their task is Herculean. After picking up freight from numerous customers shipping to diverse destinations, they must deconsolidate and then consolidate all of those shipments into full truckloads and then dispatch linehaul trucks to final destinations throughout the country.
How do they manage to juggle all of the requisite operational functions assuring excellent execution of their planning to guarantee high-level on-time customer service? Technology is the answer.
What shippers want
“More and more LTL carriers today are offering multiple levels of service such as time-definite services or shorter transit time services in various markets,” reports Alan Erera, associate professor at the School of Industrial & Systems Engineering at Georgia Institute of Technology in Atlanta. “Being able to provide these services increases the network complexity, and the network design problems to support these service offerings are much more difficult. This is where various technologies play a significant role to help make the necessary design decisions in these complex operating environments.”
Erera adds that the technology supporting network design decisions still lags behind what carriers actually want to be able to offer, so there is still room to develop the technologies required so LTL carriers can further improve their offerings. “Shippers are looking for services they are familiar with on the package industry side of logistics, such as time-definite service or two-day-guaranteed service,” he says.
At Pittsburgh-based PITT OHIO, Scott Sullivan notes that from an IT perspective, customers are looking for real-time information. “And they want to be able to access that information anytime and anyplace, such as from their mobile devices, so they don’t have to go into their offices to log onto their computers for that information,” says Sullivan, the company’s CIO and CFO. “We see a lot of this demand because companies need real-time information to be able to make intelligent business decisions.”
What carriers offer
Recognizing that their customers require updated data throughout the origin-to-destination transit, carriers offer a wide range of technologies to help customers track and trace their shipments. Technologies drive dock management systems, handheld devices, onboard computers, routing systems, and electronically generated bills of lading and invoices. We visited with four carriers to discover what kinds of services each offers customers with the goal of providing real-time visibility into the seamless operations that move freight to its final destination.
Averitt Express
Technology certainly keeps the wheels of commerce well oiled. For instance, technology powers onboard computers and dock scanners for optimal efficiency, notes Brad Brown, marketing leader for Averitt Express, Inc. in Cookeville, TN. “These two components not only allow us to provide better visibility, but they also enable us to plan better. So for us, technology is a value-added capability that wraps around all the services we provide to our customers.”
Before these advanced technologies were available, load planning would not begin until all the shipments for a particular day were picked up and brought back to the terminal, explains Brown. Onboard computer functionality has changed all of that, allowing drivers to enter information about the shipments they pick up throughout the day.
“Folks used to have to wait on the freight because they didn’t know how much would be coming in or where it was destined,” reports Brown. “But now, there is instantaneous real-time information coming in constantly from our drivers, so loads can be planned more efficiently and we can get the freight out faster. This means we can provide better on-time service to our customers.”
Technology allows freight appointments to be made ahead of deliveries. “Every year, more and more of our customers are requesting appointments within a delivery window,” notes Randy Guidry, communications coordinator for Averitt. “It used to be that shipments would have to wait up to two days before they could be delivered, while the carrier made an appointment with the consignee. Now, we can call ahead to pre-schedule an appointment based on the anticipated arrival time. The technology allowing us to do this shaves days off appointment freight. Our customers really like this kind of service.”
Web-enabled technologies speed the entire process from getting a rate and booking a shipment to sending an invoice. “For instance, 20 years ago, a customer would have to spend a lot of time on things that just take a second to do using the Web,” explains Brown. “If a customer wanted to trace a shipment, they would have to make a phone call and wait on hold for their answer because there wasn’t the visibility to know where their shipment was. But today’s technology allows them to enter their customer or shipment number and within seconds they know if their shipment has been delivered-and they can trace that shipment along every leg the shipment travels.”
Customers spend less time getting rates for their shipments, thanks to technology. Instead of making a phone call to the carrier and waiting for someone to calculate the rate, shippers can simply log into the Averitt system and get an automated account-specific rate that includes the customer’s discount. “Customers can then go ahead and book a pickup online and that message is sent directly to the driver who is in that locale,” Brown says. “So there are so many functions that customers can do online in a matter of seconds that used to take about half an hour.”
Brown reports that one of the most popular online features is the ability to create electronic bills of lading. “This feature allows customers to save their commonly used consignees, so instead of having to write out consignees’ entire names and addresses every time, they can create an address book. Bills of lading can be submitted electronically, which saves them time, reduces errors and eliminates legibility issues that help create error-free invoices.”
Although Averitt operates primarily in the Southwest and Southeast, it is a member of The Reliance Network, allowing it to serve North America. The network is a coalition of eight regional carriers. “We developed a process allowing us to provide seamless coverage using technology that provides us and our customers with freight visibility,” notes Brown. “We can provide the same visibility on a Reliance Network shipment that a national carrier can provide from within its own network under its own roof,” adds Guidry. “We know where the shipment is and who is delivering it. It is as seamless a process as if that shipment were traveling on an Averitt truck.”
FedEx Freight
Since the recent merger of its two LTL networks, Memphis-based FedEx Freight has been on a trajectory to simplify and standardize its systems that use a myriad of different technologies, reports Rebecca McClendon, senior vice president of IT. As of January 31, the company implemented two services for all lengths of LTL haul. FedEx Freight® Priority is the fast-transit choice for reliable time-sensitive LTL freight delivery. FedEx Freight® Economy is the economical choice for reliable, less-time-sensitive freight.
“What is unique about these two services is they involve a single pickup, a single delivery, a single bill of lading, and a single invoice,” explains McClendon. “This simplified process is what our customers had been asking for over the years with their LTL trading partners.”
Before implementing these into single-point services, there were two separate networks requiring two different pickup and delivery drivers. “So if you were a mid-sized company with just three dock doors and you needed to use both our former regional and long-haul services, you would have had two different drivers showing up at two different times, tying up your dock doors,” explains McClendon. “Now, all our customers have to do is make one call to have both products picked up and they have only one driver to interact with.”
McClendon reports that FedEx is the first LTL carrier to offer both the priority and economy service successfully from within one pickup and delivery on all lengths of haul within its network. “The single aspect means there is just one company to deal with and one truck. We could not have offered this one-company service portfolio had we not had the technology we have to support multiple product offerings within our system. The technology enables our operators to make on-point decisions throughout the day as pickup movements are requested and operators balance our priority and economy selections.”
Handheld technology, with the ability to communicate valuable information where and when it is needed, enables these on-point decisions. “Say a call comes in for us to pick up one pallet, but between the time the call was made and the time the driver arrives for the pickup, there are actually two pallets,” explains McClendon. “Previously, we wouldn’t know about the additional picked-up pallet until the driver arrived back at the dock. But now, the driver can enter that information into the handheld and our load planners can pre-plan more efficiently. It saves us valuable time in planning efficient loads so we can get them out as quickly as possible.”
FedEx Freight operates over 360 facilities throughout North America, dispatching approximately 80,000 shipments every day. Some of its facilities have nearly 300 dock doors, since keeping freight moving seamlessly is a priority. The company utilizes forklift technology and dock door management technology to keep warehouse activities running wrinkle-free. And the company’s transit times reflect this, with very high levels of service.
Just ten years ago, information was static, McClendon says. “It wasn’t real-time information, so the information was static analysis leading to batch processing. Pickup activity occurred during the day and then at night our computers began crunching numbers in batch segments. That has all changed and now we incorporate the collected real-time data with business analysis that allows a service center manager to have a greater level of insight into what is happening within the operation.”
This real-time information provides improvements in cost containment and in the company’s ability to flex the workforce as incoming volumes require. “This technology has given our employees a greater sense of satisfaction because now they are part of the decision-making process,” says McClendon.
PITT OHIO
Customers are looking for seamless LTL services providing reliability and dependability, reports Geoffrey Muessig, CMO and executive vice president for Pitt Ohio. “This means they want reliable pickup service and consistent, claims-free delivery service. They also want accurate and timely invoicing. And, if any problems arise, they want their carrier to resolve them quickly.” Without today’s technologies, these demands would be difficult to meet.
PITT OHIO has its own in-house dedicated programming staff that develops requisite technologies based on the company’s business goals. “We have our customers’ requirements in mind as our goal,” says Scott Sullivan, CIO and CFO. “We use a combination of Web-based and client-server-based technologies to facilitate the process for our customers.”
Onboard computing on all of PITT OHIO trucks has improved customer service by providing real-time track and trace capabilities. “We can drive data to customers via our Web site right into their respective information systems,” Muessig says. “This eliminates the need for customers to make time-consuming unnecessary phone calls to monitor their shipments. We are also able to handle more shipments with the same amount of customer service representatives, which drives efficiencies in our operations.”
Two popular services are FastTrack and HeatTrack. FastTrack is an expedited service that customers can access via the Web, alerting the company that it has an emergency shipment, explains Muessig. “Customers can assure their shipment is priority-coded and is given priority attention as it passes through the network to be delivered by a pre-established time.”
HeatTrack is a service protecting shipments from freezing and is used heavily by the coatings industry. These shipments are also priority-coded and are kept at temperatures warmer than 32 degrees throughout the transportation process.
Technology has also contributed to eliminating the hours it used to take to issue invoices. “Just five years ago, we were mailing out 10,000 invoices every day to our customers,” reports Muessig. “Today, we can invoice just one day a week since about 80 percent of the invoicing we do now is done electronically.” Over the years, PITT OHIO has been able to reduce the number of people required for this function, redirecting employees to higher levels of work. “We were also able to reduce the amount of paper we use, while dramatically reducing our postage expenditures.”
PITT OHIO offers next-day LTL service throughout its core area from Chicago to New Jersey, which includes about 10 states. Additionally, it offers its customers service throughout North America through The Reliance Network. “The key aspect about this service is that it leverages technology through an information hub to provide the seamless exchange of information between PITT OHIO and our business partners who are the other delivering carriers in the network,” explains Muessig. “This means that a customer shipping from Pittsburgh can have the same real-time track and trace experience on shipments to Los Angeles as they might have on shipments going to Erie, Pennsylvania.”
The seamless operation of The Reliance Network would not be possible without today’s advanced technologies, say Muessig and Sullivan. “We are all sharing information behind the scenes,” says Muessig. “So although PITT OHIO is doing the pickup for our customer here in Pittsburgh and we are handing it off to our partner in California, our customer still can track that shipment via our PITT OHIO Web site while getting real-time updates as the freight moves from leg to leg as if it’s on one of our own trucks.”
Southeastern Freight Lines
About 98 percent of Southeastern Freight Lines’ pickup requests are delivered directly to drivers in under 45 seconds, reports Braxton Vick, senior vice president of corporate planning for Southeastern Freight Lines in Columbia, SC. “The information is sent to our drivers’ onboard computers and when they make the pick up, they key in a brief amount of information that is sent to our mainframe computer so we can better understand and prepare for our outbound operations that same night.”
The dock management system takes over the operation once the freight is received in the terminal and dock workers, equipped with handheld computers, scan freight and the dock management system advises through handhelds where that freight is going, who the shipper is, how many pieces are being shipped for that shipper, and what door they need to take the freight to so they can load it to the proper destination. “Our dock management system helps us eliminate mis-loads because if a shipment were to be put on the wrong trailer, the system would stop the dock worker from continuing,” Vick explains. He adds that about 74 percent of the company’s freight is delivered overnight.
Southeastern’s in-house imaging system technology, implemented back in 1993, can scan bills of lading and digitize them. It can then match up that information with customer information relative to a particular shipment. “This system automatically applies the proper pricing and generates an invoice,” Vick says. “This has been a big help for us and for our customers, providing 99.3 percent invoice accuracy.” When you are billing about 27,000 shipments a night, this technology sure does help.
Technology is nothing new for the company, which deployed handheld computers on trucks about 18 years ago and onboard computers about eight years ago, reports Vick. On the horizon, he sees the industry’s next big wave will be pickup compliance. “Delivery compliance has been a metric that carriers have been measured against for the last 15 years or so. But, there hasn’t been a lot of focus on pickup compliance. It used to be that only shippers would call us saying they have a pickup for us. But, today we are getting calls from third-party logistics companies and from consignees like Home Depot and Lowe’s who want to be able to control their own pickups.”
The problem is that many times the pickups are not ready. “When a truck is deployed to make a pickup, we invest a lot of money to be able to position that unit,” Vick explains. “If there is no freight there for us, we are out that money.”
Southeastern has been working with the Information and Technology Logistics Council (ITLC) of the American Trucking Associations (ATA) to pioneer the development of pickup compliance standards. “We began working with ITLC about two years ago and in about another year, these standards will be used throughout the LTL industry, and pickup compliance will be another metric by which carriers will be measured,” Vick reports.
Technology is a journey
It is certainly clear that technology in the LTL industry is not a destination-it is constantly evolving relative to the ever-changing requirements of the industry. “As a carrier, you have to constantly try to get better so you can achieve higher efficiencies and operational productivity,” says Averitt’s Brown. “It’s a must today to be able to provide your customers with the tools they need for supply chain visibility so their businesses can operate efficiently. As a carrier, you can’t ever feel as though you have arrived, because you must always be growing and evolving your technology to serve your customers’ needs.”
Erera at Georgia Tech would agree that technology needs continually to evolve. “There is still room for technology improvements that can drive even more efficiencies in the LTL industry,” he says. “The software and technology around routing and scheduling is quite mature. However, the more difficult problem is the network design problem, for which the available software tools and technology still have quite a bit of room for improvement.” wt
Contributing writer April Terreri writes frequently on a variety of transportation and logistics issues.