When’s the last time you had your blood pressure checked? Did a blood test? Had a physical?
Chances are it hasn’t been very long and that, like most Americans, you monitor your health closely. But are you failing to do the same with one of your biggest cost centers – your private fleet?
According to Gartner Research Director, Bart De Muynck, as reported by Logistics Management, only 10% of small firms and 25% of medium-sized firms use a Transportation Management System to optimize routes and control costs. In our experience across hundreds of private fleet evaluations, that technology gap means companies are missing out on a 10% – 30% cost savings opportunity that far exceeds the cost of fleet optimization software.
Let’s take a closer look
Monitor fleet performance like your health – with data
Aside from paying attention to our various aches and pains, we monitor our health using data: body temperature, X-ray reports, blood tests and blood pressure readings…
Results that deviate from normal prompt intervention of some sort – maybe a new medication, a change in diet or a surgical procedure. In the absence of data, your body at least gives off signals of pain and discomfort. Your fleet does not!
Therein lies the problem.
Too many business leaders are blind to inefficiencies in fleet performance because they get no signals to the contrary. They may know the number of trucks and drivers and miles used in a particular month, but what does this data mean in the absence of an objective benchmark?
For too many businesses, the benchmark is current performance.
“The fleet ran 90,000 miles last month, which is consistent with the prior month so everything must be fine.”
“The logistics budget is typically 20% of sales, so as long as that stays in line, we’re OK.”
The simple but powerful question that these false assumptions ignore is: “WHAT IS POSSIBLE?”
The only way to know the answer to this question is to construct an objective plan, developed with truck route optimization software, that factors in all conceivable delivery parameters – from unload times to traffic conditions to drivers’ hours of service.
Large LTL carrier Frozen-Food Express (FFE) was brokering out a good portion of its loads to sub-contractors, eroding its profit in the process. Its plan was built on the assumption that existing trucks were running the most efficient routes possible. They were not. After implementing truck route optimization software, FFE finally got a true picture of the savings potential from maximizing fleet performance. The company not only reduced brokered loads by 90%, it was able to reduce its fleet size by over 100 trucks.
For fleet sizes of 10 or more, the number of possible truck routing permutations is beyond what the human brain can calculate in a reasonable amount of time. That’s where smart software comes in. Delivery data is loaded into a system that already houses known data on things like historical traffic conditions, average road speed and special customer requirements. In minutes, smart algorithms kick out an optimized truck route plan that achieves delivery objectives with the least amount of time and miles.
The same software can provide business leaders with the fleet-related data you need to monitor this huge cost center. Using reporting software, you can extract information from a system like Paragon to create regular Dashboard reports that give you an “at-a-glance” look at fleet performance, including trend lines. Typical elements of a Fleet Performance Dashboard report might include:
- Miles planned vs actual
- Driver overtime planned vs actual
- Percent of on-time deliveries
- Miles per drop
- Fuel per drop
- Load utilization
- Driver shift utilization
While truck route optimization software gives your operators a tool to improve daily fleet performance, the trend line data from the software lets you analyze that performance over time and address areas of concern.
Your body, your fleet
Americans are living longer and staying healthier because of advances in diagnosing and treating illness. But first, doctors need to know there’s a problem. That’s where data comes in.
The same holds true for fleet performance.
If your business continues to plan delivery routes manually, without the aid of specialized truck routing software, you’ll never know the true health of your fleet’s performance. And that blind spot can erode your profits for years without you ever realizing there’s a problem.