March 04, 2023
Last month we talked about inflation and the economy in trucking. Since then, it’s been a rollercoaster. Just when we think things are improving, the industry takes a hit. The feds increased interest rates are proving to be the biggest issue. Increased interest rates mean a decline in demand.
As inflation rates dropped, the fed's response was to raise the rates in order to keep consumer prices stable and demand down. For trucking a low demand means, you guessed it, fewer goods to transport and higher spot rates. Rates that are 63% higher than pre-COVID levels. So, while the trucking industry braces for even further drops in demand, we can still be hopeful for the economy to stabilize. However, there are steps to take to optimize business and it can be found in technology.
Technology to help make your fleet more efficient and therefore more competitive can be vital in an environment like today. FleetOwner recently set out to define the top-performing technologies your trucking company needs and why. We captured some of theirs and added a few of our own.
Dynamic routing is a flexible technology that can add adaptability and data (like weather and traffic) to inform routes in real-time. The software enables efficiencies in miles based on traffic congestion or collisions. The software can also aid in decreasing the distance traveled between each delivery. So, not only does it save time, it saves fuel and that is money.
Video in trucks is vital in defending the fleet and driver in cases of collisions and potentially fraudulent insurance claims. Public perception studies show that when trucks are involved in a passenger vehicle accident, 70% of the time it is the passenger vehicle’s fault but the public perception is the opposite. Video and camera systems can be critical in fighting claims and mitigating legal fees.
And speaking of collisions as mentioned above, misrepresentation of fault is pervasive. According to the Federal Motor Carrier Safety Administration, heavy trucks and busses only accounted for 4% of registered vehicles and 9% of total miles driven but were involved in 13% of accidents and 13% of overall fatalities. Because fleets can haul fuel and other dangerous materials, the damage can be tremendous which is why advanced collision mitigation systems are becoming standard.
Trailer tracking technology seems like a no-brainer. Asset tracking is one of the most important aspects of the trucking industry and provides security through visibility. It applies to trucks and certainly to the trailers that they are hauling. The amount of money saved by loss and theft prevention can make or break a company. These GPS systems can monitor the location of the trailer and provide data about the location and warn of high-theft areas to avoid.
Tracking has been a huge focal point in the transportation industry as many shippers, receivers, and customers rely on it to determine OTD, carrier scorecards, and more. So I would say that is one of the big things we have been focusing on recently. — Callie Graves, Saftey and Recruiting, D&D Transportation Services, Inc.
This technology has become mandatory for many carriers like D&D Transportation because much of what we do requires food compliance. As part of the Food Safety Modernization Act, those of us transporting human and animal food including shippers, carriers, and receivers are mandated to follow best practices for sanitary transportation. Those requirements include, properly refrigerating food, cleaning vehicles between loads to prevent contamination, and protecting food during transportation. So even though it is required, the technology demonstrates an effective way to optimize costs for loads.
It might seem obvious but since fuel is one of the major expenses for trucking companies, keeping a consistent eye on prices can save a remarkable amount of money. There are several apps to employ, and they can do everything from cutting costs by comparing prices in real-time or even helping to identify trucking clearance. Knowing that your truck can be accommodated helps avoid costly accidents. Some apps can help determine the lowest gas tax by state location and truckers should also use those reward programs consistently because every dollar counts.
Keeping engines tuned and tracking vehicle inspection and maintenance schedules can be vital in making sure your vehicle performance is optimum. Modern truck inspection and maintenance software uses the cloud to automate routine task scheduling which makes it easy to maintain a consistent routine. That approach will save time and money in the end while keeping you safe on the road.
So, while concerns about what you can't control like fed interest rate hikes, trucking spot rates, and lower consumer demand, there are still some things you can control. Let technology help identify efficiencies and mitigate waste so you can be as lean as possible in the tough times ahead.