TRUCKING: Logistics
Speaking the Language
The field of transportation and logistics is highly competitive. International and domestic companies all compete for shares of the roughly $1.5 trillion industry that is integral to the movement of materials and consumer goods across the globe. Air, freight rail, trucking and maritime transport are all included under the umbrella of logistics — and each has its own supply chain ensuring goods and raw materials are available.
Fleet managers can only work effectively within the logistics industry if they know the ‘language.’ Some concepts and terms are more widely applicable, while others are niche-specific, but these five are some of the key terms essential to the larger industry.
Supply Chain Management
Supply chains serve as networks between suppliers and companies to develop and distribute a specific product. Among the many moving parts involved in a supply chain’s delivery of a product or service to a customer are research and development, sourcing, production, logistics and IT systems. Supply chain management (SCM) is the act of managing the supply chain elements to achieve the maximum value while maintaining the highest level of efficiency at the lowest cost. Supply chain managers oversee physical materials, information and finances; they maintain the flow of materials and information through the supply chain.
Within logistics, a fleet manager will use information systems to effectively maintain and track his fleet of commercial vehicles as the products move through the physical flow of the supply chain toward delivery.
Demand-Driven Logistics
Demand-driven logistics refers to the application of data on fluctuating fuel costs, supply chain disruptions and labor and capacity availability. Applying this data helps create a proactive supply chain by gaining a competitive edge to minimize costs and delays within the chain. Demand-driven logistics encourages supply chain managers to collaborate at different points to eliminate inefficiencies from the chain. This includes engaging suppliers and applying detailed consumer data to manipulate the supply chain for maximum efficiency. Supply chain visibility tools and transportation management systems (TMS) both provide valuable data for this process.
A fleet manager may apply principles of demand-driven logistics when dispatching fleet vehicles by analyzing shipping capacities and routes to maximize efficiency. The data allows managers to evaluate past performance and mitigate inefficiencies — such as revising delivery routes or combining inventory into a single vehicle rather than dispatching two.
Telematics
Telematics may be a new concept within logistics, but it has already proven to forever change the way companies manage and conduct business. It is the application of telecommunication technology to send, receive and store data related to remote objects — like fleet vehicles. GPS fleet tracking technology, electronic logging devices (ELDs) and mobile devices are all covered under the umbrella of telematics. This technology has allowed fleet managers to effectively and efficiently monitor deployed fleet vehicles to reduce costs, increase productivity, increase safety and improve the customer experience.
A fleet manager working for a courier may use telematics data, for example, to learn that heavy traffic has slowed a fleet vehicle en route to a delivery and the estimated arrival time has been delayed 45 minutes; this data may be made available to the recipient, allowing time to make any necessary adjustments.
GPS Fleet Tracking
GPS fleet tracking is based on telematics technology that leverages global positioning systems connected to remote objects and uses satellite technology to transmit data regarding the object’s location to a receiver. GPS fleet tracking systems gather and analyze data providing user insights to improve vehicle routing, manage fuel efficiency, maintenance costs, monitor driver behavior and track asset locations and conditions.
A commercial automotive insurance adjuster, for example, may request GPS fleet tracking data when reassessing a company’s insurance premiums. Data that indicate safe driver behavior may positively impact a company’s fleet vehicle insurance rate, whereas unsafe driver behavior may increase insurance costs.
Electronic Logging Devices
Electronic logging devices (ELDs) are computerized devices located in the cab of each fleet vehicle. The devices collect and transmit data including the vehicle ID, location, miles traveled and condition. They also provide driver-specific data such as hours of service (HOS) and on-duty/off-duty statuses. Replacing old systems of paper logs, ELDs ensure that compliance expectations are met in real-time, cutting down on process inefficiencies by eliminating paperwork, costly fines and reducing human error. It has also allowed for the application of demand-driven logistics and revisions to the supply chain to increase efficiency.
A dispatcher may review driver ELD data to determine if a specific driver has enough remaining legal hours of service available to complete his current delivery. If not, he’ll be taken off duty in order to remain compliant with federal regulations set forth by the Federal Motor Carrier Safety Administration (FMCSA), under the US Department of Transportation.
These concepts and key terms are only the tip of the iceberg. For more about the language of logistics, check out the following resources:
· World Wide Web Virtual Logistics Library
You can never know too much!
Alkane thanks Rich Lambourne, writing for Teletrac Navman, for the content of this article.
Alkane Truck Company is currently raising capital on the crowdfunding platform StartEngine. Find out more here: https://www.startengine.com/startup/alkane
