Compared to many other industries, the transportation industry has been on the slower side to adopt new technologies. Given the industry’s notoriously thin margins, this made sense for a time: fluctuating fuel prices and high labor costs made investing in technology with a then unknown ROI risky. But as demand in the industry rises, largely due to the explosion of ecommerce, transportation companies today realize they need to do more with less as they face challenges like a talent shortage and complying with a growing number of regulations.
Increasingly, that means using technology to improve efficiencies and lower business costs. A recent Teletrac Navman survey of more than 1,200 fleet operations and fleet management professionals from around the world found that despite a strong desire to manage costs (39 percent said it was their top business challenge), business owners say they’re also prepared to invest in their companies in a variety of ways, especially through technology. While 61 percent plan to upgrade fleets and 32 percent say they’ll hire new talent over the next year, 41 percent are implementing new technology for compliance and integrating technologies into their current organizational systems (33 percent).
Managing rising demand
The National Retail Federation estimated 8-12% growth in online retail sales in the U.S. this year, three times higher than the growth rate of the wider retail industry. While this ecommerce boom is great news for the transportation industry, particularly carriers, it also presents challenges for companies already grappling with thin margins.
To meet the rising demand, the Teletrac Navman survey found that 37 percent of companies outsource drivers, 30 percent outsource trucks, 30 percent plan more efficient routes for drivers and 12 percent use telematics and other kinds of technology to streamline their business operations. For example, companies use telematics to complete more jobs per day through digital routing tools that enable dispatchers to send updates directly to drivers’ in-vehicle devices. Telematics also help reduce travel time between job sites by using interactive mapping featuring truck-grade navigation and instant driver locations to determine drivers’ availability for jobs.
ELDs = opportunity or pain point?
Of all the compliance concerns fleet owners face, 73 percent of respondents put the ELD mandate at the top of their list. But on a scale of one to five, more than three quarters of organizations say they expect to be ready by the December 18 deadline, with larger fleets (101-500 and 500+ total vehicles) reporting higher levels of confidence than smaller ones.
The good news on ELDs is companies that are already using them reportedly see the benefits, which include saving time by eliminating manual processes (30 percent), a lower risk of compliance violations (28 percent), improved driver and public safety (16 percent) and greater transparency among fleets (14 percent). The bad news? Driver skepticism is high and while 32 percent of fleet owners are attempting to address their concerns through informational sessions, nearly the same amount (28 percent) aren’t doing anything at all.
Building (and keeping) a skilled workforce
While the ATA projects a driver shortage of 175,000 drivers by 2024, organizations are already feeling the heat: 23 percent of respondents named finding, retaining and developing talent as their top business concern. With nearly half of fleets employing a majority of full-time drivers, the need is urgent and fleet owners are investing in new ways to fill their talent needs with some turning to for-hire and contingent workers and others buying new equipment and vehicles to attract drivers.
A majority (58 percent) of fleet owners are also rewarding drivers for good performance and habits on the road, much of which can be tracked through telematics. While hiring new talent is a priority, so is retaining the drivers they already have and preventing turnover.
For more information on the 2017 Teletrac Navman Telematics Benchmark Report: U.S. Transportation Edition, fill out the form below to download the report.