VICS, the Voluntary Interindustry Commerce Solutions Association, has a program called “Empty Miles.” It is an online backhaul solution that enables a collaborative business process for identifying transportation efficiency opportunities between trading partners. When I attended the annual JDA user conference a few weeks ago, one of JDA’s retail customers endorsed this program.
Empty Miles matches a shipper’s trailers that are returning empty with another pre-qualified shipper’s potential loads that can be collected and delivered along the return route. The service costs only $1,600 annually for VICS members and $1,850 for all others. This is low enough that most companies will achieve their full payback the first time they use the service.
The retailer described this as a three step process: Initiating, Communicating, and Executing.
The first step, Initiating, is the biggest. Using Empty Miles, a company can upload its lanes and search for complementary lanes. Once a match is found, the user contacts the other party, which starts the rest of the process.
Empty Miles is about creating relationships, either with carriers, shippers, or both. In this retailer’s case, they have been successful in creating relationships with two big carriers that they already had under contract. The retailer and the carriers agreed upfront on which lanes to work on and the rates, and both parties understood that there was a different rate structure associated with backhauls. The retailer then uploaded this information into its JDA transportation management system.
Loads are then tendered as normal. The carriers can either accept or decline a load based on their capacity. In short, both parties only execute if it is to their mutual advantage.
The retailer saved about $250,000 in six months. From an environmental perspective, it was able to translate these savings into a reduction in empty miles (about 600,000 miles) and reductions in carbon dioxide emissions (approximately 2.1 million pounds), which supported it’s green initiatives.
So, what does it take to be successful with this initiative?
- You need to load your lanes into the Empty Miles portal – ALL OF THEM! You need to review the portal frequently and “be aggressive.”
- You have to build relationships. This means reaching out to potential partners, introducing yourself and your company, and sharing information about lanes, constraints, and expectations.
- You need to execute on these tenders. You have to be willing to stay flexible to your partner’s changing environment. Just because a partner accepts backhauls today does not mean they will in the future.
The retailer’s future goal is to collaborate with other retailers using the portal.
(Note: JDA is an ARC client)