I attended the BluJay Solutions Soar conference last week. In one of the tracks Robert Nathan, Chief Supply Chain Officer, at Capstone Logistics was talking about logistics trends including real-time shipment visibility.
He made the point that real-time visibility is a hot topic. Everyone seems to want it. But even if you buy this solution, you do not get 100% visibility. And the visibility has gotten worse because of recent regulatory changes.
Real-time visibility solutions provide shipment visibility to trucks. The visibility is starting to expand to other modes, but the hot application is truck visibility. In addition to real-time tracking, these solutions provide an ETA calculation, generate exceptions when a truck looks like it will arrive late, and provide last mile routing. Providers of these solutions include project44, FourKites, Trimble, Descartes MacroPoint, and BluJay Solutions MobileSTAR.
The visibility is based on integration to truck carrier’s systems. The carriers in turn are tracking the ELD devices on their trucks. Or visibility can be based on a downloadable app that the driver puts on his smart phone. Or visibility used to be based on a driver providing their cell phone number and opting in to allowing the cellular carrier to track them. But a new law on data sharing has gone on the books and that has eliminated this method for tracking trucks. The result is lower levels of visibility.
The reason that compliance is not 100% is because of compliance issues. Big carriers who track the ELD devices on their trucks can give close to total visibility when the loads are carried by their trucks. But even Toyota reported at the Descartes Evolution conference that they were not getting total visibility despite the use of a Lead Logistics Provider (LLP) to carry goods into one of their plants in Canada. The problem is that the LLP could not always take all the loads. When they tendered out to smaller carriers to pick up the loads they could not take, the compliance of drivers on those runs was problematic. The drivers might download the app, and then turn off their phone or even uninstall the app. Many drivers do not like the idea of Big Brother watching them.
For some of the client’s Capstone Logistics works with they got close to 90% visibility. But as Mr. Nathan pointed out, “Let’s say you have 100 million in transportation spend and you work with 50 carriers. You are probably spending $30 million on freight brokers. These freight brokers are using owner operators.” And the smaller the carrier, the more likely you will have driver compliance issues.
But Mr. Nathan asks, “Do you need 100% visibility to drive ROI?” How are you attempting to use the solution to drive ROI? If you are using it track inbound deliveries to a JIT factory line, the closer to 100% the better. “But if you are using visibility to make sure goods are on a cross dock before a truck arrives, do you need 100% visibility? Maybe not.”
At this point a discussion with members of the audience ensued. Some of these folks worked with companies that were using these types of solutions. They were achieving about 70% visibility. But as one audience member said, “our business case got us to ROI with just 50% visibility.”
What are some of the other benefit buckets and how much visibility is needed to get benefit in these areas?
- Having visibility to where a shipper is causing a carrier’s trucks to wait unnecessarily long periods. This causes the shipper to have to pay demurrage and perhaps even worse makes it less likely that carriers will want to take their loads in a transportation market that is still tight. In this case, much less than 100% viability can still allow a shipper to uncover places where their operation could be far more efficient.
- Last year, I saw two BluJay MobileSTAR less-than-truckload carriers talk about the fabulous ROI they got based on being able to consistently charge for demurrage and liftgate services. In this case you would want close to 100% visibility, and these two LTL’s were getting it. The MobileSTAR solution is designed to scan orders onto delivery vehicles and provide proof of delivery, something other solutions do not do.
- Providing commercial customers with the real-time visibility that they want to their shipments. If you want to be customer-centric, the closer to total visibility the better.
In conclusion, I always enjoy the BluJay Solutions SOAR conference. BluJay Solutions has had a change of leadership. The new leadership has promised to work hard to put customers first. Part of the leadership change involves hiring David Landau as their new Chief Product Officer. I have known David for many years. If you want to put customers first, hiring Mr. Landau is a very good sign.