Traditional thinking is that government transportation compliance programs, such as hours of service (HOS) regulations, cost companies money. If the focus of your compliance efforts is solely to meet the regulation, then I concur. But, that approach is a lost opportunity to reduce operational costs through better driver and vehicle performance. Instead of just meeting the regulations, fleet operators need to look beyond to the benefits of telematics and advanced tracking systems to change driver behavior, improve productivity, better understand vehicle performance and, for a large number of goods shipped, ensure that they arrive at their destination without damage. With the technology available today, the price difference between solutions that cost money to be compliant and solutions that help you make money through improved performance are only dollars per month.
Complying with government mandates such as HOS means that your drivers are not working the kind of hours that make them a hazard to the other drivers on the road. What HOS doesn’t tell you is, when your drivers were driving, were they as productive as possible? Did they excessively abuse your vehicles or the products they are carrying? This is where the money is to more than offset the cost of compliance.
Any fleet manager would say that they have good drivers and bad drivers, and that the good drivers are the most productive. Any competent fleet manager would also say that they have put together training programs and best practices to raise the level of their poorer performers. These same fleet managers would say that this approach does improve driver performance, but seldom reaches its full potential and is tough to sustain across their organization.
Why? Because it is nearly impossible to measure driver performance over the road without remote tracking and vehicle monitoring capabilities. Drivers know this and, while most are well intended, they do what they believe is best to get the job done.
A simple example is leaving the vehicle running while they are stopped for a pick-up or delivery or filling out paper work. It doesn’t take a lot of idling to run up large and unnecessary fuel cost, especially in these high fuel cost times. Regulations, such as the engine idling rule in New York City that aggressively fine fleet operators if they are caught idling over 3 minutes, further drive idling costs. Add to that the costs of reduced customer service associated with miles and operating hours of drivers driving off route or making unplanned stops.
Driver behavior also impacts vehicle maintenance costs. Excessive tire, brake and engine wear are related to speeding, hard cornering and braking, engine over-revving, etc. – and all are a function of driver performance.
For a number of sensitive products, driver behavior impacts the quality of those products. Take a product such as ice cream – it is easy to understand how leaving the door open too long at each stop results in thawing and freezing that ruins the product. What is harder to understand and track is how harsh driving can lead to failure rates in large screen televisions to abnormally climb. For “high dollar density” goods, such as televisions, a trailer of product represents millions of dollars in potential damage claims.
There has been considerable change within the technology markets associated with fleet management within the last several years. In the past, telematics solutions were cumbersome and extremely expensive to purchase and operate. Class-focused compliance solutions emerged that were much lower cost, but offered limited or no capabilities for tracing driver and vehicle performance and making corrective actions. Now, there are cost-effective solutions that combine the ability to connect to the vehicle’s bus and provide compliance reporting. In addition, there is integration with route planning and execution to help ensure that even if drivers are exhibiting good driving behavior, they are actually running the routes that are lowest cost and meet their pick-up and delivery windows.
Fleet managers must recognize the inflection point that is in front of them. Transportation compliance programs, such as hours of service, driver logs and vehicle inspection, have been the great awakening for telematics and tracking technology. Unfortunately, many fleet managers are failing to capitalize on the opportunity to improve their productivity by implementing solutions that only meet their compliance requirements. These are the solutions that “cost.” The advanced planning, mobile and telematics solutions available now meet the compliance requirements but also provide the driver and vehicle performance management capabilities that help change driver productivity, performance and safety. These are the solutions that “pay.”
Chris Jones is the Executive Vice President for Marketing and Services at Descartes. He has over 20 years of experience in the supply chain market, holding variety of senior management positions including: Senior Vice President at The Aberdeen Group’s Value Chain Research division, Executive Vice President of Marketing and Corporate Development for SynQuest and Vice President and Research Director for Enterprise Resource Planning Solutions at The Gartner Group.