Editor’s Note: The following is an excerpt of a research report published yesterday, “Trust the Network: The Way Forward in Achieving Transportation Desired Outcomes.” The research, based on a survey of over 300 transportation professionals conducted by Adelante SCM and commissioned by Transporeon, explores several questions: How much room for improvement do you believe still exists in current transportation management processes? What are your top desired outcomes from future improvements in transportation processes? How can the industry break free from the status quo to achieve these outcomes? Please visit the report page for more information about the research and to download the full report.
I’m sure you’ve heard the saying, often (but mistakenly) attributed to Albert Einstein: “Insanity is doing the same thing over and over again and expecting different results.”
From that perspective, transportation has been insane for a long time.
The symptoms of this insanity are ongoing waste and inefficiency, which manifest themselves in many different ways:
According to the American Transportation Research Institute (ATRI), trucking companies accrued over 17 billion total operating miles in 2019; 20.1% of them were empty miles (up from 16.6% in 2018). With an overall cost per mile of $1.65, trucking companies spent $5.64 billion driving empty miles in 2019. Similarly, according to Eurostat, most Member States in the EU fell in the range between 15% and 30% empty journeys (percentage of vehicle-kilometres recorded as empty).
In a survey conducted by the Owner-Operator Independent Drivers Association (OOIDA) in the United States, drivers who comply with the 60-hour Hours of Service rule “spend approximately 18% to 33% of their possible compensated drive time in detention, while those complying with the 70-hour rule spend 16% to 29% of their compensated drive time in detention.” With a national average per-hour operating cost of $65.11 reported in 2019 (per the ATRI survey), “detention can dramatically undermine the profitability of trips, possibly causing some trips to operate in the red.”
Waiting time is also an issue in Europe. In a survey conducted by Vehco, a fleet management solution provider, more than half of the carriers surveyed (53%) reported their drivers wait 3 or more hours per week on average (based on a 40-hour week), with 22% saying their drivers wait more than 5 hours per week. According to one carrier quoted in the paper, “If we did not have any waiting times at all, we would save about 10,000€ each month.”
In 2017, road transport was responsible for almost 72% of total greenhouse gas emissions from transport in the EU, according to the European Environmental Agency. Of these emissions, 19% came from heavy-duty vehicles. According to the U.S. Environmental Protection Agency, 82% of transportation greenhouse gas emissions in the U.S. came from road transport in 2018. Greenhouse gas emissions from freight movements accounted for 29% of transportation’s total in 2018, according to the Bureau of Transportation Statistics.
How can shippers, carriers, freight brokers, and other stakeholders in the transportation industry break away from this insanity to realize different results? In other words, what changes must the industry make to not only improve the status quo, but also drive innovation quickly in response to whatever new requirements, challenges, and opportunities tomorrow brings?
The first step is arguably the most difficult one: it requires all stakeholders to think differently, to follow the advice of Robin Williams in the movie Dead Poets Society:
“We must constantly look at things in a different way…Just when you think you know something, you have to look at it in another way. Even though it may seem silly or wrong, you must try…Dare to strike out and find new ground.”
For too long, transportation has been viewed as a highly fragmented industry. Shippers, carriers, freight brokers — they’re all fragments, thousands and thousands of them, like pieces of broken glass separated from a whole.
But what if you looked at the transportation industry differently, where the stakeholders are not separate fragments but nodes on a connected network, like dew drops on a spiderweb?
In other words, what if you viewed the transportation industry through a “network effects” lens?
For more on this topic, including the results from the web survey conducted with shippers, carriers, and logistics service providers from around the world, please download the research report.