D.C. Area Freelance Writer

iTECH: The Best Lane Boosts the Bottom Line

Mindy — Thu, 08 Sep 2011 02:31:18 +0000

Technology Helps Carriers Determine Which Routes Will Maximize Their Profits

By Mindy Long, Contributing Writer

This article appears in the Aug./Sept. 2011 issue of iTECH, published in the Aug. 1 print edition of Transport Topics. It is online here.

Trucking companies are finding that not all freight lanes are created equal financially. So, many of them are turning to software products — packages that include everything from mapping technology to detailed cost analysis — to help them choose the routes that will most boost their bottom lines.

Take Mark Stein, director of operations for Central Freight Lines, for instance. He said that for the Waco, Texas-based less-than-truckload carrier, which ranks No. 92 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire fleets, the type of shipments and strong terminal-to-terminal combinations factor heavily into what makes a strong lane. So does balance within the network.

“Adding additional freight in a specific lane may be profitable, but if it places your network out of balance, you can increase your cost on all freight in that lane,” Stein said. “In converse, adding something that may not seem profitable may balance it out and make everything profitable.”

The technology draws on everything from a fleet’s historical data to its specific customer information and allows carriers to find statistics on revenue and expense per lane, per customer and even by load type or day of the week. 

The software packages build on route optimization functionality not only to identify the most efficient path to a delivery but also to provide programs powered by complex algorithms that draw on mountains of data — such as profit and loss statements, dispatch reports, driver dwell times and equipment expenses.  

The technology then crunches the numbers and produces detailed reports that allow carriers to drill down to specifics and help them price their loads, eliminate hiccups and find the right balance for their networks.

MinStar Transport Inc.’s Jody Farley is the technology manager of the Eagan, Minn., carrier. She began using software to help analyze her fleet’s profitability and realized that Iowa provided the travel lanes that best improved her company’s bottom line.

“We’re finding that some lanes are more profitable than we thought, and Iowa is really profitable for us,” Farley said.

Additionally, by crunching the numbers, she said, she learned that MinStar’s double-deck trailers — with two levels inside each dry van — are the most profitable.

What works for one company, however, does not necessarily work for another.

“It isn’t always black and white,” said Mark Kubine, vice president of marketing for McLeod Software, Birmingham, Ala. “It may be I’m not profitable on this lane when I’m hauling this guy’s freight. The real work is for the customers to take the analytics and take a hard and serious look at where they make money and where they can do the best job.”

MinStar is a McLeod customer.

Jeff Friesel, director of business development for Gordon Trucking, Pacific, Wash., looks closely at freight on Interstate 5 between Seattle and Los Angeles — both southbound and northbound freight on the route is desirable for the truckload carrier — and the type of shipper and freight, which is key for the company, which ranks No. 64 on the TT 100 for-hire list.

“If it is a grocery distribution [customer] and you have to get a service to get the product off the trailer, that is going to slow you down, versus being able to drop the trailer and pick up another one,” Friesel said.

Friesel uses TMW Systems’ Netwise software to review data from region to region, market area to market area and city to city. He also can use Netwise’s market rate index information to see the lane averages that TMW provides.

Netwise also helps fleets find the right balance for their networks and determine a load’s yield, said David McKinney, vice president of professional services at Beachwood, Ohio-based TMW.

“The yield takes into account how the truck got at the origin, how it is going to leave the destination and the margin on the load,” he said. “If you’re an asset-based business, there is more to your profitability than just the margin on any given load.”

Gary Short Jr., vice president of Go-To Transport, Bay City, Mich., uses the software to examine yield and margin.

“You can have a load that is really bad margin but really good yield because there is a good load before and after it. Now we can get a pulse of that,” he said.

Central Freight’s Stein relies on costing software from Transportation Costing Group. Ken Manning, president of TCG, said carriers use the software to create a specific cost for every load or shipment. Carriers can look at individual customers, commodities, day of the week or month of the year to identify patterns.

“They might find the freight they move for a certain manufacturer is pretty profitable during most months, but the last two weeks of each fiscal quarter, their volume ramps up and it overwhelms their capacity and screws up their traffic distribution,” Manning said.

Having this level of detail in hand can give carriers “ah-ha” moments, said Randy Seals, customer advocate for McLeod Software.

“It gives you the profit of any lane, state, customer, tractor or trailer,” he said. “In summary mode, you might say you don’t want to go to Texas, but when you drill down, you might learn you want to go to Houston but not to Dallas.”

Seals likened the reports to a coach’s playbook.

“On Sunday Night Football, you see the coach running back and forth with his playbook. It doesn’t mean he will call [plays from the book], because something may have changed, but he has it there,” Seals said. “Load by load, you have to be able to make decisions that will affect your bottom line.”

The detailed data also can serve as a starting point for carriers renegotiating contracts and open a dialogue. Sales representatives for Central Freight have shared data on costs associated with an account, time spent on deliveries and pickups and weight per shipment.

“It allows shippers to understand what their true costs are to us. There are things the shipper may not be aware of,” Stein said.

For example, through the software, Stein identified numbers that were out of line for a particular shipper. After a little digging, he discovered a local shipping facility “had changed the shipments and increased the less-dense freight, which was only supposed to account for 35% of the shipments,” he said. “We went back to them and explained what was going on, and they fixed it.”

Go-To Transport’s Short shares concrete data with shippers when discussing costs.

“It is no longer just, ‘I am losing money.’ It is nice to have the tools to take back to customers to show how good or bad their velocity really is,” he said.

The software made Short realize the true price of a trailer pool for a shipper.

“We bid on a specific piece of business, and they bid the lane at 20 trailers in the whole loop, but it turned out to be 40 trailers in the loop. What I could do is take the data and say at 20 trailers I make X, at 30 trailers I break even, at 40 trailers I’m upside down and I can’t do it,” Short said.

Short isn’t afraid to walk away from business that isn’t a good fit.

“It brings great clarity to the gray in your network,” he said. “All of a sudden, we’re not so in love with customers we used to be in love with.”

However, it isn’t always about dropping a customer. The software allows carriers to pinpoint what isn’t working so they can identify ways to fix any problems.

Hiccups such as a customer that detains drivers at the consignee desk too long or a certain dispatcher who puts in too many deadhead miles become visible with the software, McLeod’s Seals said.

“If you’re not looking for that type of information, it can hide from you,” he said. “If we can eliminate some of these ineffective movements and decrease the time on the load, you can make a marginal load profitable.”

Short added, “I can see the dwell times of customers, and I can see what customers our drivers sit at. I can take that data back to the customer and say, ‘I love the lane, but I hate the wait time.’ ”

Even if certain loads aren’t as profitable, there are times when Stein has disregarded the numbers to keep a customer happy.

“Maybe 80% of the freight a customer gives you is in your powerhouse alley, but they may have freight going to remote areas that aren’t strong in terms of profit. You may accept that,” he explained. “We can look at the balance of the business to see what we can do to make the whole book of business acceptable to both parties.”

Indeed, for any software program to work, the data keyed into the system have to be accurate.

“If they fat-finger a gate-in or gate-out time, it can make your whole lane look unprofitable, said Short, referring to a term for hitting the wrong key on a computer keyboard. “Everybody has to be on their ‘A’ game in regards to data.”

But so far, said McLeod’s Kubine, only about 100 fleets have signed on to crunch those numbers with his company’s product.

“It is still a relatively small percentage of companies who jump into these analytics, but it is picking up pace,” Kubine said.

The investment paid off for MinStar, Farley said, by uncovering revenue the fleet was missing.

“We saw that our costs were way out of line to our revenue for one lane, so we looked closer and we found $6,500 over a short period of missed stop charges,” she said. “We didn’t notice it until we

ran the lane revenue analysis.”

Software manufacturer Qualcomm Inc. did not respond to requests for comment.

Electric Trucks Reach the Market

Mindy — Tue, 06 Sep 2011 02:35:35 +0000

But Battery-Powered Delivery Vehicles Face Hurdles to Achieving Mainstream Acceptance From Fleets

By Mindy Long, Contributing Writer, Special to E&MU

This story appears in the May/June 2011 issue of Equipment & Maintenance Update, a supplement to the May 16 print edition of Transport Topics. The story is online here.

It appears that the time for electric commercial trucks has arrived. After years of announcements promoting concepts and prototypes, several suppliers have introduced battery-electric production models.

As with other alternative power systems, such as hybrids or natural gas trucks, electric trucks are not the silver bullet that will reduce all of a fleet’s operating costs.

Electric trucks have significant limitations. They cost a lot and have limited operating range, and their power source is a developing technology.

Nevertheless, they may find a home in some fleet and business applications as battery technology evolves and prices fall.

With just a handful of commercial suppliers, the number of available models is low. However, each unit is highly customizable, giving fleets the ability to create vehicles tailored to their operations, industry executives said.

For example, ZeroTruck, Irvine, Calif., starts with the Isuzu N Series chassis, then configures the battery box and body based on a fleet’s payload and range requirements, said Tedd Abramson, president and chief marketing officer.

Smith Electric Vehicles, Kansas City, Mo., manufacturer of the Smith Newton battery-electric truck, offers several different sizes and payloads. “We sell a cabin

chassis, and it can be used on vehicles with boom trucks, shuttle buses or a 24-foot van body,” said Bryan Han-sel, Smith’s CEO.

Freightliner Custom Chassis Corp., Gaff-ney, S.C., and Mor-gan Olson, Sturgis, Mich., have partnered to produce the all-electric MT-EV walk-in van, which will be available later this year.

Ford Motor Co. began production of the Transit Connect Electric truck late last year.

The company plans to follow with the Focus Electric, a plug-in hybrid electric vehicle, in 2011 and next-generation hybrid technology in 2012.

As part of the Navistar-Modec EV Alliance, Navistar International, Warrenville, Ill., began selling the eStar, a Class 2c-3 all-electric truck, in May 2010. In March, U.K.-based Modec entered into administration, which is similar to bankruptcy in the United States.

Navistar spokesman Steve Schrier said he didn’t expect the filing to affect the al-liance’s operations. “NMEVA is a separate legal entity, for which we are a majority owner and have access to the IP and technology we need for competing in North America,” Schrier said.

Some companies also provide the components, allowing fleets to pick and choose the manufacturers they want.

Motiv Power Systems Inc., Foster City, Calif., provides electric drive power control systems that can be used in many applications. “Fleets could still use the chassis and the platform they’re using, but instead of a diesel drive, it would be electric,” said Jim Castelaz, Motiv’s CEO.

Developing a power source with more energy and storage capacity at a lower cost is the holy grail of electric vehicle development and research. Over the past years, companies have committed to investing hundreds of millions of dollars into this quest.

The battery itself can represent up to 40% of an electric truck’s total cost, depending on the size of the truck and its power needs, several manufacturers said. That relative cost can rise to as much as 50% to 70% when it includes the components needed to support the power system, such as the high-voltage wiring, temperature controls and charge management components, said Kris Hus, product manager of commercial chassis with Freightliner Custom Chassis Corp.

Various types of lithium-ion batteries will continue to be the power of choice in electric trucks for several years, Peter Harrop, chairman of IDTechEx, said in an e-mail.

However, Harrop said he expected that solid-state batteries of one sort or another will begin to be used in manned on-road vehicles in about five to 10 years. IDTechEx is a research analysis firm based in Cambridge, Mass.

Fortunately, industry experts said, prices of electric trucks are expected to decrease with time. “We’ve seen the cost of batteries per kilowatt-hour drop significantly over the past two to three years,” said Genevieve Cullen, vice president of the Electric Drive Transportation Association.

While electric vehicles hold a long-term pro-mise of fuel savings and less maintenance, they require a significant upfront cost.

Incentives in the form of tax credits or rebates could help, but there are no federal incentives currently for battery-electric, plug-in hybrid or hybrid vehicles heavier than 14,000 pounds, Cullen said.

In February, Sen. Debbie Stabenow (D-Mich.) introduced the Charging America Forward Act, which would provide up to $7,500 in rebates for plug-in electric vehicles and give businesses a tax credit for purchasing medium- or heavy-duty plug-in hybrid trucks.

At the state level, incentives vary by which state is involved, vehicle size and other criteria.

Smith Electric’s Hansel said fleets will choose to place vehicles where they can get incentives. Smith Newton electric vehicles start between $85,000 and $90,000, but their diesel equivalent averages $65,000. However, in California, buyers can receive a $20,000 voucher for Smith vehicles, and in Oregon, they can take advantage of a tax credit for 35% of the price differential, Hansel said.

Mike O’Connell, national director of fleet capability for Frito-Lay North America, Plano, Texas, acknowledged that incentives are critical in the short term but said Frito-Lay will invest in the technology, even without them. “I now have to buy multiple fluids — diesel and diesel exhaust fluid. It is becoming more and more feasible to do this without grants,” O’Connell said.

Mindy Long is a freelance writer based in Annandale, Va.

A Kid Favorite: Tails

Mindy — Thu, 26 May 2011 02:47:34 +0000

Both of my kids love Tails by Matthew Van Fleet. Evan has been a fan of the book since he turned one and now Madelyn is following in his footsteps. She loves the hands-on textures and gets so excited when she gets the book all to herself. That, of course, only happens when Evan is at school.

They both love it so much that I’m thinking of buying a second copy!

A Favorite Quote: Erma Bombeck

Mindy — Wed, 25 May 2011 01:16:46 +0000

If I had my life to live over, I would have talked less and listened more. I would have invited friends over to dinner even if the carpet was stained and the sofa faded. I would have eaten the popcorn in the ‘good’ living room and worried much less about the dirt when someone wanted to light a fire in the fireplace. I would have taken the time to listen to my grandfather ramble about his youth. I would never have insisted the car windows be rolled up on a summer day because my hair had just been teased and sprayed. I would have burned the pink candle sculpted like a rose before it melted in storage. I would have sat on the lawn with my children and not worried about grass stains. I would have cried and laughed less while watching television – and more while watching life. I would have shared more of the responsibility carried by my husband. I would have gone to bed when I was sick instead of pretending the earth would go into a holding pattern if I weren’t there for the day. I would never have bought anything just because it was practical, wouldn’t show soil or was guaranteed to last a lifetime. Instead of wishing away nine months of pregnancy, I’d have cherished every moment and realized that the wonderment growing inside me was the only chance in life to assist God in a miracle. When my kids kissed me impetuously, I would never have said, "Later. Now go get washed up for dinner." There would have been more "I love you’s".. More "I’m sorrys" … But mostly, given another shot at life, I would seize every minute… look at it and really see it … live it…and never give it back. – Erma Bombeck

Waving Goodbye to Daddy

Mindy — Mon, 23 May 2011 11:34:14 +0000

If you’re in my living room at 8:00 a.m. on a weekday, this is the view that you’ll see.

These two little ones stand at the door, waving and watching intently until their daddy’s car is out of view. Evan usually calls Bryan back two or three times. "Daddy, I just have one more thing to tell you," he says. Then he quickly makes something up. "The trees have leaves," he’ll say with a grin. "Wait, now I have something to give you." Then he wraps his arms around his dad’s legs, which sometimes gets peanut butter on Bryan’s pants. It all depends on whether or not Evan has had breakfast yet. The whole routine usually delays Bryan by at least ten minutes, but it is pretty cute to watch. It also makes me grateful that instead of commuting in D.C. traffic, I spend the next hour getting the kids dressed, packing Evan’s lunch and taking a five-minute drive to the church where Evan goes to preschool. It sure beats sitting in traffic. Being able to ditch my morning drive time is definitely one of the top five reasons I love working from home.

Take Me Out to the Ballgame

Mindy — Mon, 16 May 2011 20:55:05 +0000

We spent a perfect afternoon taking in a Washington Nationals baseball game yesterday. I think I watched approximately five minutes of the game. I spent the rest of the time watching my kiddos and thinking about how lucky I am. It’s true. Even on my worst day, I could take a look at these photos and know that life is good.

P.S. The Nationals won!

A Favorite Blog

Mindy — Thu, 12 May 2011 20:14:33 +0000

Do you read the Nie Nie Dialogues—a blog by Stephanie Nielson? I’m a fan. In case you don’t follow Stephanie, she is a mom, a blogger and a burn survivor. I find her totally inspiring. It could be because my nephew is a burn survivor. I witnessed with lots of love and tears the ups and downs that take place in the burn unit. When I first started reading Nie Nie, all I could think about was my own family’s reaction to those first tragic days and months after my nephew’s accident. Nothing can prepare you for such a life-changing event.

I think the thing I like most about Nie Nie’s blog is that she reminds me of the simple joys we should savor in life. She literally fought for her life so she could hug her little ones and be there to make them lunch in the morning. It puts things in perspective for me. I take for granted how easy it is to give my kiddos a bath or cart them around for a piggyback ride. Check out Stephanie talking about caring for her kids on Oprah.

Tomorrow night 20/20 is doing a story on Stephanie. Are you planning to watch? I will be. I’ll be thinking of my nephew and what it was like to sleep on a cot in the burn unit by his side. I’ll be thinking of my kids and how happy I am I get to mother them every day, and I’m sure I’ll be crying.

Booking Up Summer

Mindy — Tue, 10 May 2011 15:01:23 +0000

I am in the process of filling up the days of our summer calendar—camps, vacation to visit the grandparents, swimming lessons, and on and on. But it occurred to me that I am forgetting to schedule some of the most important things on my summer’s to-do list. Before I forget, here they are:

–Catch fireflies

–Sleep outside

–Stargaze

–Roast marshmallows

–Plant flowers with Evan

–Make fresh lemonade

–Pick strawberries

–Have a water balloon fight

–Eat popcicles on the front porch

–Make homemade ice cream

–Find a drive-in movie theater (sans kids)

–Go for a hike

–Bird watch

–People watch

–Relax

How about you? What is on your to-do list?

The Magic of Disney

Mindy — Tue, 26 Apr 2011 15:47:11 +0000

“All your dreams can come true if you have the courage to pursue them.” – Walt Disney

I am still reeling from the excitement of our Disney trip earlier this month. I love Disney and find the entire experience of stepping into a Disney theme park completely inspiring. It is a hustling and bustling testament to what one can achieve by chasing his or her dreams. Walt Disney trusted his instinct and invested himself in the projects he believed in. An impressive empire has grown out of Mr. Disney’s imagination.

I love his quote, “If you can dream it, you can do it.” I left Magic Kingdom thinking about my own dreams and the steps I need to take to achieve them. I also love being inspired, and Disney served that purpose for me this month. How about you? Where do you find your inspiration?

A Fresh Start

Mindy — Mon, 25 Apr 2011 17:17:37 +0000

Happy Monday! I am excited to start a new week. Even though I’m sleep deprived and still sorting through how I am going to conquer my to-do list this week, I am looking forward to what Spring has to offer. Easter always marks a time of new beginnings and I am feeling completely inspired in my writing life as of late. I have several exciting work projects on the horizon and three features just waiting in the queue to be published. Hooray!

During my inadvertent blog-cation, I crafted up several post ideas in my head, survived (and enjoyed) a family trip to Disney World (pictured above), and I put the finishing touches on those features that are going to be published in the coming weeks.

I hope your Easter was as fun-filled as ours was and that you’re settling back into a routine. It’s always nice, isn’t it?