While the language raising weight limits in the SETA bill was removed by a 33-22 vote, DOT’s funding award is a proactive step towards determining the validity of each group’s arguments and laying the groundwork towards raising weight limits in the future.

Why is Raising Weight Limits a Big Deal?

As you already know, the amount of freight shipped throughout the U.S. continues to increase each year, spurred by population growth and the associated needs.  However, as the nation recovers from The Great Recession, the amount of freight shipped will increase at a significantly accelerated rate in the next 10-15 years, almost doubling what it was in 2000.  I do not need to mention the
obvious fact that road capacity is not increasing at the same rate.

This is very important for a number of reasons:

• While rail is often the first choice for transport, it is limited across the U.S. by the number of railway lines and their limited geographic reach within individual states – you simply cannot get freight everywhere by rail.
• To deliver the freight, current interstate weight limits force trucks to travel on rural state roads and pass schools and neighborhoods, jeopardizing safety in those areas.  Raising weight limits would put these trucks on divided interstate highways where they can safely transport goods.
• The highest weight limit currently allowed in most states is up to 85,500 pounds on five axle trucks on state roads, which take longer to stop than the 97,000 pound six axle trucks that are being proposed – this has safety implications that directly impact state law enforcement.
• These same six axle trucks get better gas mileage carrying 97,000 pounds than what is currently on our nation’s interstates; in some studies up to 17 percent more ton-miles per gallon.  This translates to a decrease in fuel consumption and a reduction of the greenhouse emissions being deposited.
• Raising weight limits would actually improve state highway infrastructure as fewer trucks would be necessary to satisfy the shipping needs.   This would put less overall weight on any given stretch of interstate highway, while directing higher usage fees toward local bridge repair and maintenance.
• Current weight limits control the amount of payload that can be carried in a truck.  An increase in vehicle weight limits would increase the allowable weight per trip.  Freight transportation cost savings would benefit the shippers, carriers and end consumers.

It is important to note that raising weight limits will affect only the movement of heavier goods – which represents approximately 25 percent of freight that is currently being shipped.

While the details of the DOT study remain unclear, it is apparent that its purpose is to “determine if there are any associations between higher vehicle weights and motor carrier safety violations.” This will definitely be something to watch throughout the rest of the year and in 2013. It’s refreshing to see our politicians taking a proactive step in addressing our nation’s infrastructure needs. This study can only further prove the importance and benefit of raising weight limits across the country.

When we were first approached about the cloud, I saw it as a solution to many of the problems we were plagued with at the time.  The cloud was where we were going to move all of our IT systems that would allow us speed, redundancy, access and a predictive cost model.  We would never run out of capacity, because this is the cloud!  This was going to be a little slice of Heaven on Earth!

At the time, our IT infrastructure was plagued with many individual issues needing attention and a resolution. The issues were becoming very complex and required a team approach to resolve, but that was aggravated by a lack of adequate cross-training within the infrastructure department. Because our business is so complex, our servers were beginning to show signs of strain, so we created complex 100+ server farms. This resulted in aging equipment and difficult maintenance renewal cycles (think about systems hitting EOL but still functioning, should they be replaced?). In addition, speed of the server farm system could decline as user counts rise. We were also concerned with the potential for many single points of failure in both the methods of communication between the network and end-user, but also between the servers themselves.  Finally, disaster recovery programs were no longer truly viable because the sheer amount of data to be restored could take more time than what is available, ultimately shutting down business.

There are many items to be taken into consideration when running our IT Department on a yearly/monthly/daily or even hourly basis.  The cloud was going to address them all.

Wrong.

To me, cloud computing is defined as anything that involves delivering hosted services over the internet. What makes the cloud different from server farms?

• All you need is a computer with an internet connection to access anything stored on the cloud
• You only pay for as much capacity as you need or use – which allows for a predictive cost model that can be easily understood
• The service is fully managed by the provider rather than in-house IT
• It has the ability to expand or contract on an “as needed” basis

Just as with any new innovation, there are advantages and disadvantages to using the cloud.

When deciding whether to implement cloud computing into your technology infrastructure the question becomes not “What can you move to the cloud?”, but “What should you move to the cloud?” Certain programs or information may be too proprietary or confidential to risk cloud access. There are rules and regulations you must take into account if you are a public firm that may dictate what you can or can not allow others to manage for you.  Then you need to ask yourself what percentage of your data is considered proprietary.

We decided to use the cloud where it makes sense and to focus our efforts internally on those applications that we feel make us unique.

First, we determined where our IT programs’ were a commodity. These are programs that can easily be managed by others. They include typical business-related programs such as Exchange and Great Plains. We then looked for other simple programs that are necessary to our business, but do not hold valuable information that could easily make the move. In addition, our business uses programs that need to be accessed and modified by multiple users in varying locations. In addition, the cloud makes it easier for multiple users to access account and document management applications. Examples of such programs that can transition to the cloud include: sales and shipment tracking.

However, programs that are proprietary in nature or core to our business will remain on our secure servers rather than the cloud. Any program that houses confidential information will not make the jump. While determining which programs to house internally versus the cloud, it was also important to keep cost in mind. As you add more programs and data to the cloud, you will need more bandwidth and capacity, which can dramatically increase cost as programs become more complex. In my opinion, the cloud is best used for simple, every-day business programs rather than complex programs that make up your companies infrastructure.

So, should you make the jump to the cloud? Depending on your IT needs and costs, the cloud might be ideal for your business. However, you must keep in mind that not all programs are meant for the cloud. The purpose of implementing this new technology should always reflect improving efficiencies while minimizing costs. Most importantly, it should enable you to focus greater time, money and attention on your core business goals. It’s up to you to evaluate whether implementing a cloud-based system will enhance your business procedures, or whether your programs are too costly or proprietary to make the move.  But, if you are willing to do the legwork, a hybrid of cloud and internal may be the next important step on your journey.

Mobile Application Customization

Having already pinpointed your audiences as brokers, carriers, and end customers, all focus on marketing and development costs should revolve around their needs first, and then wants second. This will enable you to determine how to structure the cost. Since each of the constituents is a client in some form or fashion, having them pay for an additional service could potentially turn them off from taking advantage of the new service. Instead of having your audiences pay for the application up front, give them a basic version of the application as part of the services rendered and build upon the application to meet their individual needs.

As you continue to develop new components of the application, such as a message or alert service, have your audiences pay a small fee if they want to include such upgrades. This way, you can build a simple application that meets everyone’s needs, and then build separate components tailored specifically to one or two audiences, enhancing the usability for their in-depth needs. This shows your commitment to identifying the customized solutions for your constituents, while also providing a simple method of generating income.

Marketing the Mobile Application

To fully penetrate your market and generate ROI, it is important to develop targeted messages to each audience in varying mediums. You know how your clients and carriers prefer to be contacted. Send them direct communications in their preferred medium with background on the benefits of the application and instructions on the various components. Encourage feedback as they download the application. This way you can further enhance the product and resolve any technical issues that arise while positively reinforcing your clients and building their impression of the value you place on their input.

While rolling out the application, consider including the power of social media in your communication mix. Updating all social media channels will not only inform your main constituents, it will also reach secondary audiences, such as unaffiliated carriers and potential clients. The goal of using social media is to create conversations around your application and your company, increase traffic to your website, and generate more business opportunities. In doing so, your target audiences will be more inclined to research your business and keep you in mind for their future needs.

In addition, have a process in place for updating all company collateral to include messaging around your mobile application. This includes dispatch forms, check inserts, brochures, websites, and presentations, anything that addresses the public or your clientele and business partners. It’s important to complete all updates before the product goes to market.

Mobile Application ROI

Just as providing upgrades and add-ons to the application will be a continuous process, so will the measurement of ROI. Once releasing the application to your market and implementing your marketing plan, you will need to track and measure several variables. First measure the number of people downloading the basic version of the application. Then, as upgrades become available, track the people paying for those add-ons. Establish a baseline for measurement when it comes to business leads and website traffic. For example, you should have a current average of how many business leads you get in a month. After implementing the application, compare the number of new leads to your current average to establish growth. The same goes for website traffic.

As you receive feedback on the application, quantify it into positive and negative sentiments. In the feedback processes, encourage the users to discuss whether the application facilitates business efficiency and how it affects their overhead. Quantify those responses as well, for those numbers will not only give you a greater picture of your ROI, but also theirs. They will also provide better information on refining the upgrades.

ROI for developing mobile applications goes well beyond simply generating revenue. A successful application will show positive results in developing business leads and obtaining greater process efficiencies. Your application should provide you and your clients a significant tool in growing your business while at the same time, saving money.

When transportation companies consider building mobile applications, they need to answer two questions before investing their time and resources into this new technology. The first question is two-fold: what audience do you build the application for and what do you build? Three distinct audiences benefit from mobile applications: carriers, end customers and agents or freight brokers. However, each audience requires different tools to run their business.

Mobile Applications: Audience Requirements

For example, carriers need to know what shipments are available for their drivers to pick up. However, agents need status updates on their business at any given time. At the same time, the end customer wants a good tracking system in their palm to see the transit status of their merchandise.

With the differing needs of the three audiences, many would consider building a separate application for each audience. The problem with this lies in the cost of developing so many applications. As you’ll see below, building a separate application for each audience increases the cost exponentially. That is why it is much easier to find a common operational issue among all three audiences, such as booking loads and developing one application that works for each.

Consider the technology as a means of communication between the audiences for booking loads. Both agents and carriers would be interested in an application that finds a carrier/driver needing to book a load and a broker with merchandise available for shipment. However, the end customer would only care about booking their loads. They could use the application to view a real-time snapshot of their loads booked and waiting for shipment.

Cost of Building Mobile Applications

The second question to answer when developing a mobile application is whether to build it in-house or contract it out. This largely depends on the size of the company which dictates their available funds and talent resources. Small brokers and carriers are unlikely to have the money and resources to develop a mobile application and are more likely to contract out. However, large logistics companies, 3PLs and carriers might have more budget to allocate to in-house development and more authority to control costs.

The largest part of cost analysis is determining whether you have the talent to develop the application. There are four platforms for mobile applications: the iPhone, iPad, Android and Windows. Each platform has its own set of complexities and requires different coding, resulting in one application becoming four. You can choose to only build an app for one or two platforms to cut down the cost, but that could potentially cut down the number of end users able to access it. Or, you can build a mobile web page that would function on all platforms.

When considering whether to build in-house or contract development out, determine whether you have the talent to build the kind of application that you want. You probably have at least a one or two people who know enough coding to build a mobile web page or build an application for one of the platforms. If this is the case and you have the budget for in-house development, then that might be the best option.

On the other hand, if you want a well-designed application for all four platforms and you don’t have the in-house talent, it might be better to take advantage of the reduced cost of contracting the work out.

As we did at my company, surveying your user to determine their needs is the most important aspect of mobile application development.   Audience and functionality will largely determine cost, along with talent and platform development. Once you’ve developed your application it’s time to start making a return on your investment, which I will discuss in my next post.

To successfully integrate a new TMS, it is important to establish a project plan that includes all stakeholders, and involve all affected parties in training and communication from the moment the software is installed. While this is sometimes a tedious process, it is essential for an effective TMS transition.

TMS Implementation

Depending on the size and scope of your TMS platform, several aspects need significant consideration when developing an implementation plan. First, end-users will require training on the software. This will include all employees and any agents or carriers that use the program on a daily basis. It is also important to establish business rules regarding use, including who has rights to what information, workflow rules and developing security levels. Also, consider developing best-practices when implementing the TMS.

The hardest part of implementing new technology is change management. In your plan, include processes for converting all documentation such as contracts, bills, receipts and contact information to the TMS. This also dovetails back to training with regards to affecting behavior change with the end-users. After the conversion is complete, but before launch, employees need to test the software to ensure it provides the expected benefits and to fine-tune technical issues.

Once all employees and carriers are trained on the software, send out notifications to everyone affected by the change, which includes agents in the case of a 3PL, and the end client. Apprise them on the new software, the enhancements that ultimately impact their business, and how the technology provides a better resource for their transportation needs.

Marketing efforts also need updates to reflect the enhanced service offerings provided by the new TMS. Create a fact sheet and frequently asked questions to help employees explain the new services to their clients in a consistent manner, as well as to use as a reference for personal questions when working with the software.

The major purpose of investing in a TMS is to enhance efficiencies and increase profit for both you and your customers. When developing your implementation plan, keep ROI top of mind. Set goals and dates by which you expect results. Create the plan to surround your goals. No matter the level of sophistication, your TMS should increase operational and dispatch efficiency, streamline processes, measure and improve internal and external costs, and automate manual processes while eliminating errors. Good execution plans include evaluation on how the technology meets those business goals.

Communication drives the entire process of executing a TMS. Training, marketing, informing constituents, and affecting change all depend on effective communication. Establishing rules, best practices and measuring ROI are contingent on all parties fully understanding the technology and its expected benefits. When mapping out this process, include communication strategies for not only giving out information, but also receiving feedback. Communication combined with an effective plan will ensure that the transition process is not only smooth, but also successful.

Ask yourself the question, “Are my IT capabilities robust enough to handle this extensive new system?” Most companies will answer “no.” With that being the case, it is very important to understand the system requirements for a TMS and whether the cost of incorporating new requirements is within reach.

IT TMS Requirements

Your first step should be to consult with your IT department and develop their requirements for a TMS to ensure that you select one that they can support. The IT department needs to prepare estimates on hardware requirements for the various systems that interest you as well as estimated power requirements. Understanding how those requirements will interact with your current power supplier and generator will also help avoid possible power outages.

Moreover, IT needs to plan and implement required disaster recovery process updates before installation of the new system. One trap many departments fall into after long hours of planning is failing to test the plan. Once the software is installed, the IT department should block out times to make the system inaccessible for testing. They also need to consider how often to make back-ups and how to recover data lost before a back-up takes place.

As with any sophisticated program, training is essential for both the IT team and the end users. Make sure an IT person is present during TMS consideration, bidding and system installation. It is important for IT to know everything from support to programming. Assign at least one person for training on every aspect of the technology to help users with all difficulties. Subsequently, assign one IT person per department to help troubleshoot any issues.

On the other side, make sure the interface is easy to work with for end-users. When determining the right TMS for your business, consider how to deliver training to the appropriate audiences. Ask yourself the following questions:

• Are online courses available?
• How good is the help system contained in the software?
• Will the responsibility to provide the training fall on my company of the software providers?
• Will training need to be conducted face-to-face?

After determining your IT department’s requirements and capabilities, limit selections to the transportation management systems that work with your technology platform. If you have enough capital to upgrade your entire IT platform, then evaluate the most sophisticated TMS for your needs. However, few businesses can afford such systems and instead sift through their needs to decide what operations are most important for integration and have the best usability for your customers.

TMS Accounting Functions

At the beginning of the evaluation process, determine which manual steps can be accomplished electronically. For example, an exceptional TMS can automate the entire payables function, saving time and money for smaller firms who manually receive invoices and cut checks. A system that auto-generates commission reports, calculates commissions, and produces checks provides an efficient way to conduct business.

While many TMS programs have built-in accounting functions, most companies choose to integrate it with their existing accounting procedures. So, when selecting a TMS, keep in mind the ability of integrating it with your current accounting package and whether the TMS you are considering has experience integrating with your accounting package.

Accounts Receivable personnel must be able to invoice customers through a variety of means including Electronic Data Interchange (EDI), paper invoicing, consolidated invoicing and email invoicing. I have found that a good TMS will support all modes of communication with regards to invoicing and successfully integrate with accounting programs to provide all required documents, such as Proof of Delivery.

Also, the ability for the TMS to retain required documents from carriers is very important as it directly impacts the function of generating bills. Look for a TMS that allows users to enter documentation into the system in multiple ways, such as scanning, faxing and emailing. For example, 3PLs work with carriers with varying means of documentation. Some carriers have the ability to complete all documentation online and want to work with a 3PL that accepts their documents electronically. Other carriers may still mail in their documentation, requiring the scanning of documents into the TMS.

On the accounts receivable side, it is important to show payments received to ensure the aging is accurate. An accurate aging allows for the accounts receivable personnel to focus their efforts on the exceptions, instead of the whole pie. Make sure your TMS will include this function, allowing the accounting department to quickly find and address outstanding bills.

TMS at the Back-End

Another back-end function to keep in mind when evaluating a TMS is claims management. By having your TMS track claims, all your information will be stored in one place, allowing personnel to more easily administer claims while determining and correcting freight and carrier problems.

The ability to monitor or track carrier compliance by approval requirements is an additional advantage. With a comprehensive TMS, approval requirements can easily be established to ensure that both trucks and brokered shipments are in compliance. If additional tracking is needed, you can arrange for outside vendors to help ensure that all carriers meet your requirements with this function.

In addition, your TMS should have the ability to attach documents to a record in your database, allowing you to add contracts to a customer or carrier. The ability for a TMS to track and record documentation will save time and effort, which will result in more accurate accounting for the company and all its constituents.

The ability to quickly sift through available documentation to determine if a dispatcher is profitable, or if an account is generating revenue according to your goals, will be invaluable to your business.  A good TMS will allow for this without having to go through a lot of steps to make that determination.

As logistics and transportation companies continue to invest in transportation management systems, it is highly important to not only understand how they can benefit your direct operations in scheduling loads, but also analyze their ability to streamline your back-end operations in accounting, compliance, claims and record maintenance. By making these functions as automated as possible, firms can reduce their overhead and employment costs without sacrificing quality by using a more efficient system.

Operations Needs

When choosing a TMS, it is essential that you base your decision on your preferred methods of transportation.  All methods of transportation require some of the same information such as shipper, consignee and bill to parties. However, each mode of transportation also requires unique information specific to that method.

For example, many 3PLs offer multiple modes of transportation, so they must focus on acquiring a TMS that easily moves freight in all of the modes they currently utilize. Each mode requires different data elements that 3PLs need to track and pass on to all parties for a successful engagement.

4PLs have the ability to operate as a conventional 3PL, but often offer enhanced services along with the services offered by the 3PL.  Functions such as reverse logistics, order optimization, bid and capacity procurement and information dissemination are some of the additional offerings a 4PL should take into consideration when making their purchase decision.

As stated above, perhaps the largest area to gain ROI is in your operations.  Before engaging in a search for your TMS, sit down with your current operations staff and document their requirements.  Look for processes where efforts are duplicated on a daily basis and where, if these processes were electronic, the operations staff could utilize their time on other tasks that require manual intervention.

When deciding on a TMS, it is also important to understand which of your current services need optimization for efficiency and productivity.  If your customer plans and schedules their shipments, consider a TMS with an easy-to-use end-customer experience that connects you with your customer. Consider the ability to interact with all your constituents as a base line of a good TMS.

It is also important to consider making Electronic Data Interchange (EDI) an integral part of the communication efforts based on the methods by which your constituents communicate with you and ensure that the system supports those capabilities.  These benefits enable them to easily post their scheduled shipments and you to easily source their shipping needs.

Address your communications down to the lowest level of sophistication, such as a driver making a phone call from the truck stop regarding arrival time. By allowing for this low level of sophistication up to the highest levels, it is possible to increase productivity and efficiency for your brokers and your customers. Furthermore, computerizing your overall communications efforts allows the operators more time to deal with exceptions.

Also, consider the level of interaction your operations requires and your business goals surrounding order processing. For 3PLs/4PLs, the ability to quickly enter orders either electronically or manually is critical. Increased speed in order processing gives the company more time to perform more proactive tasks.

Lastly, when it comes to carrier selection and management through a TMS, it is necessary to determine the criteria needed to approve or decline a carrier. Look for a system that can track the insurance requirements your contract places on the carriers.  Tracking government data such as the status of a carrier’s authority or their current safety rating or CSA BASICs scores are other critical data that must have a home in any good TMS.  Then look for a system that allows you to enter your own rules for carrier selection as well as store data such as rates and FSC tables. Also, make sure the system can assist you in picking carriers for shipments based on criteria and data point constraints the end customers may place on the 3PL/4PL.

Every day, your operations employee covering the loads fights the battle of finding low-cost, efficient transportation alternatives and capacity for their clients. Understanding their operations needs along with your future business and sales objectives is critical when making a decision to invest in a TMS.

While this is very important, the data points provided by the government for the shipping industry to use leave quite a bit to be desired. The FMCSA’s own website has a notation on it in the Safety Measurement System page that reads:

“Readers should not draw conclusions about a carrier’s overall safety condition simply based on the data displayed in this system.”

If this is the BASIC, then why display it all?  If a reader is not to draw any conclusions from the data, simply making the data available causes confusion.

Further compounding the issue is a lack of direction on how the data points are to be interpreted.  I am not going to spend much time here talking about the government’s lack of direction or interpretation which is one of the scoring system’s biggest problems. However, I will say that because these scores are so difficult to interpret and so variable, it leaves the shipping public in doubt as to their selection of carriers. The problem here is that any shipper who uses a carrier with a BASIC in alert status could be drawn into a lawsuit for negligent entrustment.

The Seven BASICs

For the moment, I want to focus on the BASICs scores and the governmental alert levels and how it affects the shortage in truck capacity. For reference purposes, here are the 7 BASICs on which the FMCSA is attempting to provide scores:

For the sake of this discussion, let’s assume we have 11 carriers in a specific size category (peer) group, and the alert level for the BASIC being measured is 70%.  To determine a carriers’ rating on any specific BASIC, they are compared to how well they address the need of that BASIC relative to their peer group.  The score given represents the percentage of carriers who perform that specific BASIC better than the  carrier whose score is being evaluated.  With that in mind, Carrier A does better than every other carrier in its peer group, therefore it earns a score of 0%. Carrier B is second-best out of the 11 as only one carrier performed better than them, so they earn a score of 9%. And so on until you get to carrier K, who came in last with all the other ten carriers performing better than them, so they receive 91%.

Because any carrier whose score is 70% or above will be subject to governmental intervention in an effort to improve their score, the fitness of carriers I –K could be called into question. This will motivate shippers to refuse to do business with them. What happens to Carriers I, J and K when no one uses them to haul freight?  They cease to exist and the peer group shrinks to 8 carriers.  The transportation industry is already experiencing severe shortage in truck capacity. With BASICs in place, that capacity will only continue to shrink. As this peer group shrinks more carriers will be forced out of business until only three carriers remain. See chart for example.

While getting carriers off the road who have demonstrated behavior patterns that are dangerous to the public was one of the original goals of CSA 2010, and in my opinion the most important aspect of the system, using a peer group review basis for determining the score on any BASIC is going to leave the shipping public without a clear path.  The lack of a clear and constant score for each carrier leaves too much to interpret by the shipping public.

Paul Stewart, Of Counsel, Jackson Shields Yeiser and Holt, LLC, and an industry friend, is working with members of Congress to get this information removed.  In an email sent to many people in our transportation industry, Paul urges everyone to support this effort:

One of our efforts at ASECTT will be to approach all House and Senate leaders of oversight responsibility for the FMCSA for the initial limited purpose of eliminating that portion of the SMS website (BASICS) which so inaccurately depicts more than the majority of registered carriers, and almost all smaller carriers.

We urge you to review ASECTT’s website (ASECTT.blogspot.com) and to join with us. If you are a broker or shipper, we ask that you endorse a letter which we will send to Congress asking it to direct the Agency to take down publication of SMS Data.  If you agree with this objective, please fill out the attached link and support this worthy cause. http://bit.ly/s8ginb

For the reasons Paul mentions, and the simple Basics of BASIC I have outlined above, I also urge you to support this effort to get this useless information removed.  You can follow the link above and join the effort.

Since TTS’ inception in January of 2006, its core value has been to be the best agent-centric organization in the industry.  “It is because of our commitment to the support of our agents that we are reaching one million shipments so quickly,” said President and CEO, Andy Cole.

While other 3PLs were cutting back during the recession, TTS continued to invest in tools and support for their agent network. As they enhanced their services for their current agents, TTS achieved an agent retention rate that is much higher than most of its competitors. In addition, TTS set aggressive agent recruitment goals in order to expand across the U.S. and internationally, all of which they have achieved. Their strong approach to agent retention and recruitment enabled TTS to reach this breakthrough in shipment volume rapidly.

TTS Approaching One Millionth Shipment

TTS anticipates hitting its millionth shipment sometime in the next thirty days. Reaching this milestone within six years is significant for TTS. Not many 3PLs can boast such a rapid growth in shipment volume in such a short time.

TTS provides the best customized services in the industry to their agent network, which enables them to provide full transportation and logistics support to their clients.  Currently, TTS has 62 agents’ nationwide working with clients in every step of the supply chain and transportation process.

“Our sole focus is to provide world class support to our agents and their customers by providing them best in class technology, support services and a strong carrier base.  This allows them to do what they do best- provide great service to the customer, ”said Cole.

With the continued dedication to enhancing their agents’ business, TTS’s aim is to reach two million shipments even more quickly.