Managing private or dedicated fleets using modern transportation software poses an entirely different set of challenges to transportation and logistics practitioners than managing either common carrier shipping or fleet management using the available software tools dedicated to each of these strategies. Contemporary TMS software is well-suited to managing common carriers and fleet management tools are designed to address the needs of private fleets. But there are few solutions commercially available that are adept at managing both. As the growth in utilization of private/dedicated fleets continues, this is a challenge that is sure to grow in significance.
According to recent research from ACT Research, an analyst firm specializing in tracking fleet size and distribution, 38.6% of the overall $563 billion trucking industry is comprised of private fleets. That means $217 billion a year is dedicated to maintenance and utilization of private fleets among all shipping organizations in the United States. The National Private Trucking Council (NPTC) in a recent report to members revealed the top three reasons its membership gave for using private fleets as opposed to relying on common carriers for shipping. They were:
1) To hedge against capacity crunch especially within an increasingly regulated environment (think recent hours of service rules changes for example)
2) To capitalize on backhaul opportunities for a reduction in empty miles
3) To provide better customer service amid tightening delivery date requirements
With the so called “capacity crunch” always a concern and with trend watchers predicting a shortfall of perhaps as many as 130,000 additional trucks to handle freight demand in the second half of 2013, shippers are – now more than ever – realizing the advantages of maintaining some level of dedicated or private capacity in their transportation planning.
But for all the benefits promised by the use of dedicated/private fleets, it bears considering how shipping organizations intend to manage these resources in an efficient and cost effective manner. TMS tools are great for providing visibility and control over common carrier tendering and management. But most don’t provide robust functionality for addressing the concerns more relevant to fleet management such as vehicle tracking, dispatching, driver payroll, backhaul management or driver/equipment history and management. Fleet management tools handle those items well, but aren’t concerned with common carrier-centric concerns like tendering, rate/carrier management, spot quotes and settlement with carriers.
All this leaves shippers with a series of imperfect choices. They can choose one solution – a TMS or a fleet management tool – and engage in manual work-arounds to fill the gaps. Or they employ both solutions and are still faced with the need for manual intervention to move relevant data between two unrelated systems. Neither of those options delivers on the promise of efficiency improvements inherent in either implementation.
Are you faced with this quandary in your organization? How are you bridging this gap between the use of common carriers and private/dedicated fleets? Let us know what you’re doing and how it’s working.