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The electronic logging device (ELD) mandate in December 2017 upended the freight markets by the capacity of its crunch. The new milestone, which begins in December 2019, expands regulation in two dramatic ways and it may end up being just as disruptive.

Switch from AOBRD’s

The Automatic On-Board Recording Devices (AOBRDs) will no longer be deployed by the drivers since the new ELD requirement becomes more stringent. Fleets will no longer be allowed to deploy the AOBRDs that were implemented for the first two years of the ELD mandate.

Carriers with AOBRDs were once considered compliant, but come December 2019, they will need to switch. The biggest difference is that devices that are “intrinsically integrated” must be included by the ELDs into the truck’s operating system.

Cell phone apps that did not plug in are soon going to become non-compliant, including many of the legacy systems from companies we all think of as the dominant players in the industry.

It is estimated that more than 50% of the 3.5+ million Class 8 trucks now in commercial use will be required to replace or significantly upgrade the ELD system they are currently using. Driver behavior and fleet operation could be under some major changes due to the new ELD mandate.

Every truck in commercial use is included

Every truck in commercial use, not just Class 8 semi-trailers, has always been included by the ELD mandate. Class 3 through Class 7 are also covered, including FedEx, UPS, and Amazon delivery trucks. Also, local utility and plumbing contractor’s trucks are included in the equation.

According to the current mandate, if a delivery driver maintains an electronic log, it is almost always on a cell phone or other device that is not intrinsically integrated. But, with the new ELD mandate, if and when they travel 100 miles or more from their home terminal, they’ll all need to have an ELD device that meets the more stringent requirement of being intrinsically integrated into the truck’s operating system.

Currently, there are more than 3.7 million of these truck in commercial operation. It is estimated that more than 60% of them will need to install a compliant ELD. Otherwise, drivers who do not comply to the new ELD mandate are at risk of being fined whenever they travel more than a couple of hours from home.

Is the new capacity crisis possible?

When the first ELD mandate occurred, back in 2017, there was a full-on panic in the industry. But, as it turned out, no lasting impact was made. The first mandate was well publicized, therefore, the industry had enough time to prepare for it.

However, some disruption came along in 2018 and had a short-term impact on rates. Come the third quarter of the same year, most fleets had adapted to the new technology and the end result was not as dramatic as expected.

Following the new mandate expected to begin this December, even larger population of trucks will be under its influence. Improved technology will eventually lead to an even more efficient workplace. However, there is still one very big problem. A surprisingly large percentage of the industry is unaware of the looming changes in ELD requirements.

Retailers have continued to redesign their networks to keep up with the rise of consumer’s demand and changing shopping behaviors. The right model for distributing high-volume goods is one of the key factors in the retail industry. With pressure on the industry to adapt rising, finding the quickest and most cost-effective way to keep retail products moving is very important.

Strategies for retail moving – pool distribution

So far, modern pool distribution is one of the most used strategies. In the upcoming years, store-level competition will grow. That will bring new challenges to the specialty retailers in their attempt to enhance the customer shopping experience.

That will also put pressure on the logistics processes that help keep store shelves stocked and replenished, as well as those that ensure merchandise arrives on-time, particularly during peak shopping seasons.

Intensifying e-commerce pressure and the changing face of America’s malls are giving pool distribution strategy some new aspects. Pool distribution represents a unique way of sharing a common network of logistics services providers to manage the flow of goods from DCs/suppliers to the backrooms of numerous geographically dispersed stores – to substantially lower costs and increase delivery frequency.

The benefits of pool distribution

Nowadays, consumer expectations have evolved. And the mere benefits of delivery speed and cost-savings are not the only reason why pool distribution is good for retailers. There is also in-stock inventory, which includes in-store and online, precise fulfillment times, more frequent returns and flexible delivery options.

The ultimate goal for the retailer is not to have inventory in its distribution center, but to get it on the shelf. Therefore, in addition to the transportation and distribution cost-savings, this model greatly reduces transit time and streamlines delivery to the store.

Having merchandise at-the-ready ensures more timely replenishment when stores need it, and helps minimize the likelihood of out-of-stocks. That prevents your customers from eroding their loyalty or turning them towards your competition.

Imagine having five separate less than truckload (LTL) deliveries to a mall in one day. But now,  instead of five separate trucks, those retailers share a single delivery where each store gets serviced as one stop. The volume of goods moving through a dedicated transportation network is higher in that lane so the stores can be replenished more often. Results are the lower cost of LTL along with the higher speed of parcels.

Variety of innovative ways to use pool distribution

In order to compete with e-commerce retailers, who are able to be more responsive to shopper’s needs, pool distribution is used in a variety of innovative ways. For instance, retailers who use pool distribution have complete visibility into where merchandise is at a moment’s notice.

Modern pool retailers also have greater insight into replenishment lead times which is helping them to optimize in-store inventory management and replenishment programs. One of those retailers, Five Below, discussed its use of pool distribution in high-volume markets at last year’s Descartes Evolution.

The company explained how to achieve greater transparency and flexibility in managing inventory coming into its stores, and helping the company make better use of backrooms. Other companies, such as Caleres Inc., strategically use pool points themselves as inventory storage locations for fast-moving, peak season and/or promotional inventory.

Specialty retailers to meet the demands of modern-day consumers

From the clothing on the shelves to the shipments consumers get in stores, at work or at home, everything is touched by logistics. And, logistics is no longer a backroom function, it’s front and center as part of the brand experience.

And nowadays, specialty retailers need to ensure they are transforming to meet the demands of modern day consumers. Especially, since we live in a time when malls are becoming more of an experience, and exciting e-commerce companies are opening their first stores.A strategy used to optimize how, when and where inventory is received while freeing up employees to interact with consumers and close sales are the biggest benefit given by the pool distribution. That way, retailers are doing their job no matter who sets up shop next door.

The cost of moving household goods from trucking to maritime shipping are rising. Therefore, those goods are getting pricier. As Procter and Gamble spokeswoman Jennifer Corso explained that U.S. trucking costs are up 25% in comparing with the year before.

“A key driver of this has been increased demand for trucking and a driver shortage. These increased costs obviously put pressure on margins, hence our continued focus on productivity throughout the company to help offset these costs, as well as rising commodity costs” Corso added.

What seems to be the issue?

The main problem can be explained by the simple correlation between supply and demand. In particular, trucking has been squeezed for years between an aging workforce of drivers and increased tonnage demands.

President of Dayton trucking company Jet Express and American Trucking Associations’ past chairman, Kevin Burch, described this situation as a “perfect storm.” He said that all those commodities such as truckloads of toilet issue or truckloads of paper towels are going to cost more. “It’s reality. It’s going to touch everything.”

The significance of the trucking industry

Director of safety for Xenia trucking company Homerun Inc. Tom Milby explained the vast significance of the trucking industry in our everyday lives. “The trucking industry brings everything that you see. Your food, your cars.” Everything is transported either directly to consumers or to retail outlets — grocery stores, malls, brick-and-mortar outlets.

Kevin Burch said that the electronic logging requirements that went into effect in late 2017 are controlling hours of service for trucking. In addition, the number of truck drivers is down while shipping tonnage is up. “You’re going to need more people to handle the same amount of freight,” Burch added. “Well guess what? We have an economy that’s going like crazy right now, so that just compounds it.”

Big companies suffer the most

A long-time distributor of McDonald’s, Martin-Bower Co. is is raising delivery fees. That way, menu prices are affected. Tom Milby said that his company lacks the number of drivers – they have 200 but could use up to 300 drivers. “It’s just a struggle for us to get to that number. With the baby boomers retiring, millennials don’t want to get into the trucking business.”

Milby added that his company is looking for local and out-of-town drivers. Good drivers can always expect to make good money. “I’ve got drivers making $80,000 a year.” Aside from household goods, gas taxes in Ohio could also rise.

Trucking is not alone in pushing costs up

Recently, Ohio Governor Mike DeWine has unveiled an executive budget for fiscal years 2020-21 in which he has proposed an 18-cent-per gallon gas tax hike that would generate about $1.2 billion a year for roads and bridges.

Also, in January 2020, the International Maritime Organization is expected to impose new limits on sulfur pollution from ships on international waters. Stated imposition will certainly impact freight rates as well.

Detention time – typically defined as greater than a two-hour wait – affects driver efficiency, shipping capacity, and safety, with a negative financial impact for all stakeholders. According to a survey by data analyst DAT Solutions, nearly 63 percent of drivers spend more than three hours at the shipper’s dock each time they are loading or unloading.

Lengthy loading dock wait times have plagued the trucking industry for years, with serious consequences for drivers and shippers alike. And the problem is widespread.

Significant time-loss affects a driver’s salary

Drivers waste significant time on inflexible appointments and waiting to load and unload. In addition to not being paid for weather delays, time spent sitting in traffic jams or waiting at border crossings, many truck drivers are not compensated for the hours spent waiting to load and unload freight. Consequently, time wasted waiting to load or unload represents lost income – and it’s not pocket change.

According to data in a white paper by J.B. Hunt Transport, of the 660 minutes (11 hours) of available driving time, an average of only 390 minutes (6.5 hours) is actually spent on the road. The Inspector General’s audit report estimated that driver detention is associated with a $1.1 billion to $1.3 billion decrease in annual earnings for U.S. truckers.

This shortfall translates into a loss of income of between $1,281 and $1,534 per driver per year, or 3.0 to 3.6 percent of a driver’s average annual income. Similarly, detention time reduces net income of for-hire motor carriers to the tune of $250.6 million to $320.9 million each year.

Crash rate increases with detention time

A mere 15-minute increase in average dwell time – a combination of detention time plus time spent loading and unloading freight – increases the average expected crash rate by 6.2 percent or the equivalent of one additional crash per 1,000 tractor-trailers or straight trucks on the road.

Detention time increases the risk of these crashes by encroaching on drivers’ available waking hours, contributing to fatigue when they are on the road. According to the most recent data from the Federal Motor Carrier Safety Administration (FMCSA), in 2015, 415,000 crashes occurred involving large trucks.

Indeed, the FMCSA report indicates that detention increases the likelihood of truck crashes involving fatalities or significant injuries. Additionally, the report found that, on average, every 5 percent increase in stops that incur detention time results in a 4.7 percent increase in expected crash rates.

“Shipper of choice” program minimizes wait times

Shippers incur detention charges intended to compensate drivers for undue time spent waiting to unload or load. If shippers are unable to streamline their operations to efficiently manage loading and unloading at their warehouse or distribution center, they can face chargebacks from customers who are unhappy about not receiving merchandise by the agreed-upon delivery date.

In addition to hindering supply chain performance and damaging carrier relationships, long load dock wait times impact labor costs, requiring overtime compensation for employees who must stay late to accommodate delays. Fees typically range from $50 to $100 per hour for any delay longer than two hours.

With the newly instituted ELD rules, a renewed focus on wait times is spurring major carriers and owner-operators alike to drop shippers that habitually impede freight movement with long wait times. In this same spirit, some carriers have launched “shipper of choice” programs to prioritize shippers who minimize wait times for drivers.

Given the freight hauling capacity crunch currently facing the industry due to the one-two punch of driver shortage and rising demand, shippers cannot afford to be blacklisted or they will face a serious challenge to cover their loads.

Online dock appointments

Helpful tactics for improving loading and unloading efficiency, such as implementing drop-and-hook systems and designating “live-load” dock doors are being used as a way to reduce detention time and take control of their inbound and outbound operations. Forward-thinking shippers are using technology to enable shippers, carriers, and consignees to collaboratively schedule dock door appointments online.

By distributing the responsibility of scheduling appointments across all stakeholders, dock appointment scheduling technology provides greater control over freight delivery and allows organizations to proactively minimize wait times. Open communication across the supply chain ensures transparency and visibility and also provides a clear audit trail to enhance compliance tracking, dispute resolution and managing chargebacks.

That way, carriers avoid frustrating detention time and shippers can manage inventory more efficiently, which reduces labor and supply chain costs. With technology-enabled dock appointment scheduling, carriers can recoup their time by minimizing inflexible appointments and reducing dwell time to increase capacity.

A real game-changer

Estimates in the J.B. Hunt paper indicated that, by eliminating just 30 minutes at the shipper and 30 minutes at the receiver, the extra hour a driver could remain on the road each day would be equivalent to 50 miles per day, or 12,500 miles per year (assuming the driver spends 250 days on the road annually). These carrier savings translate to increased supply chain efficiency, a mitigated risk of road accidents, and improved operational performance for shippers.

Shippers can minimize dock wait times for load/unload activities, manage inventory levels, increase warehouse efficiency by reducing peak resource requirements and reduce congestion by limiting idling in the yard while waiting for a dock door to become available. With greater visibility into inbound shipments, dock appointment scheduling can be a real game-changer!

Beer making company increases warehouse utilization by switching from RFID-powered forklift tracking with SEWIO RTLS. The Budweiser Budvar Brewer leveraged Sewio real-time location system (RTLS) to improve warehouse utilization, decrease maintenance costs and get additional insights into their logistics operations.

The flaws of a passive RFID solution

While the company was using a passive RFID solution in order to minimize human error in operating 20,000+ pallets with hundreds of varieties of beers using forklifts equipped with an RFID antenna at their chassis and RFID tags located at each of the tracked pallet positions, many problems have occurred.

Due to the easy desynchronization or even damage to antennas, the maintenance cost grew rapidly, and the system uptime was only 80%. Budweiser Budvar decided to replace the RFID-built system with Sewio UWB RTLS for indoor tracking using Decawave chip, in order to retain the process of minimizing human errors in logistics but crucially lower the maintenance costs and increase the system uptime.

The benefits of UWB RTLS

The newly acquired insights such as daily attendance, distance traveled and utilization of each forklift, together with heatmaps and spaghetti diagrams, have allowed logistics managers in Budweiser to better utilize the current warehouse, virtually growing it by 19%. With the newly implemented system, the reliability of the system itself has resulted in 99% of system uptime.

Head of Logistics at Budweiser Budvar, Pavel Pánek, confirmed that the benefits of UWB are in comparing it with RFID. “While the initial cost for RFID versus UWB is almost identical, UWB undoubtedly outperforms RFID thanks to lower maintenance costs, lower risk of damage and higher accessibility and scalability of the system”.

Companies using Ultra-wideband technology

CEO of Sewio Networks, Milan Šimek, explained why UWB is the proper technology to use. “In many uses cases, we see RFID and UWB RTLS complement each other well when integrated into a single solution. If our customer needs precise true location data provided by a scalable system with a low maintenance cost, UWB is then the right first and only technology to choose”.

Vice president Marketing at Decawave, Mickael Viot, agreed with their company’s partner. “At Decawave our goal is to make micro-location technology available to the masses by providing chips with state of the art performance at an affordable price. We are delighted to see partners like Sewio embrace the same philosophy and deliver RTLS systems that are cost competitive while delivering superior performance and capabilities to end customers”.