Industry Changes Could Force Transport Firms to Adapt or Fail
This story appears in the Nov. 14 print edition of Transport Topics.
DALLAS — As emerging technologies and new business models transform the way freight moves, transportation firms will need to undergo a metamorphosis of their own to compete in this new world, executives said.
Truckstop.com CEO Paris Cole said many changes are poised to have a “tremendous” effect on the industry, ranging from same-day delivery in the near term to revolutionary technologies such as the autonomous truck further into the future.
“Some people might see opportunity, others might see adversity, others might call it disruption,” Cole said here Nov. 2 at the load board operator’s annual conference. “But whatever you call it, it’s change — significant change — for our industry in the next 15 years.”
He called on brokers, carriers and others represented in the audience to consider how their businesses will need to adapt.
James Tompkins, CEO of supply- chain consulting firm Tompkins International, also addressed the topic.
He said the frequency and magnitude of market disruptions have increased in recent years.
As one example, he referred to the way Amazon.com has set its sights on order fulfillment and transportation after revolutionizing online retail. During these times of significant change, the typical strategy of improving one’s operations little by little is no longer good enough. “All of a sudden, that doesn’t work anymore,” Tompkins said.
Instead, firms must respond by transforming or completely reinventing their businesses or risk becoming obsolete, he said.
In fact, the rate of failure for businesses will be “much greater than we’ve experienced in our lives, because rate of disruption is much greater,” Tompkins added.
The discussion of business transformation echoed Truckstop.com’s evolution.
The online load board operator, founded in 1995, has been morphing into a provider of data- driven services, including load planning and optimization, transportation management, telematics, rate benchmarking and spot market data.
To expand its services, Truckstop.com on Nov. 2 introduced a freight-tracking platform that provides brokers with updates on a load’s location and when it is picked up or delivered.
That information flows from the carrier through Truckstop Mobile, a new application for iOS and Android devices.
The tracking service reduces the need for check-calls to drivers, said Thayne Boren, general manager of Truckstop.com’s mobile solutions. “This is a big step in automating existing processes while enhancing the user experience,” he said.
Boren said Truckstop.com plans to add load-tracking integrations with truck telematics systems in the future, but does not plan to do the same for older flip phones.
Truckstop Mobile replaces the company’s existing ITS Trucker app.
Meanwhile, Truckstop.com is gearing up for the federal mandate of electronic logging devices.
Under that regulation, most carriers using paper logbooks will be required to switch to ELDs by December 2017.
Truckstop.com is planning to introduce its own ELD product that connects with its load board, but the company also will offer integrations with third-party vendors to give customers multiple options, Boren said.
He also recommended that carriers not wait until the last minute to install the devices. “There’s a great need for vendors and for brokerage and logistics customers to help these drivers adopt this technology early,” he said, adding that brokers and shippers will prefer to work with carriers using ELDs to ensure compliance and possibly enable track and trace capabilities.
Driver turnover also is a “big concern,” Boren said.
A recent study by Truckstop.com found that about 5% of drivers said they will exit the industry as a result of the rule. That expected decrease in capacity will artificially inflate rates for spot market freight, Boren said.
Increased regulations were the top concern of 50% of owner- operators in a separate survey conducted in the third quarter by Truckstop.com in conjunction with Bloomberg, Cole said. That represented a dramatic spike from the 30% who cited regulation just a quarter earlier.
