iTECH: To Share or Not To Share
This story appears in the April /May 2014 issue of iTECH, published in the April 14 print edition of Transport Topics. Click here to subscribe today.
By Bruce Lilly, Contributing Writer
On the plus side, sharing information about the best ways to use technology helps the trucking industry become more efficient and successful. Some companies also find that technology can be a powerful marketing tool. Shippers often want their carriers, brokers and logistics companies to have sophisticated systems, so there’s an advantage to publicizing the use of various software applications.
See sidebar, ‘Freight Transportation Seen Lagging in Tech Applications’
The main argument against sharing such information is the age-old fear that opening up about how you run your company will make life easier for the competition. In an industry with slim margins and so many companies competing for the available freight, it should come as no surprise that many carriers hold their cards close to the chest.
Jim Burg, president of James Burg Trucking Co. in Warren, Mich., is a good example. On the one hand, he does his part to help the industry by sitting on the board of directors of HELP Inc., a public-private partnership that works on improving transportation technology, such as weigh-station bypass systems. But at the same time, Burg is cautious about sharing information concerning the use of technology at his trucking company.
“There can be downsides for carriers who share information about the technology they use,” Burg said. “For example, say that you learn that another carrier is using the XYZ system. Maybe you used that system once and you know that it has certain weaknesses. This would tell you something about that carrier’s weaknesses, because you know there are problems with the data the system delivers.”
Industry conferences routinely include presentations in which companies reveal a wide variety of information about their use of technology, but there are limits. On a panel at American Trucking Associations’ technology summit in December, Sam Faucette, vice president of safety and compliance at Old Dominion Freight Line Inc., a less-than-truckload carrier based in Thomasville, N.C., spoke about how Old Dominion uses the results of multiple data streams to coach driver behavior.
“I was sharing our approach to some of the best practices used throughout the industry,” Faucette said. “My presentation was about what the data means and how we sort it out, not how we use technology within our operations.”
The dividing line is when technology is used to gain a strategic advantage. “Our use of technology provides us with certain efficiencies,” Faucette said. “Sharing information about how we use technology to achieve those kinds of advantages crosses a line from talking about a best practice to revealing a definitive measure that we may use and someone else doesn’t. We prefer to keep that information private for competitive reasons.”
Many companies have developed unique strategies for using technology — call it their “secret sauce” — but that doesn’t mean some secrets can’t be shared, if the payback is deemed to be greater than the cost. Danny Simon, vice president of operations at Load Delivered Logistics in Chicago, gave the example of using an online tracking program to locate driver cellphones.
“We were an early adopter, so drivers hadn’t heard about this from other sources. Most drivers were wary of the technology,” Simon said. “By talking about this in a public forum, I could suggest that other companies try to use this. If it becomes commonplace, it will benefit everyone. Sharing this information may give competitors the same advantage that we’re seeking, but that’s OK, because we really want this capability.”
The benefits that come from sharing can’t always be predicted. Simon said that after he discussed the cellphone tracking technology, several people approached him and indicated that they would join his effort to make it more widespread, but something else happened.
“Some people suggested that a different technology platform would work better,” he said. “They were saying, ‘Here’s how we’ve been doing it. Why don’t we take this approach?’ Conversations like this open up discussions about what industry best practices should be and how to get together and really make it happen. Sharing at conferences starts conversations that can benefit everyone.”
Another compelling reason to speak publicly about your company’s use of technology is publicity. Some companies are willing to make presentations at industry forums because the exposure is good for business. ZMac Transportation Solutions of Racine, Wis., specializes in overdimensional flatbed freight. A portion of its business comes from other freight companies, so it always helps to become better known.
The dramatic increase in the use of technology within the trucking industry over the past two decades clearly affects strategies for success. In Matt Ziegler’s view, one change is that it no longer makes sense to keep a tight lid on your business practices.
“Back before the technology age, people in trucking could keep secrets and have a big advantage if they kept their mouths shut,” Ziegler, ZMac’s president, said, “but it’s harder to keep secrets today. People will find out what you’re doing, or they’re going to figure out a way to do it better. You need a different strategy. The key is to keep moving forward. Sharing what I was doing yesterday is fine. I’m not sharing what I’m planning to do a year from now.”
Technology providers are familiar with the debate within the industry over how much to reveal about a company’s use of it. Monica Truelsch, director of marketing at TMW Systems in Cleveland, pointed to the intense challenges that come with trucking and transportation management.
“Anything that can provide an edge over your competition — and there is always competition — can make the difference between success and hard times,” she said. “We hear frequently from our customers that while they may be willing to provide a strong testimonial for our software in a personal conversation with another trucking company considering some work with us, they are not willing to go on the record, in press or public speech, to confirm they are a customer of ours.”
Truelsch also emphasized that the decision to avoid sharing information publicly should not preclude opportunities to share information directly with other companies. “Sharing selectively with a competitor can help improve products or services for the benefit of all involved,” she said. “Developing customer relationships and building mutual trust that leads to cooperative information sharing often has powerful and quite unexpected, far-reaching positive consequences for carriers and shippers. Moving beyond an adversarial relationship to establish shared goals is a positive move in controlling transportation expense, improving asset utilization and driving cost and waste out of operations for both parties.”
Another proponent of the value that can come from sharing information at industry forums is Mark Cubine, vice president of marketing at McLeod Software in Birmingham, Ala. “The exchange of ideas at conferences yields great value for the participants,” he said. “The best idea for how to use your technology may be the one you haven’t thought of yet, and by participating in a forum that lets you exchange and share those ideas, there is usually greater gain than the risk of giving away your most important advantages. Companies can do this and still protect certain things they consider ‘the secret sauce. ’ ”
Cubine also pointed out another reason why some companies are reluctant to reveal their technology practices. “There are too many companies in this industry that are still running ancient ‘green screen’ systems on old technology platforms that lack the Web services, business intelligence, mobile-device support, Web-portal support and other things companies running modern systems have,” he said. “I would not want to expose the fact that my company is running on what is essentially an early 1990s technology platform if I am trying to make a positive impression on my customers.”
One of the challenges for software companies is anticipating the needs of technology users. Cubine said that McLeod gains valuable information by listening to customers speak about their use of technology, their problems and their ideas for solutions. “This input is by far the largest influence on our product development,” he said.
This is a common theme with technology companies, and a good example comes from PeopleNet Communications Corp., based in Minnetonka, Minn. At People Net’s annual user conference, customers share experiences in presentations and round-table discussions, said Rick Ochsendorf, senior vice president of operations. “An exchange of ideas, needs and innovative uses can guide product development and solution enhancement, and strengthen technology to create a win for all users,” he said. “It’s natural that dialogue results in closer working relationships between providers and customers.”
Jim Sassen, senior manager of product marketing at San Diego-based Omnitracs, pointed out that one benefit of creating these conversations is the unexpected ideas that can emerge. “The product development teams at Omnitracs work with customers to understand their business and how they use our solutions,” he said. “The information we gather from customers helps drive our current and future product roadmaps. When customers share at public forums, it often gets other people talking, and sometimes interesting use cases emerge from these encounters that we hadn’t anticipated.”
As more tech-savvy people join the industry, companies look at technology differently, and this may affect decisions about when and how much information to share. “The new generation of younger people entering the business are very comfortable with technology,” Sassen said. “They embrace technology and want to see how they can leverage it in this industry.”
As the presence of software applications intensifies throughout the industry, it may become harder to avoid sharing information. “The use of information technology within trucking is expanding exponentially,” said Warren Hoemann, senior vice president at ATA. “As opposed to being reluctant to share, many companies want to advertise the fact that they’re using information technology of various sorts in order to show that they’re on the cutting edge. Having good technology can be a competitive advantage, but more and more, it’s becoming simply a routine customer expectation.”
While no one is predicting a future without competition, there are voices arguing for new perspectives on the balance between competition and collaboration. Susan Fall, president of LaunchIt Public Relations in San Diego, works exclusively with transportation technology companies and sees a brighter future for the industry through greater sharing of knowledge.
“In the freight transportation industry, other companies aren’t the competition,” she said. “The competition is regulation. The industry should work collaboratively to demonstrate that we are improving such things as fuel efficiency and carbon emissions. If we stick together, instead of keeping quiet about our less spending money against each other, we’ll get much further.”
As ZMac’s Ziegler sees it, collaboration also has the potential to help the industry present a better face to the public. “As an industry, we have to change the way America perceives trucking,” he said. “Helping each other is a way to improve the industry standard and get away from the renegade image that still exists. It’s possible that sharing information will help the competition, but in the end, don’t we want to help people improve? You want everyone to do well.”
