Software Firms Seeing Greater Demand as Fleets Seek Savings, Efficiency Gains
By Dan Leone, Staff Reporter
This story appears in the June 2 print edition of Transport Topics. Click here to subscribe today.
Executives with several software firms said their businesses are awash with inquiries from carriers seeking to streamline operations as they struggle with record fuel prices and sluggish freight demand.
You get interest in enterprise software to do one of two things: to support the growth of a business, or to make a business more efficient,” said David Wangler, president of TMW Systems, Beachwood, Ohio. “The pendulum began to move towards efficiency in the middle of 2007.”
Wangler said there has been “tremendous interest” for products that can assist with “the fuel problem.”
TMW publishes a fuel management module called IDSC ExpertFuel. Billed as “fuel-optimization software,” the module not only locates the cheapest diesel along a given route but also helps fleet managers plan strategies for cutting down out-of-route miles and curtailing idle times.
The module was designed by Integrated Decision Support Corp., which TMW acquired last year.
Like TMW’s Wangler, the chief operating officer of McLeod Software, Birmingham, Ala., said demand for information systems and services remains strong despite the trucking industry’s collective belt-tightening.
“A lot of folks buy a software system with the intent of reducing their staff and becoming more efficient,” said McLeod COO Matt Cacace.
Shippers are responsible in part for the steady stream of carrier inquiries, he added.
“My observation is that shippers are pushing the carriers, because [shippers] are getting pressured to keep their costs down, so the carriers are trying to get more efficient as well.”
Cacace said one of McLeod’s shipper clients has asked the company to “modify its [fuel surcharge calculations] down to tenths of a mile” to help the shipper minimize fuel remittances paid to carriers.
“It used to be ‘save pennies per mile,’ ” he noted. “Now it’s ‘save pennies per one-tenth of a mile.’ ”
Carriers are likewise looking to use software to pinch pennies, Cacace said.
“We’ve had a request [from a carrier] to do detention [charges] by the minute,” he said.
Detention charges, compensation paid by a carrier to a driver when the driver is forced to wait at a loading dock, are ordinarily assessed on an hourly basis, Cacace said.
Meanwhile, an executive with Innovative Computing Corp., Brentwood, Tenn., said that the company has seen a surge in interest from carriers that are “looking for ways to tighten up” their operations.
“In January alone, we had more requests for [software] demonstrations than we had in the first six months of 2007,” said Joanne Williams, ICC’s vice president of sales and marketing.
In particular, sales of ICC’s Access and AccessPlus products, enterprise management systems designed for truckload carriers, have risen 30% year-over-year, Williams said.
Access and AccessPlus are Web-based applications that are hosted on ICC’s servers. Trucking companies can access ICC servers remotely to use the software, and are charged only when they actually dispatch a truck.
“With the decline in freight right now, [carriers] are only paying for the trucks that are dispatched each month,” Williams said.
Those applications represent a significant departure for ICC. The company’s traditional offering, Innovative Enterprise Software, must be hosted on a carrier’s own server, and requires at least some full-time staff to maintain.
Williams believes that the uptick in Access and AccessPlus sales is primarily because of “smaller trucking companies looking for ways to become more efficient,” a goal that can be met by trimming back IT infrastructure and keeping fewer IT personnel on staff, she said.
Enterprise software providers are not the only information technology firms cashing in on the trucking industry’s drive for efficiency.
“Our business is really good,” said Cindy Nelson, senior marketing director with EBE Technologies, Moline, Ill.
EBE’s applications interface with a carrier’s existing back-office software to help automate paperwork processing. EBE said its automation systems helped one client reduce its back-office staffing needs by 30%.
“Anywhere carriers can find any incremental improvement, that drops right to their bottom lines,” Nelson said.
