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Technologies for automotive logistics and delivery

“Sometimes it’s easier to buy technology that is already winning the market and complements what you do, complements your toolbox” – James Langley, Senior Vice President, Trimble Transportation

For the last 5 years, products covering the delivery and transport logistics niche have been a steady trend among the demanded IT solutions. At the same time, there is a stable, high, constant demand for custom and individual solutions.

The global logistics business continues to grow ahead of schedule. As an example, XPO Logistics Inc , a transportation and logistics company based in Greenwich, Connecticut, reported that total revenue for the 4th quarter of 2020 rose 13% to $4.67 billion from $4.14 billion.

Malcolm Wilson, CEO of @XPOLogistics_Eu , attributed the growth to technology initiatives. Among them is its own transport technology platform, which allows you to track the status of freight traffic in real time. 

In Europe, road transportation in most countries is the undisputed leader in terms of traffic volumes ( more ).

What are the reasons, and what dictates the need to spend time and financial resources, when there seems to be a large number of ready-made solutions on the market? And in general – why come to a niche in which companies with many years of experience, a client base and, it would seem, established processes already operate? Existing integrators indicate that the systems used allow saving fuel and lubricants by 30%, reducing mileage by 35%, reducing the time for planning routes by 2.5 times, and increasing the load of vehicles by 20%. 

Of course, all integrators strive to show the maximum benefits that the system can give to customers and back this up with many cases. But, each company that has its own fleet of vehicles also has its own operational processes, areas of work, standards, cargo, information systems, performance evaluation indicators. All this affects the final benefit from the implementation of the system. In our opinion, such miscalculations should be individual for each company; generalizations cannot be made. 

Let’s try to understand the reasons and find objective conditions that will help you understand whether you should go your own way or come to a ready-made solution.

Why trucking

Why trucking

The total length of the world’s road network exceeds 23 million km. A third of the roads are concentrated in North America, a quarter – in Western Europe, while road transport is the most flexible. In fact, they allow you to deliver the goods to any point where there is a relatively passable road. Plus, vehicles can be easily combined with other modes of transport. And, although it is more expensive than the railway, it is faster and practically does not depend on climatic conditions. Well suited for container transport, suitable for dangerous goods. 

We will make a reservation right away, we will try to be as unbiased as possible in our essay, as far as possible on the part of a team that has been developing solutions of a similar plan for 7 years for different levels of requirements of the Client from different countries and different profile orientations.

There are five key “why” requirements:

  • Cheaper;
  • Faster;
  • More convenient;
  • More functional;
  • More individual features of the markets of specific countries.

Let’s take a closer look at these aspects that push us to search for an individual solution “for ourselves”:

1. Willingness to stop paying for a third party software solution

using a third party software solution

A fairly obvious motive, as an example I will give a niche of car transportation in the USA, where carriers pay on average for the use of such a product 

(Central Dispatch, United, Super Dispatch, 1Dispatch) about $60 per month from one track. It is easy to calculate that for an “average hand” company in the US with 150-180 trucks, the basic package of services (excluding attendants) will be about 108-130K dollars a year. In principle, this is already a sufficient amount to think about creating your own solution, plus at least three other reinforcing factors:

  • if the company is in the growth stage (and from 300 trucks it’s just an obvious benefit), then the cost recovery is less than 2 years;
  • the ability to have a solution strictly for your needs and strictly with a convenient management interface;
  • well, of course, you can call third-party small carriers and truck owners and give them half the price of the solutions used, thereby gaining loyalty and even increasing attractiveness in terms of willingness to forgive minor mistakes and inconveniences of the initial period + of course, reducing the payback period even more and moving on to the stage receiving additional profit.

As a rule, in such a case, the initial development goals should cover (but not be limited to) the following requirements:

  • minimum time for adaptation and training of personnel;
  • easy and fast ordering;
  • minimum costs for logistics managers to build a delivery route; 
  • minimum costs for managers for normal communication and problem solving;
  • to digitize, as a rule, an already established business with a diverse fleet;
  • reduce the number of outstanding orders;
  • scalability – the ability to increase and change the product;
  • display the current status of the delivery chain;
  • issue and unload the necessary transport documentation;
  • include a reverse supply chain logistics solution.

The term for the development of such a project plan starts, taking into account the preliminary design, from 10 months.

2. You need a minimally simple but informative solution that covers local tasks as quickly as possible

TMS solutions

A frequently encountered requirement, which is usually necessary for companies and manufacturers selling relatively large goods (furniture, household appliances) with delivery to the final recipient. Also, solutions of this format are in demand “in the outback”, and in relatively uncompetitive directions / service areas. Accordingly, it is inexpedient and pointless for such companies to pay for TMS solutions with excess capacity and composition of solutions, or even with a “universal” management interface. 

But both the increased requirements of Clients and situational circumstances – like a pandemic, for example, are forcing us to move away from the analog format.

The control part for such solutions is assembled on some product with a pre-installed set of functionality, such as  Firebase , and mobile applications, if they are needed, for example, for drivers, on a cross-platform solution: Cordova, Flutter. 

This approach makes it possible to obtain an individual solution relatively quickly, but its possibilities and development prospects are limited. Often, the requirements for such solutions do not even require integration with any CRM. Due to this, the development time for such projects is well within the period of 4 months.

3. The desire to have, in addition to a custom-friendly interface, also a set of special functions and solutions that are important for a particular niche or segment

Need for TMS

The need for TMS appears with an increase in the number of orders and a decrease in the timing of their implementation. For example, if there are up to 10 trucks in the fleet, the implementation period of the transportation project is 3-4 days, the manager has time to calculate the best routes. In the case when the terms are reduced to 1 day or less, it is difficult for the manager to take into account all the nuances for all cars and plan routes. Accordingly, errors are inevitable. Yes, if we take conditional 5 trucks, control can be carried out over the phone, but if the staff of drivers and the fleet grow, we need to involve other tools. Thanks to TMS, the manager does not directly collect information, this is automatically done by the system, the manager is focused on the analysis of statistical data.

First of all, these developments are in demand among the transport services of retail chains, which, as a rule, have a large range of orders, a significant number of small items. Then there are logistics services, manufacturing and distribution companies that accumulate and process orders in their own warehouses, and carry out deliveries to customers. Another segment is companies engaged in courier delivery with planning their own deliveries. Thanks to TMS, they become more competitive, since the final price of products on the shelf will be lower due to competent planning of delivery routes, carrying capacity and vehicle loading (up to distribution of pallets) and costs. The next category of users are carrier companies that fulfill customer orders. They need a system in terms of the operational management of their transport (when there are more than 10-20 units). Thanks to the system, they reduce the number of unproductive losses from the use of the fleet of vehicles and, accordingly, the costs associated with the transportation process.

The set of requirements that define the “what and why” should include:

1. Flexible route editor, depending on the types and condition of roads and their congestion, taking into account:

  • road type;
  • type of coverage;
  • types of closed and/or toll roads with “lanes”;
  • average speed of movement;
  • speed factor;
  • the ability to set the priority of road types when planning;
  • road editing;
  • zoning of road parameters with zone coefficients.

2. Optimal cargo space planning: 

  • calculation of occupancy of the cargo space;
  • cargo planning;
  • axle load planning;
  • loading visualization;
  • accounting for compatibility / incompatibility of product groups.

3. When calculating delivery routes, a number of factors are taken into account:

  • dimensions, carrying capacity, type of vehicle;
  • type of ordered goods, their weight, overall dimensions;
  • temporary restrictions on the delivery of goods;
  • minimal cost;
  • balanced in cost and time;
  • priority;
  • groups of delivery points;
  • geo-zones, groups of geo-zones;
  • cross-routing;
  • multipath routing;
  • long haul routing.

The development of such solutions in connection with a large set of individual requests and wishes usually takes a year or more. Often, solutions that were originally made “for themselves” are also moving into a product format or SaaS format.

4. The need to have a comprehensive product that covers the entire supply chain

The need for a comprehensive product

It is in demand for large and diversified companies, for which trucking is only one of the business segments. Such a solution should (in addition to the previously listed) provide the ability to configure and manage the following modules, each of which is a separate component:

TRANSPORT MANAGEMENT

  • Invoicing and settlements
  • Carrier management
  • Client management
  • Discount Management
  • dispatch control
  • Fleet management
  • Real-time driver tracking
  • Order management
  • Routing
  • Planning

FLEET MANAGEMENT

  • dispatch control
  • Personnel Management
  • GPS tracking
  • Incident reporting
  • Inspection Management
  • Inventory Management
  • Maintenance management
  • Routing
  • VIN search
  • Work Order Management

LOGISTICS

  • 3PL Management
  • Barcoding / RFID
  • CRM
  • Cross-docking
  • Loader management
  • Inventory Management
  • Order management
  • Delivery management
  • Supplier management
  • Transportation management

SUPPLY CHAIN ​​MANAGEMENT

  • Electronic data exchange
  • Import/Export Management
  • Inventory Management
  • Order fulfillment
  • Sales and operations planning
  • Delivery management
  • Supplier management
  • Transportation management
  • warehouse management 
  • Multi Location
  • Purchases
  • Quality control
  • Real time synchronization
  • Incoming / putaway management
  • Return Management
  • Delivery management

Accordingly, such complex solutions are already competitive for use not only within one company or even a country, they require development, which, as a rule, is carried out in stages and modules with pre-compiled business models and a product development plan. The stages between releases and updates take from several months to six months, and development and support require a permanent team, which includes, in addition to specialized specialists and developers, also specialists in finance, marketing and others. 

5. The need to comply with the rules of document management or the legislation of a particular country

formation of terms of reference for the editorial office

Infrequent, but occurring condition in the formation of technical specifications for development. 

Every year the World Bank forms the so-called logistics efficiency index. Obviously, despite the whole range of international agreements and regulations, incl. agreements and conventions of the United Nations, including sanitary and phytosanitary conventions, agreements and standards, there are countries with insufficiently developed or organized processes that reduce overall efficiency.

Such tasks that carriers want to formalize and solve when developing include:

  • perishable goods, dangerous goods and livestock regulations and format and procedures
  • control (internal) during transportation, health care, such as: veterinary and phytosanitary; 
  • regulations regarding the admission of vehicles to operation and the admission of drivers to drive them; 
  • insurance relations; 
  • features relating to the contract of carriage; 
  • monitoring compliance with regulations on maximum driving time and required rest periods; 
  • control over the conduct of medical examinations and the preparation of relevant reports.

The specified list is naturally not limited to the indicated problems and varies depending on the country where the Customer is located. As a rule, these are complementary functions to the already selected option from p.p. 1-4 listed above.

Of course, the final decision, whether to choose a ready-made solution from an integrator, or decide to develop it individually, must be made individually, weighing all the pros and cons. However, it should be understood that this is a “long-term” game process. So, for example, one of the largest European operators Raben, which has been in business for 90 (!) years, with a revenue of 1260,000,000 euros, has only 70% coverage of customer document flow transferred to an electronic platform. 

At the same time, in the European logistics network, the largest part of the services of the Raben Group (66%) are precisely road transportation, contract logistics (13%), full-scale transportation (8%), fresh logistics (8%), services of a leading logistics operator (4%) and Sea and Air (1%).

In order for our article to be useful to you, we provide links to platforms where you can not only familiarize yourself with the existing list of solutions by their capabilities, but also honestly read all the reviews about the advantages and disadvantages, make the right and balanced decision.

  • capterra.com
  • g2.com
  • softwareadvice.com

And we wish you the right decision and good luck in business!

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