The rise of e-commerce contributed to an immense demand for more small package logistics. Unfortunately, partial management is anything but easy. Meanwhile, the list of new charges and possible accessorials continues to expand. And, shippers face the prospect of paying more for shipments that seemed like they would cost less. According to Talking Logistics, “parcel carriers love to be different and make things complicated – from dozens of charge types and frequent new accessorials, to rules that differ by carrier for important aspects from labels to routing, integration, and more. In addition, if one system isn’t flexible enough to respond to changing business needs, things get complex very quickly.” As a result, more companies are turning to logistics telematics to keep these extra charges under control, and supply chain executives need to understand why.
The State of Freight Management
The Continuing Issue With Visibility in Final Mile and Its Impact on Accessorials
A common complaint in modern logistics involves the limited access to real-time data within the final mile. Traditional tracking tools were designed to provide traceability through the most recent scan. Unfortunately, this is the crux where traditional tracking cells within final mile. At the same time, final mile’s continuous change of demands on equipment and personnel mean shippers may not know the total costs until an invoice arrives. For each new need or change in the final mile delivery, shippers may incur additional accessorials. Challenges in collecting data within the final mile are rampant. The sheer volume of parcel service providers can present major hurdles to integrating systems. Limited insight into total volume could lead to overlooked volume discounts, and changes in the geographic footprint and distribution network of a company may further impact the total accessorial charge.
Even if everything goes as planned, extra time waiting to load or unload packages at the dock may lead to additional accessorials—such as dwell time and detention fees. It’s an endless loop of higher freight costs. Fortunately, logistics telematics can automate and help shippers save money by reducing these costs.
Logistics Telematics Automate Last Mile Visibility and Transparency
Logistics telematics include a suite of technologies that seek to provide real-time visibility and transparency into all freight movements regardless of mode or current stage in the shipping journey. Key technologies, such as GPS-enabled trucks, predictive algorithms that continuously update the estimated time of arrival (ETA), and the use of electronic locking devices (ELDs). In fact, the ability to leverage logistics telematics has grown significantly easier following the implementation of the ELD mandate. After all, all carriers are now required to outfit their tracks with ELDs, and as technology advances, bringing the data provided by an ELD into the 21st century with ELDs connected to the Internet of Things (IOT) is easier than ever. According to Inbound Logistics, “the truth is that the technology had a bit of a rocky start. Expensive hardware and program costs made a positive ROI challenging, and would-be early adopters were scared away as several telematics providers folded. But today, hardware costs are down as much as 300 percent, installations have been streamlined for cost and efficiency, and bugs and other technology issues are rare.
The telematics adoption timeline and the impact of the technology can be equated to other life-changing technologies, like the personal computer, Internet, and mobile phone. All of those took much longer than 10 years to gain traction and reach critical mass. However, in 2014, most of us couldn’t imagine conducting business without them.”
Best Practices for Using Telematics and Data to Improve Customer Experiences
Leveraging telematics within the final mile means bringing your systems together through connected technologies and platforms. Of course, additional opportunities for deploying logistics telematics exists. To maximize ROI, supply chain executives should look to apply these best practices in deploying logistics telematics:
- Choose an ELD that are ready connects to cellular networks to eliminate the need for outfitting vehicles with additional connectivity capabilities.
- Consider taking advantage of drivers’ personal device connections and mobile apps to collect real-time GPS data on shipment status.
- Digitize document management by leveraging mobile devices to upload and manage the bill of lading, freight invoices, proof of delivery, and all other documents.
- Measure and enforce compliance with logistics telematics standards in your company with key performance indicators (KPIs) that incentivize participation among third-party drivers and increase transparency simultaneously.
Connect Your Supply Chain With Telematics to Thrive in 2020 and Beyond
Supply chain billing is only increasing in complexity, and as the global supply chain grows more connected, the opportunities to increase efficiency through digital payments and processes wax in tandem. Furthermore, the application of logistics telematics could conservatively save drivers 19 hours per year. Applied across thousands of drivers and millions of documents, the opportunities to save money by keeping everyone informed and working together through telematics are tremendous.