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Saturday, July 20, 2024

Managing Costs is Transportation Industry’s Top Business Challenge



The results of a survey by Teletrac Navman, a location-based technology service provider for managing mobile assets, found reducing costs, increasing fleet size, incorporating telematics solutions, and hiring and retaining new drivers were top business priorities across the industry.

The survey, Telematics Benchmark Report: U.S. Transportation Edition, examined best practices, trends and current issues influencing transportation organizations in the United States.

39 percent of respondents named reducing operational costs as their top business goal for 2017. Margins are already thin across the industry due to expenses that companies cannot control, like fluctuating fuel costs; as a result, more organizations are looking to solutions like technology and outsourcing drivers and equipment to improve productivity, streamline operations and reduce waste.

Here are some of the other insights the survey revealed:

The electronic logging device mandate tops the list of compliance concerns for 73 percent of fleets.

More than three-quarters of organizations said they are confident that they will be ELD-ready by the December deadline, with large fleets reporting the highest confidence.

Despite high driver concern about ELDs, 28 percent of organizations report doing nothing to address those concerns.

For organizations already implementing ELDs, eliminating manual processes (30%), reducing risk of compliance violations (28%) and improving driver and public safety (16%) were rated as top benefits.

Managing costs presents a major challenge, but most respondents still plan to invest in their businesses. 61 percent plan to increase their vehicles and equipment during the next year to modernize their fleets, thereby reducing maintenance costs over time.

To address the growing driver shortage, 58 percent say they reward drivers for good performance to improve retention and 20 percent report they are hiring more drivers in the next year. Freight tonnage is increasing and companies have a variety of ways to meet demand: 30 percent of respondents outsource drivers, 30 percent outsource trucks and 12 percent use telematics.

Investing in technology is top of mind. 74 percent of respondents either currently use telematics or plan to do so in the next year, including GPS tracking and fleet management solutions. 41 percent name implementing technology for regulatory compliance as their top planned investment during the next year. While nearly half of respondents report relying on pulling paper records for hiring and business projections, 23 percent are using big data tools.

“Facing fluctuating fuel costs, a driver shortage and new regulatory challenges, it’s not surprising that executives in transportation are doing everything they can to control costs and boost revenue,” said Sid Nair, senior director of transport and compliance, Teletrac Navman. “Companies are investing in technologies from telematics to data management tools to help streamline their workflow and connect drivers to the back office. This is only the beginning of a paradigm shift centred around technology adoption and use.”