Survival in a Tightening Market

By Stephan Karczag
December 2007

Escalating costs of operation, competition eroding margins, buy outs by the big guys-all are major concerns for the less-than-truckload and delivery markets. Throw in the ever-increasing cost of fuel and it's a surprise that transportation companies manage to stay in business.

The question is: what can be done besides downsizing? The answer: it's all about efficiency.

Only a few years ago, some in the industry still wondered how much of a difference technology would make. Today, given case study after case study and word of mouth buzz fanned by a tightening economy, those once on the fence are increasingly turning to technology to solve the soaring cost of doing business.

For any size fleet, technology plays an ever-increasing role in fuel economy, efficiency, and profitability. Costs for technology solutions are dropping considerably, and customized tools are becoming increasingly available. Businesses must look to technology as a practical, less-expensive solution to increasing capacity and income. Below: three trucking companies that did just that, and were able to expand their operations while keeping dispatch centralized and cost low.

One company, Las Vegas/Los Angeles Express of Ontario, Calif., faced skyrocketing fuel costs and soaring overhead. They were struggling to find a way to increase efficiency while improving profit margins. IT Manager Tim Bednarczyk realized that automating dispatch and routing was the answer. "We implemented a real-time, optimized routing, delivery, and dispatch system, and it saved us fifteen percent of our fuel costs almost immediately while greatly improving service delivery," said Bednarczyk.

Ward Trucking, an LTL company headquartered in Altoona, PA, turned to wireless technology to streamline their operations. After evaluating their current operations, Ward realized that real-time automation would lead to increased productivity and therefore greater profitability. However, the company lacked the technology infrastructure most vendors required to implement a route optimization and dynamic dispatch system.

Instead of purchasing software and hiring an expensive technical staff, they decided on the SaaS (Software as a Service) model, providing access to a real-time logistics services over a secure Internet connection. The approach provided Ward with easy IT implementation and a rapid return on investment, saving the company a million dollars a year in fuel costs alone.

Another logistics transportation company, this time located in the heart of the Midwest, at one time required ten dispatchers and several coordinators to manage just 3,000 deliveries. Simply put, the manual system was not efficient. By implementing a sophisticated real-time logistics solution for routing, dispatch, and delivery, the company reduced their dispatchers to five and increased their delivery capacity to over 7,000 deliveries.

About the Author: Stephan Karczag is Vice President of Cheetah Software Systems, Inc. of Westlake Village, California.