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Harvey Donaldson, Director of The Logistics Institute at Georgia Tech, commented, ``The U.S. trucking market grew to nearly $500 billion in 2000, representing more than half of total logistics spending and nearly 5% of the U.S. economy. Yet, while trucks are so essential to many enterprises, moving more than 80% of the country's freight, the trucking industry is rife with inefficiencies. Today, with a slowing economy, companies must find ways to trim transportation costs, while increasing service levels. There's an enormous opportunity for companies to improve operations if they have the tools they need to address the shortfalls in planning and execution. auto insurance quote online Tens of billions of dollars can be saved across the industry.''
The majority of the more than 3 million trucks operating in the U.S. are part of large and complex supply chain operations. Virtually every fleet, regardless of size, wastes time and money as a result of inefficient operations. Common problems faced by businesses operating truck fleets include:
Excess miles traveled. Because of the difficulty of local and long-haul loading and routing decisions, many trips are not optimally planned, resulting in extra miles run by trucks and drivers. This is especially true for trucks that make multiple stops. Excess miles translate into additional costs associated with driver pay, equipment, fuel, tires, maintenance, etc.
Wasted capacity. auto insurance quote online Many trucks have additional space onboard for all or part of each trip. In many cases, trucks are completely empty during the return (or ``backhaul'') portion of their routes. As a result of this wasted capacity, many trucks run inefficient routes, and many companies operate more trucks than necessary. With the average annual cost of running each truck topping $100,000, eliminating just a few such unnecessary trucks can result in significant cost savings.
Poor service. Inadequate planning often results in poor delivery service. For example, trucks often arrive at their destinations at the wrong time, wasting valuable hours and complicating the delivery process for all parties. auto insurance quote online Service issues are becoming increasingly important as modern firms must maintain small, just-in-time inventories to be competitive, while also coordinating with their suppliers, distributors and customers. To survive and succeed, today's businesses must find new ways to reduce their transportation costs, and simultaneously provide higher levels of shipment service.
Lack of control. Due to the decentralized and people-intensive nature of most supply chain processes, management often has minimal control over day-to-day trucking operations and has very little information on asset cost or performance. Without this insight, corporate leaders find it difficult to make changes and improvements to this key part of their business. auto insurance quote online With recent demand for increased security measures, especially in large cities, managing everyday delays and changes has become essential. The inability of managers to quickly and effectively respond to customer demands, and to adapt to broader business and technology changes, impacts the performance of their entire businesses.
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