Will the IoT Save Trucking Companies Money in the Long Term?

Will the IoT Save Trucking Companies Money in the Long Term?

Accutrac Capital 14-Mar-2018 0 Comments

The trucking industry has been notoriously slow in as far as incorporating technology into the various aspects of the business. But a new era in freight transportation has dawned already, and as we have stated previously in Embracing Technology to Survive and Prosper, fleet companies will have to stay ahead of competition, comply with newly mandated regulations, and manage rising operating costs.

To do all three, fleet companies will have to start embracing technology, and one innovation that they will need to invest in is the Internet of Things (IoT). Fleet companies will want to be a lot more proactive with the IoT rather than reactive for one simple reason: taking advantage of it will save them money, especially in the long term.

The IoT can already help trucking companies save money on maintenance costs, as sensors embedded in each truck can send vital performance-related information to maintenance crews. In other words, the IoT will help identify possible areas of concern before they become full-blown problems and render a truck out of commission for days, may be even weeks. Finding the damage early will save money, as it will prevent further problems caused by the defective part/s.

IoT-enabled sensors can also help drivers and fleet companies determine the most fuel-efficient driving techniques, like how to properly brake and the optimum speed to maintain on the road. For proof that the IoT works in this regard, look no further than Saia LTL Freight Inc. which installed sensors in each of their trucks in 2015. The sensors, according Saia VP Brian Balius, helped improve fuel efficiency by 6%, saving the fleet of over 3,000 trucks roughly $15 million in its first year of integration.

Moreover, the IoT can help fleet companies determine the best possible route for any given trip even before the truck is sent out. In doing so, less fuel will be used, travel time will be shortened, and service time rendered by drivers will be cut considerably. All these, of course, will translate to savings for the company. The IoT can also help drivers avoid congested roads or areas slowed down by traffic, by an accident, or by an unexpected event like a parade or rally. Fleet companies working with perishables will also benefit greatly from the IoT, as sensor-enabled trucks will be better monitored and guided accordingly in case a problem arises.

The IoT will also improve road safety. Recent data culled by an accident-monitoring agency show that driver fatigue causes about 30% of all road accidents involving commercial vehicles. Such mishaps can be extremely costly for trucking companies, who have to fork out considerable sums for accident related issues. Medical assistance (for the driver or anyone else involved), repairs (for the damaged truck and other properties, if any), and fines are among the costly repercussions. With the installation of IoT-synced Electronic Logging Devices (ELDs) now mandated by the Federal Motor Carrier Safety Administration, driver fatigue will diminish as a cause of concern. The ELD devices according to Fleetmatics, will automate the recording of important driver data, including their Hours of Service (HoS), and render paperwork obsolete. Moreover, this automated record-tracking system is near impossible to beat, making it easier for commercial truck operators to better monitor the HoS of each of their drivers. With the service hours of drivers accounted for in real time, instances of exhausted drivers remaining behind the wheel will be avoided, and this in turn will help limit accidents caused by fatigue. Fewer accidents, therefore, mean less unnecessary expenses.

The money saving benefits and improved efficiencies of integrating IoT technologies is undeniable. The challenge of managing the procurement of technological advancements comes down to affordability and cash flow. Affordability is a moot point; trucking companies must engage with emerging technologies or lose competitive edge. Freight carriers cant afford not to buy in. Having the financial resources to permit such expenditures is vital to sustainability. In this industry of slim margins, slow paying customers and restrictive bank covenants, accessing the needed working capital to permit such expenditures is a severe challenge. Freight factoring has become a mainstream financial strategy for trucking companies to maintain positive cash flow. By receiving advance payment on invoices due (usually within 24 hours), trucking companies gain immediate access to the funds needed to support fleet operations and afford infrastructure improvements.

The aforementioned ways on how the IoT can help trucking companies save money represent only the tip of the iceberg so to speak, as there are many other ways this innovation can be a money saver. Clearly, the time to link up with the IoT is now.

A submission of JVBRoadWork


 

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