In an industry built around mobility, when speed on the front end pays off on the back end, the rapid development of mobile technology makes it more important than ever for freight transportation to adapt and evolve. GPS, onboard computers and other in-cab devices critical for safety, security, compliance and cost control are rapidly going from state-of-the art necessities to mere supplements, at best, to the smartphones and tablets that can provide all those previous services and more.
For smaller motor carriers and owner-operators for which cash is king, those mobile devices and the applications tied to them can help them compete against much larger truckers by expediting freight payments and tying in audit and payment with back-end analytics for network planning and strategy.
Mobile technology has passed the tipping point in fright transportation. It has matured and achieved a critical mass of acceptance, as carriers and shippers start to reap the benefits of enhanced connectivity. “With the knowledge we’ve gained and the right tools in place, we can enable virtually any fleet to take advantage of the ‘continuous’ connection” paradigm, said Mike Mulqueen, senior director of product management for Manhattan Associates, a global supply chain technology company.
A new era of streamlined freight payments could be dawning, given carriers’ widespread adoption of mobile technologies. A recent Aberdeen Group study found 86 percent of truck drivers own mobile devices, with 44 percent owning a smartphone. According to a survey by uShip.com, 70 percent of drivers use mobile phones for business, while about 36 percent use the devices to book and bid on loads.
More than half of the truck drivers surveyed by uShip.com said their smartphone could or already has replaced dash-mounted GPS-based navigation equipment. Twenty percent said they no longer travel with a laptop.
Mobile billing applications are mainly used by carriers, not freight audit and payment companies, because the latter sit at the back end of the transportation loop and rely on EDI transmissions from carriers. That’s not to say freight payers aren’t benefiting from the rapid verification and improved accuracy in invoicing and billing enabled by mobile technologies, said Tom Zygmunt, marketing manager at Cass Information Systems, a global provider of
expense management solutions and one
of the world’s biggest freight payers.
“We are in the back office, but we may be seeing some of the benefits of mobile apps,” he said.
Faster transmission of freight data from drivers via a mobile device can improve the freight audit process. Exceptions can be researched more thoroughly and billing errors reduced by automating more audit controls and rules.
Mobile technologies are also valuable in helping to automate the freight payment process. Cass is well on the way to a paperless environment, with a 100 percent electronic-processing rate in its parcel business with FedEx and UPS, Zygmunt said.
Faster payments contribute to operational efficiency, given the need for speed and agility by logistics providers. With companies holding less inventory, third-party logistics providers must be able to react quickly, and mobile technologies enable faster shipments and data transmission, said Robert Nathan, co-founder of Load Delivered Logistics, a Chicago-based technology-enabled 3PL.
Faster payments also could entice more drivers to enter the industry and stay on the road, perhaps helping to avert the impending driver shortage. “North American drivers need cash to keep running,” Nathan said. “If we pay them faster, it will have a positive impact on the logistics community and the economy.”
Load Delivered’s mobile app, Load Finder, provides drivers with access to all available shipments and filters load data from current or desired locations. The app eventually could play a role in freight payment, perhaps triggering payment upon proof of delivery.
By feeding shipment data directly into back-end analytics tools, mobile apps can contribute to strategic planning. “Transactional data is extremely rich and important,” Nathan said. “When people talk about big data, what better place to use it than to understand the costs of the transportation of goods.”
With freight payment capabilities, Load Finder eventually could work like smartphone apps that allow users to book taxis or limos, provide pickup locations and arrival times, bill charges to credit cards and provide detailed receipts.
Broader adoption of mobile technologies could increase the competitive advantages that Nathan believes 3PLs enjoy over freight audit and payment companies, which he describes as just an extra layer between shippers and carriers. 3PLs are part of transactions rather than a step removed. “Auditing bills from carriers is just part of our service, not something extra,” he said.
Cash-strapped small carriers and owner-operators have historically been slow to adopt new technologies. About 25 percent of Load Delivered’s carriers submit invoices through mobile devices.
Less than half of freight payment data currently available over the Internet is available via mobile device, but the volume is growing rapidly, said Alan Miner, president of Cleveland-based freight audit and payment company CT Logistics.
The company is in the process of deploying a mobile app that will incorporate its FreitRater service, which provides shippers and carriers with estimates of freight bills. “It will provide ratings and routings by all modes and carriers so we can give clients accurate quotes right at the point of sale,” Miner said.
CT Logistics is deploying the app’s capabilities in stages. Functions for transmitting and recording payment and pricing data could be introduced this year, along with routing and optimization.
On Jan. 29, Eden Prairie, Minn.-based technology company XRS rolled out a platform that can run on more than 50 types of mobile devices. The platform automatically transmits vehicle and operator data directly to a management dashboard, enabling drivers to comply with the new MAP-21 mandate for recording hours-of-service.
The beauty of a bring-your-own device platform such as XRS is that it allows users to share the benefits of mobile tracking, compliance and performance data simply and efficiently, and across any platform, said Christian Schenk, XRS’s senior vice president of strategy and market growth. “Whether you’re using fleet-purchased tablets or driver-owned devices, the most important thing is capturing the data in the most affordable and convenient way, and then sharing and analyzing the information,” he said.
Unlike bulky onboard systems that require custom hard-wiring and frequent hardware changes, XRS gets drivers on the road faster and pays for itself through reduced fuel consumption, better driver and vehicle utilization, and accident reduction.
Reducing detention times is a big part of the mobile value equation. “Every day we see shippers unable to unload carriers fast enough,” said Ryan Barnett, XRS’s director of marketing. “Mobile (technology) can be used to alert companies that the truck is on its way.”
An advantage of the XRS platform and mobile technology in general is the high adoption rate by small trucking companies and owner-operators that couldn’t previously afford onboard computers. The platform reduces the problems of obsolescence associated with those types of systems and the expensive installations and hardware they require.
Transplace, a provider of transportation management services and logistics technology, wears several hats in the freight audit and payment business. As a 3PL, the company makes payments directly to carriers, and as a truck broker it collects payments from shippers.
At this point, mobile apps are a solution for small carriers. The major carriers don’t need them for payment purposes. They don’t want their drivers exchanging paperwork to third parties, or third parties making payments to their drivers, said Tom Sanderson, president and CEO of Transplace.
Mobile devices have great potential for streamlining payments to owner-operators and small fleet managers. They can be used to forward money for fuel and maintenance costs, which is currently done through payment service providers.
Although there are challenges in scanning and sending complex documents such as bills of lading, the benefits of enhanced visibility in small carrier shipments are too good to ignore. Transplace is in the early stages of incorporating mobile technologies into its multifaceted transportation and logistics businesses, but it’s already clear that mobile-enabled payments have great potential in a trucking industry that relies on cash flow.
“Mobile apps offer tremendous potential benefits in allowing smaller carriers to compete,” Sanderson said. “Shippers demand visibility, and that can be harder to get with smaller carriers.”
There are challenges. Does the driver know which load is moving, so it can be synched via mobile device with a transportation management system? There may be privacy issues with cell phone tracking. Some drivers aren’t pleased with electronic onboard recorder mandates and may not want their cell phones to function as tracking devices.
One way to encourage broader use of mobile devices for tracking and other business applications is to provide incentives such as faster payments and cash advances. At some point, photo images of bills of lading and geographic confirmation that a shipment has been delivered to the consignee could trigger the release of funds. “Faster payments are on the radar, possibly as early as 2013,” Sanderson said.
Mobile technologies can play a role in resolving billing disputes by capturing digital images of receipts and bills of lading. The frequency of disputes over assessorial changes such as detention or waiting times can be mitigated through time stamping and location information captured by smartphones.
Mobile access to Web portals also can speed up resolution of rating errors and mileage discrepancies.
Contact David Biederman at email@example.com.