Over the past decade, business as a service (aaS) models have infiltrated supply chain players to move the industry forward to adapt to increasingly focused lifestyles. on technology.
Software as a Service (SaaS) has targeted shippers around the world, promising a simpler way to manage internal procurement and transportation workflows, and providing a layer of resiliency when unforeseen obstacles arise.
SaaS solutions have also been promoted in the freight brokerage space, ultimately fueling the rise of the digital freight broker.
These aaS technologies have become more attractive as companies realize the amount of waste lurking in their old manual business models. They no longer see it as cutting-edge technology, but as table stakes necessary to remain competitive.
Now the trucking companies are starting to follow suit.
They have historically relied on the advantage of their greatest business asset, the wheels on the ground.
With an unprecedented level of available freight, carriers are discovering that one truck is not enough to build customer loyalty.
Their product is no longer a truck, but the supply to meet customer demand today and tomorrow.
Capacity-as-a-Service sales model
Capacity as a Service (CaaS) is a business methodology in which carriers use their trucks to sell an outcome, and in transportation, that outcome is a positive shipping experience from pickup to transit to delivery to time. It can also mean adding other services to meet customer demands.
This servitization of the trucking industry means that carriers must have better transparency of their available equipment in order to add new sources of revenue, including warehousing, maintaining environmental, social and governance (ESG) requirements and offering last mile delivery services.
Carriers find that the best way to manage these new demands is to invest in technology that will improve their operations to meet the potential needs of their customers. Operations upgrades can include vehicle telematics, blockchain technology, digital freight brokerage integrations, and trucking optimization platforms.
JB Hunt Transportation Service Inc. (NASDAQ: JBHT) is an example of a company that has been working towards this goal over the past decade.
At the FreightWaves LIVE @HOME event in 2020, CEO John Roberts III discussed the service need behind the adaptation of the company’s platform, JB Hunt 360.
âWe started talking about a modernization and it evolved – the conversation started on, what else could we do if we had more bandwidth, flexibility and access, and what would be- are we able to do for our customers and our employees with more data? said Roberts.
âMuch of what we had done up until then had been more rigid, more analytical, more technical – pricing is a science, the use of equipment is based entirely on industrial engineering – and now we are going to try things we wouldn’t do. Letâs not let ourselves be tried beforehand, âhe said.
The work JB Hunt has done to digitize their processes has allowed the company to continue creating value-added tools to enter new verticals, including the recent addition of temperature-controlled transportation available through its Shipper platform. 360.
âJB Hunt 360 has opened up the market for shippers and carriers to connect, and we continue to expand it by bringing new solutions, such as temperature controlled, into the platform,â said Commercial Director Shelley Simpson . âShipper 360, in particular, enables businesses of all sizes to be more responsive in today’s dynamic freight market and meet their capacity needs with the right truck at the right time.
While JB Hunt has the resources to attack these initiatives internally, trucking companies are turning to integrated logistics platforms to help diversify their existing services.
Harismran Singh, CEO of Gillson Trucking, recently integrated all of their trucking management programs into one platform, LoadStop’s SmartTMS. The Transportation Management System is designed to facilitate the workflows and operations of a trucking company.
The integration of all operations on a single platform has enabled its dispatchers to optimize current capacity and meet customer pricing expectations.
âCustomers like to trust the carrier so that they can trust the carrier for the volume they have committed and trust [rates] will not fluctuate during market fluctuations, âSingh said.
Trucking companies are also integrating with other platforms to add new services to their current offerings.
Andrus Transportation Service, a Utah-based trucking company, recently partnered with Baton last mile logistics platform.
Not only has this partnership reduced the average wait time for its fleet and added more capacity for the long-haul operations of the trucking company, the partnership has enabled Andrus to offer efficient services on the last kilometer to its customers.
During FreightWaves LIVE @HOME, Andrew Berberick, Co-Founder of Baton, explained how the company is leveraging freight from multiple trucking companies to eventually create more locations that those same companies can use to sell services on the last mile.
âEach of our clients actually has a local relay operation somewhere,â he said. âThe problem is, to operate a local relay, you need sufficient volume and density to maintain a local fleet in use. Because we are an aggregator, we can combine freight between multiple carriers to give them that advantage of economies of scale. â¦ We can open new locations that neither of them could have opened without the other.
Legacy visibility software solutions see this increase in technology investments and the creation of new products customized for the carrier experience.
Descartes Macropoint (NASDAQ: DSGX), a leader in supply chain visibility, whose MacroPoint for Truckers mobile app recently surpassed one million unique drivers, plans to release a set of improvements this summer that will enable drivers to receive charging offers directly on the mobile app.
âThe mobile app will give owner operators the ability to choose to receive cargo offers, matched with artificial intelligence, to their ideal freight markets,â Dan Cicerchi, general manager and vice president of Transportation told FreightWaves. Management Solutions. âCarriers are starting to use our solution to really seize their own opportunities and become more independent in managing their freight. “
Access to these tools allows a carrier to undertake new business, knowing that it will be able to find freight for return journeys and add capacity outside its fleet with partners already in operation. trust.
Energy Transportation Group, an asset-based 3PL, recently announced it is using the Descartes Macropoint solution to improve capacity matching, carrier compliance, and track deliveries to customers in industries ranging from food and beverage emergency supplies.
As trucking companies transform their technology suites to move towards servitization, they are seeing positive results in other areas of their business, including safety, training and retention.
Recently, A&R Logistics announced that it has started using Idelic’s Safety Suite, a comprehensive platform that integrates fleet data in one place.
The integration allows A&R Logistics to manage its growing capacity, as it recently acquired First Choice Logistics, LT Harnett Trucking and Luckey Trucking to expand its customer service offerings.
While the tool helps consolidate the fleet of nearly 1,000 drivers, the telematics data allows them to develop and train drivers, which can help with driver retention and recruitment.
âI truly believe that every driver wants to be the best driver,â said Dionne Quiachon, environmental, health, safety and security manager at A&R. âWith this system, we can help them do it. We can show them, “Here is where you are doing really well and here are your areas of opportunity to improve.” [With Safety Suite] we can coach them, we can teach them and we can train them, and it’s all documented in the system.
These trucking investment trends are also not going unnoticed by their suppliers.
A recent survey by the IBM Institute for Business Value (NYSE: IBM) found that 64% of truck manufacturing executives said the future of their organization depended on their ability to provide service to their fleet customers, known as Truck-as-a-Service.
For example, the Volvo Group currently uses IBM Hybrid Cloud to schedule required maintenance on a truck while it is en route for repair. The survey found that this reduced diagnostic time by 70% and repair time by 20%, giving Volvo truck users a competitive advantage over their competitors.
The study found that by 2030, $ 465 billion in annual revenue will likely shift from sales to services that will include integrated fleet management tools, intelligent automation, data security and privacy, and enhanced functionality. for the driver.
Truck makers predict that $ 118 billion will be spent just on training trucking companies and developing their employees to handle technological advancements added to trucks.
With all of this revenue up for grabs, it is only a matter of time before the aaS model breaks through all pillars of the supply chain.
Source: Freight Waves