It's hard enough to manage a private fleet these days, with fuel costs soaring and drivers in short supply. Now private fleet managers are being asked to take on an additional task: orchestrating complex transportation solutions involving company-owned fleets, third-party contract carriage, and for-hire carriers.
Called "collaborative logistics," these initiatives are designed to provide companies with the best overall mix of cost effectiveness and customer service. And they go well beyond the traditional search for backhauls, says Garry Petty, president and CEO of the National Private Truck Council (NPTC). Petty describes collaborative logistics as more of a matrix that integrates the various components of transportation into an integrated whole.
What does that mean for fleet managers? The short answer is additional responsibility. Under a collaborative logistics strategy, the fleet manager is responsible for developing the right mix, making the company's equipment and service requirements clear to third parties, and monitoring the performance of contract and for-hire carriers to make sure they adhere to the private fleet's standards. "It's almost like fleet managers are symphony conductors, orchestrating the best transportation solution," notes Tom Moore, NPTC's vice president of public affairs.
The NPTC is doing a couple of things to help its members cope with the new demands. First, it has organized an educational session that will address some of the challenges involved. Titled "Collaborative Logistics and the Private Fleet— It's Not Just About Backhaul Anymore!," the program will be presented at the group's annual meeting, which takes place from April 29 to May 1 at the Indiana Convention Center in Indianapolis.
The NPTC is also launching a new service for members seeking outside partners for some of their transportation needs or looking to offer their own services to others. Called Member Match, it is essentially an online clearinghouse to help members match available capacity with other members' transportation requirements. Petty expects that private fleet managers will embrace the service because of the confidence they have in their peers' high standards for drivers, equipment, and customer service. And there should be ample capacity: The group's most recent benchmarking survey shows that fleets average about 25 percent of their miles running empty.
The fleet's growing reach
In fact, Petty says that kind of collaboration is already starting to happen. He estimates that 40 percent of NPTC members make use of dedicated contract carriage to some extent.
Dave Belter, group director of transportation management for Ryder, confirms that his company is seeing more requests for dedicated contract carriage and says it stands ready to meet those demands. "It all starts with logistics engineering," he says. "When we look at transportation management, we look across a customer's portfolio—his DCs, private fleet, contract carriage, maybe a combination of both."
Moore believes the new emphasis on outside service is partly a reflection of a changing business environment. "In the past, there used to be more competition," he says. "Now, there's more synergy. You walk into a fleet operation, and the dispatcher for the dedicated carrier sits next to the dispatcher for the private fleet. It is critical to their success that they blend in the different elements."
Still, that's not to suggest that private fleets are being phased out. Petty reports that as a result of a capacity crunch in the truckload sector in recent years (capacity did loosen up a bit last year), some companies that had been considering abandoning their private fleets have instead strengthened them. In many cases, he says, the crisis made them realize how heavily they rely on fast, dependable transportation service. "Getting product to market is as important to shareholder value as the product itself," he says.
All things to all people
Results of the group's most recent benchmarking survey bear Petty's observations out. In fact, a full 85 percent of the respondents to the NPTC's 2006 benchmarking survey say they expect their private fleets to handle more freight—not less—in coming years.
At the same time, it appears they're expanding their activities well beyond their traditional function of hauling outbound freight. The benchmarking survey indicates that while moving outbound freight remains the fleets' primary role, a majority of respondents also use their fleets for interplant movements and to move goods from plant to DC.
But they aren't necessarily doing it alone, says Olen Hunter, director of sales for Paccar Leasing Co., which operates 30,000 vehicles—primarily for private fleets—in the United States and Canada. Though he acknowledges that plenty of companies expanded their private fleets during the capacity crunch, he says the trend has started to taper off. "We're seeing a little bit of a change in the business right now while trucking tonnage is down," he says. With for-hire carriers willing to take on more business, he adds, private fleet managers are not making significant expansions to their fleets.
Hunter also notes that recent regulatory changes have given Paccar's business a boost. He points to new environmental rules affecting truck engines (which took effect in January) as an example."Our customers are saying they need to have truck fleets to serve internal or external functions, but they do not want to be in the business of hiring and training technicians, buying tools, or EPA compliance," he says. Belter sees another explanation as well.With a private fleet, he says, "you want to drive utilization to 85 percent if you can.Where you cannot get that, you can start to balance the cost and service tradeoff with a for-hire solution."
Belter notes that in some cases, these collaborative solutions go well beyond filling the transportation gaps to include areas like reverse logistics and even network design. He cites the case of a consumer products company that developed a solution that involved for-hire inbound transportation, a DC with a cross dock operation, and dedicated carriage for delivery to customers. The key to the arrangement was the establishment of the DC, he says."The enabling component was being able to establish a physical facility to flow product across."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.