The commercial trucking industry gets more competitive every year. Today, fleets of all sizes are dealing with rising costs of carrying inventory, heavier government regulations and challenges from a profusion of disruptors. These forces, combined with complex road networks and greater expectations from customers, are squeezing carriers in a field where the profit margins are already thin.
To stay competitive in this tough environment, fleets have to do everything they can to keep up. The increasing demand on cost-cutting measures, without interrupting customer service across distribution, has made just in time delivery a critically important part of decreasing overall holding costs. ETAs impact the entire distribution network. In a retail environment example, not having an accurate ETA (or late load) produces a waterfall effect that impacts the rest of the distribution network: Receiving, Shipping, and Transportation.
Receiving Department:
If an expected load is delayed, then the distribution center has to send employees home early or have them stay late. Cutting hours has a significant impact on employees and can lead to a higher rate of turnover. Conversely, holding employees impacts overall costs because of increased overtime wages and lower productivity. This is a big problem in a market that already is remarkably short on available drivers
Shipping Department:
If an expected load is late and planned goods for shipping are not available, that can impact the shipping department, just like it does the receiving—higher turnover, lower employee satisfaction, and productivity, and more money spent on overtime. If the end store location is receiving once-a-week deliveries, then there are also holding costs associated with having to store the inventory for longer than expected.
Labor in shipping and receiving are planned around ETAs. Getting behind on one day can affect the entire work week. This also works in reverse if a shipment arrives before the planned time and product is ready with no one scheduled to receive it.
Transportation:
ETAs are crucial for appointment-based deliveries. Arriving before an appointment results in detention time, while missing a delivery window can result in a layover to the next day for a driver. The delay or layover could be even longer with large customers that have little to no leeway in accepting unplanned deliveries.
Trucks are typically cubed out, which means per-case costs get passed down to the end locations, like retail stores. Cost-per-case has increased because trucks are shipping at less than capacity, which means costs are increasing for stores and profit centers. If those goods are not available to ship, the fleet has to operate more trucks and drive more loads than are necessary. Not only does that increase costs, but it also means the goods a retailer was counting on are not available for sale, thus impacting the availability for the end customer.
Communication is key. ETAs are an extremely valuable and integral part of keeping a transportation network running smoothly from end-to-end. However, without a communication tool for relaying information, they can’t be used effectively. Advance knowledge about a shipment that is arriving early or that is running behind schedule can help shipping and receiving departments adjust labor schedules. If an ETA is communicated to the right audience with enough lead time, appointments may be rescheduled in order to eliminate detention and layover charges.
An inaccurate ETA has a ripple effect. By investing in the technology and processes that ensure ETAs are as accurate as possible, fleets can weed out inefficiencies, use their resources better, keep their drivers happy, and deliver the best service to their customers.
