Using technology to improve service reliability, asset turnover and profitability
Carriers irrespective of being asset-lite or asset-heavy, need to plan and manage resources such as vehicles, drivers and working capital to ensure maximum asset turnover and return on working capital employed. Reliability of service is fast becoming a baser requirement with shippers requiring full visibility of trips at each stage of execution. Carriers also need to plan in a forward manner to take advantage of the seasonal requirements of various industries they serve. Changing operating models of shippers means carriers have to innovate and offer flexible services. Here , lack of deep insights into trip , lane or account level profitability translates to sub-optimal pricing decisions.
The biggest challenge is in financial reconciliation where typical conflict areas of TAT, detention and regulatory violations due to lack of visibility into trip events and driving behaviours lead to mounting unpaid invoices and poor cash to cash cycles for carriers.
Improving vehicle & driver management
The biggest challenge during trip execution is vehicle and driver availability.
Locating and assigning drivers to trips, maintaining vehicle fitness with supporting documents make the manual processes highly cumbersome and unstructured leading to delays, vehicle / driver rejections at pick-up locations.
Using a mobile application for on-boarding of drivers, managing vehicle and driver assignments , monitoring trip execution and ETA updates gives greater control to the carriers to utilize resources in the best possible manner.
Developing insights into profitability
Carriers engage with shippers in various type of contracts for different lanes and different requirements. The complexity arises in allocating the accounts receivables against the accounts payables which are typically not a straight head to head mapping.
The average profitability varies across lanes and carriers lacking insights into margins may be losing money on certain lanes with fluctuating average margins. In a high volume , low margin business – it becomes extremely important to have the right insights in lane level performance to review pricing strategies taking shipper and competitive considerations into account.
One platform for carriers & shippers
Carriers would have to get on-boarded onto multiple shippers’ systems which is both time consuming and costly since carriers would have to use multiple suppliers’ systems.
A relook at this approach would involve on-boarding shippers and carriers onto one platform so that exchanging information between these entities is just a matter of contract finalization and the platform would ensure planning and execution as per contractual obligations.
Both shippers and carriers would benefit greatly by expanding their respective networks. For carriers, it becomes an even stronger case with full visibility to on trip events – single source of truth for all stakeholders. Workflows to review / approve invoices with modifications would reduce reconciliation delays and lead to faster payments.
Improving asset turnovers
Carriers are constantly looking at opportunities to maximize asset turnover – vehicles on the road for shippers. Carriers need to take a consolidated view of their shippers’ requirements across pick-up and delivery locations during the planning rather than having a siloed approach for each shipper account and looking for opportunities in return / onward journeys in an unstructured manner.
Introduction of precision in carriers’ planning can help them schedule trips, trucks and drivers appropriately. They can also take advantage of relay driving opportunities with appropriate zonal / return points for drivers so that drivers are back to base locations faster.
This has a dual impact of better value addition to shippers and willingness from drivers to work with the carriers.
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