Dave Wangler, President of TMW, kicked off TransForum to a record crowd of transportation professionals and painted the picture of today’s and tomorrow’s transportation challenges: The industry is being impacted by more tonnage, more growth for carriers, and the changing dynamics of distribution.
TMW has been changing to reflect the market in which they operate. Now owned by Trimble, there is substantial capital to develop the solutions, make acquisitions, and take advantage of other acquisitions that Trimble has made such as the widely used ALK products (PC Miler, PeopleNet and more).
Within Dave’s talk we more than detected the quest for ‘world domination’ with statements that TMW wants to “own the TMS market.” And although they own many valuable solutions such as TMWSuite, TruckMate, TL2000, Appian and others, it is still a very competitive market. However, if the size of the audience you can pack into a conference is any indication of presence, TMW has no rival in TMS. TMW has strong presence in the ‘asset-based world,’ but Dave said they are fine tuning the way they look at markets—LTL vs. TL and asset as well as asset-free business models. The broker market is huge, as is the owner-operator market in which there are many organizations that have yet to upgrade or make an original TMS purchase. Many product enhancements that TMW announced reflected this broader view of the market.
The conference also reflected the trucking industry’s array of state-of-the-art technologies such as telematics, rating, track and trace, mapping/locating, driver/labor management software, etc., with dozens of partners such as Omnitracs, SkyBitz, SMC3, Truckstop.com, and many software and telematics companies who provide a range of technologies required to operate today’s high tech trucks.
Changing Face of Logistics
Several of the topics discussed by presenters (myself included) focused on the changes in the economy, the changes in customers’ outlooks and requirements, and the new workers. TMW surveys their customers each year on their challenges and plans. Hiring and retaining workers (see Figure 1) is at the top of the list.
Figure 1: Driver Retention
This is all occurring just as the US is having the most stable growth and shifting most of that impact to the Logistics industry. Logistics conferences love to have economists talk about these topics since the increasing population means moving more commodities to more production centers for subsequent shipment to customers. All great fodder for growing logistics companies. John Larkin, Managing Director of Stifel, presented a picture that had several important facts and recommendations for logistics managers to consider. One fact is that the number of available drivers is decreasing (see Figure 2). There are many reasons for this, including pay. John compared a driver’s average pay of $42K with the $53K average pay of the American worker and suggested that logistics companies would have to face substantial pay increases.1
But there is more. He noted that this pay increase did not help to increase hiring, but did help with turnover. My contention is that the industry has made little—really no—effort to market this as a career choice. I say this sadly, since there is work available and the US has a huge number of people who need work—or more stable paychecks.
Figure 2: Driver Demand vs. Supply
Another key issue for drivers is home time. Here is where logistics technology and strategy can play a great role in change. Some slight changes in distribution networks along with route optimization can make travel easier for drivers. In fact, with increasing regionalization, this could occur for many drivers, essentially giving them day jobs. This will be critical in addressing other issues associated with driver health and safety. It was interesting to see TMW focus some of their analytics on these very issues—very people-centered and worthy of calling out here, especially in an industry where we talk too much about business metrics and asset utilization, and scant attention is paid to the people. That will have to change.
Dave Wangler spent time in his keynote and breakout discussing the many plans and updates for TMW.
The more interesting of their plans were the analytics improvements. There are two views for looking at this:
Firstly, providing relevant operation analytics gives logistics managers methods to better manage fuel usage, truck maintenance schedules, routes, and on-time performance. Other important metrics look at driver hours and miles and support better work schedules and other benefits for drivers to ensure a fair work balance, time off, and so on (see Figure 3).
Another view is the pooling of information to create benchmark data to help organizations understand and plan their business more effectively. Emerging benchmarking metrics are one of the hottest trends in the industry right now.2
Figure 3: TMW Analytics
Container tracking is a critical requirement for today’s shippers and intermodal carriers who have to fine tune schedules to make pickups and drops. Capturing and creating accurate schedules and also reporting the interchanges to trading partners so that drivers can validate these events has not been easy. Moving from reliance on manual approaches often means that systems are not updated until the end of day, thus preventing visibility for subsequent processes or providing clarity to shippers. Timely, accurate data capture not only means everyone’s system gets updated, but also that carriers can be paid in a timely way—a sure justification for automation.
Reefer management is also a key feature added to ensure that goods arrive without spoilage. This is not only sensors and control, but integration to mapping/locating systems which provide the where and when, so that corrections can be made.
Other TMW Moves—3Gtms Integration
Another interesting element of our industry is the ongoing integration between partners to fill out applications. In a move that could signal additional strategic investments,3 TMW has integrated the quoting, rating, and contracting functionality of 3Gtms. This provides both the buy and sell views which is a value function for carriers, since they often partner to complete the journey. Rapid quoting means the difference, often, between winning and losing deals, so having a clean, modern web-based approach that works for the complex set of partnerships within the total route can help win business and also maintain the financial data required for subsequent settlement.
Conclusion—Changing Models for Carriers
The theme of ‘Now’—do it now—was a constant throughout the conference. And talking to many carriers, it was clear that they know change is required. It is a tough business to be in. Fresh ideas emerge as managers break away from their daily operational burdens and attend conferences. However, they often still stick to the same tracks and don’t break out of pedantic industry minutia to step back and connect the dots. The agenda for TransForum definitely tried to make the case to their customers to do exactly that. It will be interesting, over time, to see how these new ideas stick.
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