Technological progress keeps changing the transportation industry ever more rapidly. The market participants need to become more agile and flexible in order to match the constantly growing market requirements, and this need fuels that progress.
Improvement of traceability and visibility for vehicles and fleets has become an integral part of this progress. Gathering real-time information that you can measure and analyze in a fast and efficient way with custom supply chain software and transportation solutions and act upon is vital for meeting the increasing expectations of customers.
Establishing an efficient vehicle tracking system allows you to make safe predictions on the Estimated Time of Arrival for your vehicles and proactively deal with most transportation problems before they actually happen and harm your business.
In this article, we’re going to take a look at the ways major transportation industry players ensure vehicle traceability for their business and the technologies used for that purpose, IoT-based Transportation Management Systems in particular.
The transportation process without visibility becomes messy, and this scales with the size of your business, growing exponentially. Lack of transparency can quickly become a downfall for mid to large transportation companies and harm their customers’ experience and business reputation irrevocably. Let’s check one such example.
The Suez Canal incident
The Suez Canal obstruction incident is a great example of dangers that await any company with a lack of visibility and control of their vehicles.
In March 2021, the Suez Canal was blocked for six days by the container ship Ever Given stranded between the shores. The blockage brought major losses to one of the most important maritime waterways in the world, never mind to the Ever Given operators themselves and all the ships that awaited their turn to cross the Canal. The Suez Canal Authority (SCA) has calculated its losses at $15 million a day in transit fees; Lloyd’s list estimated each day’s lost Canal traffic worth $9 billion.
The investigation revealed that the ship’s captain had made a mistake when entering the Canal, improperly increasing the vehicle’s speed. Shoei Kisen Kaisha, owners of the Ever Given, faced a $916 million claim from SCA (later changed to $600 million).
This example shows that the transportation stage might be the most vulnerable part of the supply chain. It is really hard to ensure the safety of products without effective means of control and monitoring.
The Suez Canal obstruction incident could’ve been avoided altogether with the implementation of an IoT-augmented transport management system with real-time vehicle tracking: sensors that read the ship’s speed and proximity and an automated algorithm that generates instant warnings and sends them to the monitoring personnel.
Let’s take a closer look at the benefits of such a system.
Benefits of real-time vehicle tracking
- Improved productivity. Real-time tracking means you always know if the vehicle that’s supposed to be delivering cargo is actually en route, therefore giving you a lot of control over the driver’s behavior. Besides, you can implement additional features in a TMS, such as digital signature capture and digitized proof-of-delivery forms, making the process of form-filling faster and improving productivity.
- Lower fuel costs. The 2019 Telematics Benchmark Report states that fuel costs are the second-highest expenditure item for transportation enterprises, surpassed only by wages. If a company lacks control over vehicles, fuel costs can get extremely high as a result of unauthorized vehicle use and/or bad driving habits. Real-time vehicle tracking also helps ensure the most fuel-efficient routes by providing monitoring of the driver’s behavior and practices and allowing their improvement.
- Theft countermeasures. The loss of a vehicle and its cargo to malefactors can be devastating for your supply chain and your business reputation. GPS devices installed on your vehicles can help you notice any unusual or unauthorized vehicle activity and discover the position of a vehicle in case it is stolen, minimizing your losses.
- Improved driver and cargo safety. The use of IoT modules allows TMS operators to monitor driver behavior. Accelerometers can send their data to a TMS that analyzes it and makes an automated decision about sending a warning signal to the driver. Such a system can be enhanced with AI-driven cameras, allowing the TMS operator to gather even more information about the driving process and vehicle safety.
Let’s review some real-life examples of these benefits.
W.S. Dennison
W.S. Dennison is a furniture delivery company that operates in the United Kingdom and Ireland. Their operational centers are located in Limerick and Antrim and they use a fleet of 25+ vehicles to deliver to households and businesses.
The company management wanted to improve the fuel efficiency of their fleet and increase customer satisfaction. For this purpose, they have ordered a set of navigation devices, tracking units, and fuel monitoring devices. Office employees now could monitor vehicle movements and analyze the efficiency of drivers’ performance.
The company is now able to prevent unnecessary vehicle damage, keep customers informed about the status of their delivery, and plan fleet routes much more efficiently. W.S. Dennison has also seen a 15 percent decrease in fuel expenses.’
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BLACKBOURNE INTEGRATED M&E
Blackbourne Integrated M&E provides electrical and mechanical contracting services. With more than fifty years of experience, this company has quite a reputation to maintain.
In order to improve the performance of their fleet of 50 vans, Blackbourne has implemented a fleet management system that provides the user with a constant stream of information about each individual vehicle’s location, fuel level, mileage, and history of trips.
Thanks to this upgrade, the company managed to achieve an 8 percent decrease in driving time and an 88 percent decrease in speeding.
The company also places a huge emphasis on transforming its business to be more environmentally friendly. New software helped them to take advantage of more efficient and healthy driving practices, leading to a five percent reduction in the fleet’s CO2 emissions.
Modern vehicle tracking systems depend heavily on the integration of IoT technologies. Let’s take a look at the specifics of IoT integration.
How can IoT technologies improve vehicle tracking?
While installing GPS trackers in your vehicles and equipping your employees with tracking devices can go a long way toward increasing your fleet’s location awareness, IoT implementation can bring your activity to a whole new level. Providing a wide range of data to assigned operators and utilizing a plethora of algorithms and automated responses, an IoT-enhanced TMS is a powerful tool for maximizing a company’s efficiency.
What are the main benefits IoT technologies can bring to a TMS?
Enhanced fleet visibility
- Comprehensive interactive maps with complete information about the fleet: which vehicles are active, what equipment they have, and what cargo they carry
- Information about vehicle statuses from on-board sensors
- Predetermined KPIs for vehicle use, availability, and statuses
Better estimates for time of arrival and decreased downtime
- Preventive diagnostics and timely detection of possible vehicle faults based on data from sensors
- Mobile application for improved visibility with notifications and comprehensive data visualization
- Efficient accident handling due to faster response
- Better relationships with end customers due to upholding estimates and avoiding failures.
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Improved control of vehicle use
- Exact information about the timing of vehicle activity and inactivity leads to fuel cost savings.
- Possibility to limit vehicle use within geofence boundaries
- System of notifications for boundary violations and set activity/inactivity schedule
Deeper supply chain integration
- If other parts of a company’s supply chain, such as warehouses, have integrated IoT elements, your fleet monitoring system can be connected to them, speeding up paperwork and clearances.
- Automated generation of alerts associated with unplanned downtime and vehicle failures
- Creation of reports on such occurrences with all important information presented in a brief and comprehensive manner
- Possible automated sending of reports to predetermined lists of receivers, including responsible company employees and partners
Despite the obvious improvements an IoT-enhanced TMS can provide to vehicle tracking, some enterprises find it difficult to implement such a system, mainly due to the complexity of the implementation process. Let’s go over the implementation steps to determine the most crucial points.
How to integrate an IoT-augmented TMS into your vehicle tracking routine
Before we get to the implementation steps, let’s take a look at the structure and main elements of a TMS.
A TMS consists of four main elements, each with its own set of features:
Freight planning
This element contains a planning tool with access to a list of available vehicles and transport jobs. Its main features are:
- Route and carrier optimization. If the TMS is equipped with an interactive transportation map with a real-time display of active and idle fleet vehicles, the operator can assign new jobs on the fly and plan perfect routes for them, taking into account traffic and other circumstances.
- Performance management. This feature provides available information about vehicle statuses and conditions, presented in a clear and easy-to-read way, along with historical data on fleet performance over a set period of time.
Transportation management
The freight activity management element includes every tool required to establish and officially register transportation:
- Tendering. In order to provide the best possible service for the task at hand, a TMS should include a tool for performing tenders for potential contractors. The tender process can be automated to increase operational speed, or it can be manual to ensure the optimal choice of contractor.
- Contracts. All paperwork required to enter into an official relationship with a contractor is presented here in a digital format.
- Order management. This tool takes incoming requests from clients and contractors and sorts them by various criteria for convenience. It also provides options for quickly replying and assigning jobs.
Execution
- Booking. A TMS can also include a tool intended for booking necessary freights preemptively for the whole transportation route.
- Tracking. Real-time interactive map with all fleet vehicles, their statuses, cargo, responsible persons, equipment, and loadout. It is rarely worth developing your own mapping software for TMS, not with options available on the market.
- Driver communication. Get in touch with drivers in case of emergencies or any changes introduced to the route or the plan.
- Automated in-process rerouting based upon changes in circumstances
Administration
There are additional tools for managing and conducting activities affiliated with the transportation process, such as:
- Payments
- Billing
- Auditing
So, how should the company approach the task of implementing a modern and complex IoT-enhanced TMS? The most important thing here is a thorough understanding of the company’s needs and current situation and taking it into consideration when planning the process of implementation and discussing it with your software development partner.
An upgraded TMS is not a patch intended to fix some separate issue quickly; it’s a foundation stone that the company’s whole workflow is built upon. That is why the planning stage cannot be taken lightly.
Let’s walk through the implementation stages.
1. Defining goals and objectives
The starting point in any TMS implementation process should always be the company’s goals. What is the scope of the upgrade?
A company that strives to enter the transportation market will require different things from its TMS than an old market player with outdated workflow methods wishing to keep up with times and stay relevant.
Sometimes an enterprise might not even need a full-scale implementation if it wants to address some specific issue with its activity. In this case, the correct goal definition will save a company a lot of time and money.
2. Understanding the pain points of the company
The TMS market is extremely wide nowadays. When searching for an appropriate system for the enterprise, it is essential to look towards something that will aid with the pain points of the company’s workflow.
Does the company have issues with constant vehicle failures? It would be nice to have a TMS with an integrated IoT predictive maintenance module for vehicles that diagnoses their condition and prevents breakdowns. Employees struggle to choose the best suitable contractors for new routes and new locations. Integrated tendering tools will go a long way for the company’s efficiency.
Of course, looking to enhance the strengths of the company with TMS implementation is viable, too, but pain points and weaknesses can be ultimate blockers of progress and need to be addressed without fail.
3. Finding a software development partner
Regardless of the company team’s proficiency, only the top market competitors can afford to create their own specialized solutions. And even such top players sometimes require third-party expertise to complement their own.
The most important thing to look for in a partner for a TMS implementation is experience in the business. Do they have successful projects in the past? How professional do they seem when discussing the intricacies of tracking technologies and solutions?
Because this stage is so important, using a detailed vendor list and as many criteria for selection as possible might be the best decision. Moreover, for a really thorough selection, it is recommended to use not only apparent criteria such as technical expertise, domain expertise, and company maturity but also non-trivial criteria: technological agility, stable company growth, and shared values.
4. Creating a plan
The more detailed and thought-out the TMS implementation plan is, the more efficient the process itself will be. It must encompass all aspects of the implementation, from persons responsible for each little stage to time estimates and possible contingencies.
Adopting some reliable project management software would be a good practice. Features like storing and categorizing all the documentation and creating tickets for arising issues with the possibility to communicate on them would be the most beneficial.
5. Project deployment and continuous support
The TMS implementation might seem like a huge and costly task. However, goal and pain-points-oriented release planning can help in smart resource distribution, which will alleviate the implementation problem greatly. A step-by-step implementation plan would allow a company to begin introducing value and dealing with issues from the first release.
It is essential to define the key performance indicators beforehand so that when the system is operational, its efficiency can be measured in the shortest possible time.
Still, even if the system is performing at a high level, it will require constant support and monitoring by specialists, as well as eventual upgrading to implement new features and technologies. Getting into long-term cooperation with the company’s implementation partner for support services is an excellent solution for that because they know all the details of the project.
Final thoughts on the matter
Implementing a TMS, especially a modern one, with expansive IoT features and integration in multiple processes might be a daunting task. Don’t be intimidated by it, though as with almost any task, careful planning and preparations will be a strong foundation for it. Get your plans done, attract some professionals to work on the project, and success will most likely follow.