Want to be every carrier’s shipper of choice? Fix your OTIF rate.
In the world of finished vehicle logistics, a whole new competitive paradigm has just emerged: the importance of attracting truck drivers to haul away vehicles from vehicle assembly plants and downstream transhipment yards.
And it’s a battle being fought on two fronts.
On one front, carriers are fighting to recruit and retain skilled drivers. Pay rates are rising, and drivers are demanding—and getting—better conditions. On the other front, shippers—those vehicle assembly plants and downstream transhipment yards—are fighting to become drivers’ destinations of choice. Because if they’re not, they’ll struggle to get their vehicles hauled away. And they’ll have to pay handsomely—very handsomely—for the privilege.
The ongoing truck driver shortage
What’s going on? A nationwide shortage of truck drivers, in short, especially in the long-haul truckload market. Last year, the American Trucking Associations put the shortage at over 80,000 drivers and predicted that it could reach 160,000 by 2030. The picture in Europe is very similar. There’s no one single cause for this shortage, says the Associations’ chief economist Bob Costello: a lot of factors are at play.
Truck drivers, on average, tend to be older, for instance, and are retiring. Regulations, which make recruiting tougher—think drug tests and age restrictions on driving trucks across state lines. Infrastructure limitations: a shortage of truck stops, for instance, leads to drivers pulling over earlier than they might wish, just to get parked up for the night. And lifestyle factors: why spend nights on the road when a daytime driving job pays almost as well, and sees drivers get home each night?
Roll it all together and fixing the shortage “will most certainly require increased pay, regulatory changes and modifications to shippers’, receivers’ and carriers’ business practices to improve conditions for drivers,” according to Costello.
Let’s stress that last part again: “modifications to shippers’, receivers’ and carriers’ business practices to improve conditions for drivers.”
Today’s drivers don’t want to wait
Free coffee and pleasant restrooms only go so far in an environment where drivers have the upper hand. What drivers really want is hassle-free vehicle collections. They want to turn up, load up, tie down the vehicles—and get back on the road.
Why do drivers want this? For one reason, industry norms pay drivers a fixed rate for each load hauled away from a given destination. From the drivers’ point of view, any waiting time—because that last elusive vehicle can’t be found, for instance—is unpaid time.
The sooner they complete the delivery, the sooner they can get home. Or, alternatively, make another trip—in effect, securing a hefty pay rise by being able to complete more loads within the working week.
What drivers really don’t want is to wait for loads to be assembled, and for missing vehicles to be located. And increasingly, it’s turning out that vehicle assembly plants and downstream transhipment yards don’t want that either.
It’s inefficient, for one thing. Not only do they need more yard drivers, but they’re paying people to hunt for lost vehicles and carry out yard audits, rather than move vehicles within the yard.
Haulage is more expensive, for another reason. Inefficient vehicle assembly plants and downstream transhipment yards see that inefficiency reflected in the prices that carriers charge them.
And more and more, they’re now getting hit by driver detention fees—in other words, a fine levied by carriers for keeping their drivers waiting, and their expensive car transporter trucks idling. At $2 a minute, costs ratchet upwards very quickly.
The key to improving your OTIF rate
What’s the solution? Simple: shippers—those vehicle assembly plants and downstream transhipment yards—need to fix their ‘on-time in full’ (OTIF) rates.
So that when drivers turn up with their trucks, the vehicles that make up their loads are there, ready to be loaded. All of them.
Meaning that loading can start immediately, vehicles are driven just a short distance to the waiting truck, and there’s no need to go hunting for vehicles that can’t be found.
And how do you achieve this? With next generation RTLS comprising low-cost wireless-equipped GPS-enabled hardware tags, activated by on-board accelerometers—meaning that any time a vehicle is moved in the yard, its new location is captured.
And captured with a high degree of granularity, within ten feet or of the vehicle’s location—two or three parking spaces, in other words. At which point, the search time for the vehicle is effectively zero.
Moreover, vehicle location is captured reliably. Unlike with barcodes, which can become obscured, or damaged by bad weather, or subject to missed scans. Or RFID-based solutions, which can also be prone to missed scans and read-errors—as well as requiring expensive infrastructure.
So, if your OTIF rate is putting you at a driver disadvantage, then learn how Cognosos’ next-generation RTLS transforms finished vehicle logistics with real-time visibility to vehicle inventory location — enabling you to streamline processes, reduce costs, and keep drivers moving.
