A few weeks ago, we talked about using targeted exception reporting to identify the greatest risk and compliance issues. Today we’ll talk about how ELDs can help you identify opportunities to increase productivity and ultimately improve profitability will allow you to generate more revenue and/or profit with the same number of drivers.
ELDs are connected to the engine control module (ECM) and possess global positioning system (GPS) data, which allows your investment in the electronic logging system to generate even more dividends. Properly designed reports can reduce risk, lower cost, and increase revenue. Opportunities for more efficient use of resources can be identified in reports on high-leverage items such as:
- Excessive customer delays
- Real-time delivery and route tracking
- Fuel efficiency
- Driver and vehicle utilization
- Automated International Fuel Tax Agreement (IFTA) reporting
- Daily Vehicle Inspection Report (DVIR) defect repairs to avoid breakdowns
- Driver scorecards
We will cover a few of these here, but you can find details on all these important reports and more in our whitepaper entitled Improving Compliance and Operations Through ELog Reporting. Targeted exception reporting can help to identify the greatest risk and compliance issues, enhance customer service, and quantify operational inefficiency.
Excessive customer delays
In this era of limited truck capacity and driver shortages, there should be a significant incentive for shippers and carriers to collaborate on reducing excessive loading and unloading delays. Utilizing the electronic log system-generated delay data, delays above the contractual threshold (2 hours for example), will facilitate increased detention billing, and more importantly, support problem solving to allow drivers to haul more freight.
Service and revenue generation improve when a driver’s available hours of service are predictable, and when drivers aren’t continually held up. The driver can make roughly $12-15 per hour in detention pay, for every hour delayed after 1-2 hours, but he/she could be making $25-30 per hour driving and generate $80- 100 per hour in revenue for the carrier. A reduction of one hour per week in driver-delay time can potentially increase revenue for the carrier by approximately $4,000 per year and $1,250 per driver.
Real-time delivery and route tracking
Customers demand real-time tracking and advanced notice of service exceptions. Customers usually understand that a delay occurred but they don’t understand the lack of notice. Each ELD-equipped vehicle will have the capability to use the GPS to provide shipment location information and, when integrated into a dispatch system, real-time alerts can identify potential late deliveries. If you can’t provide this basic customer support either on-demand or proactively, you may risk losing business.
Miles driven that exceed the miles compensated by the customer by more than roughly 10 percent represent waste, unless the miles are driven in support of maintenance or to get drivers home. Each unnecessary mile driven costs approximately 85 cents per mile, based on a 2016 update of an American Transportation Research Institute (ATRI) study of trucking costs for Class 8 trucks. “Out-of-route” exception reporting can illuminate meaningful cost reduction opportunities on a daily basis.
Eliminating excessive-idle generates significant savings. Idling a standard sleeper-berth-equipped big rig consumes roughly one gallon of fuel per hour if the vehicle is not equipped with an auxiliary power unit. Idling for an 8-hour sleep period can burn $20 per night, which is over $100 per week.
Two additional reports to drive improvements in fuel efficiency are:
1) Excessive-speed trend reports by driver and real-time speed alerts, and
2) Drivers consistently exceeding optimal revolutions-per-minute (RPM).
Not only does reducing excessive-speed events enhance safety, Environmental Protection Agency (EPA) has found that driving 65 mph instead of 55 mph can consume up to 20% more fuel. Also, EPA determined that driving at excessive RPM can waste several gallons of fuel each hour.
Driver and vehicle utilization
Drivers’ on-duty hours per day is an indicator of how well planning is using the valuable resources of the truck and driver. The drivers who are below a set level of drive hours or total on-duty hours per day are not productive for a reason. Either the work planned for the driver is inadequate, uncontrollable delays are excessive, or drivers are not making efficient use of the time available. The 14-hour limit, implemented several years ago, created the reality that an hour wasted is revenue lost.
A vehicle that has not generated miles over a certain threshold represent a significant cost of being short of qualified drivers. A truck payment for a Class 8 truck can easily exceed $2,000 per month and a new 53-foot trailer that is idle can represent a $700 per month cost. Smaller specialty work vehicles also represent a significant cost per day when idle. Every day, actions must focus on seating those idle vehicles and/or generating more revenue with the vehicles that are operating.
Automated IFTA Reporting – One of the easiest areas in which to achieve efficiency when transitioning to electronic logs is International Fuel Tax Agreement (IFTA) reporting. Global positioning system (GPS)-generated mileage by state can be used to automate IFTA reports to determine fuel taxes owed. The labor involved in reporting will be significantly reduced and accuracy will increase.
Electronic Daily Vehicle Inspection Reports (eDVIRS) – Electronic DVIRs are another tool to reduce costs and increase driver satisfaction. DVIRs submitted via the electronic logging system can be closely monitored by your operation to ensure repairs are completed prior to your driver operating the vehicle, reducing the possibility of avoidable towing costs and citations.
Driver Scorecards – The scorecard is a way to promote friendly competition, reward cost-saving and safe behavior, and sustain continuous improvement as a keystone of the company culture.
Your ELD back-office system should have an easy-to-use portal with a core of exception reports to help you swim through the sea of data and prompt you to act on the exceptions. A sign of a mature electronic logging operation is one in which exception reporting is part of daily decision making for the frontline and leadership. Unused reports provide no value and may obscure line of sight to the “vital few” issues. Hone your exception reporting to help maximize the return on your investment in ELDs and telematics.