Carrier management software in the fuel industry has come a long way. Its primary mission has always been to assign, manage, and review shippers and carriers. One year after the pandemic gripped the world– we are starting to see some trends and best practices emerge that enhance the overall industry.
Prior to the global crisis, many traditional carrier and logistics management systems still relied on manual activities, including paper systems, where shippers and freight carriers lacked access to real-time data, reporting and dashboards. The latency and lack of visibility amounted to higher costs and lack of efficiency. The old, outdated information made decision-making impossible. One of the biggest issues was that carriers could not plan accordingly for fluctuations, or other issues that might arise in an already unstable world of economic unrest, a global pandemic, an oil crisis or other fuel supply chain disruptions.
Many operators recognized the need for real change and to implement digital transformation. Changes to carrier management systems and platforms needed to occur in order to easily keep track of fuel surcharges, contract negotiations, on-time deliveries, fuel inventory and various other critical data. This also included receiving up to the minute access to information about hidden freight damage, driver courtesy, professionalism, and other relevant customer service standards.
Through the implementation of advanced technologies and data systems, shippers and carriers can have significant advantages — opening up new possibilities for collaboration, proactive planning and a potential overhaul to their freight management system. In an industry where every penny matters, there are several best practices for addressing carrier and logistics management – some technology-related, and some not. Let’s take a deep dive into some of them.
1. Invest in software: A good logistics solution can help predict demand and propose what quantities of each type of fuel should be delivered to each station; ensure that tanks don’t run out of fuel; make sure there’s product in each tank, and maintain a balance between products with high and low sales volume. A software platform can help you reduce friction and remove the barriers between operational groups with a single, connected solution. It can also provide one version of the truth by giving retailers, wholesalers, and carriers access to the same system and the same data.
2. Gain real-time visibility: Real-time visibility gives carriers all kinds of advantages such as access to load or freight boards. A load board is an online marketplace where truck owner-operators, shippers, and freight brokers can post and search for loads to keep freight moving. If operators have extra capacity, and somebody has a scheduled load that they need to get picked up, and you’ve got capacity, you can jump on that load board and get a hookup and then haul that load of fuel. Real-time visibility also allows you to know where your fleet and fuel are at any time – making it easier to tag team on other issues that might arise and manage issues such as inventory, forecasting, sourcing, and dispatching.
3. Know the news: What is happening around the world can often significantly impact carrier management. A natural disaster, such as a snowstorm in Houston, could impact the timing that fuel is being delivered when operators can buy or get deliveries, or even what prices fuel is being purchased. Just a few months ago, Texas fuel marketers reported adequate supplies of gasoline but slow distribution as severe winter weather gripped the state. The icy roads and below-freezing conditions led many fuel marketers to keep drivers who were responsible for the last leg of fuel distribution safe.
4. Understand safety: Know the safety requirements that are designed to allow a carrier to haul loads. Operators need an appreciation that there’s a huge legal liability for hauling fuel. The average load of fuel is about 7,000 gallons. That is a lot of fuel, and if safety measures are not followed, this could cause a lot of damage. Carriers that are hauling and delivering fuel need to make sure to put fuel in the tank in the right way, fill out the paperwork correctly, and have general respect and appreciation for how complex and dangerous their job can be. Using tools such as electronic logging devices (ELD) will help manage and monitor driver and fleet compliance, simplify driver workflows, increase safety and provide real-time visibility to streamline operations. This keeps drivers safe, keeps the fleet compliant, and keeps the business efficient. Dashcams also provide safety for drivers — improving driving behavior, guarding against accidents, and providing valuable evidence if an accident occurs. Using built-in artificial intelligence and infrared can detect road hazards and driver distractions too.
5. Communicate often: Have regular meetings to review the data so improvements can be made if necessary. Regular meetings with carriers, not just when things are challenging or if issues arise, can help address issues that might come up, such as frustration over an awkward tank placement at one location or difficult deliveries in a congested, big city like New York. There might be extenuating circumstances at some locations, but with open communication, solutions can be figured out together. About 15 years ago, many organizations owned their own drivers, carriers, and tanks. That has since changed. Now, the majority of fuel delivery services are contracted. Having a close relationship with the third-party delivery service is critical to success.
6. Identify Strengths: Figure out what a carrier does very well such as inventory management for difficult sites (e.g. tight delivery windows, split deliveries, etc.), and celebrate those strengths. Use the experience to inform and coach other carrier relationships. Maybe a carrier has smaller trucks and can fit into those tight urban locations. Through identifying these issues, a transparent relationship can be formed.
7. Update score cards: Create and maintain a carrier scorecard. Carrier scorecards outline how a carrier performed over time. If a carrier missed the delivery window, picked up the wrong product, didn’t get the paperwork in on time, or missed paying the bank, it can all be captured in one place. That way, an operator has all the complex information about that carrier in one location, and it is simple to determine what carriers are working out and which ones need to be replaced. It is critical to know how your carriers are performing because this can impact customer satisfaction, branding and costs. All of these issues can potentially cause substantial lost dollars for an organization. The score card can also help an operator understand what they need to improve to make the delivery and the relationship more successful.
In Conclusion: The relationships with your carriers are critical to the success of your business and can clearly impact your bottom line – especially as the industry continues to move more towards working with third parties. We believe the entire transportation industry should have access to high-quality, data-driven technology to develop carrier excellence. Technology and communications can be the foundation of all of these best practices.