Logistics: The new truck program

Ken Kelley / December 28, 2000

Logistics. That's the new buzzword in truck management, and truck management
has a way of attracting buzzwords. About 25 years ago, full-service leasing
was advanced as a plan that would ease many problems of truck operation.
For instance, paying the steadily rising cost of new trucks along with managing
the myriad details of having the vehicles serviced were recognized problems
of truck ownership. Why not solve them both by turning those worries over
to a company that not only leases the vehicles but also handles service
duties as well?

Full-service leasing is still around. Some truck operators swear by it,
while others were upset to find that they paid extra when someone else bought
their trucks and took them off their balance sheet. Leasing has yet to solve
some of the problems of truck ownership; meanwhile, logistics has now moved
into the lead among plans said to take the headaches out of managing trucks.

As a truck program, logistics is so new that no one knows exactly what it
covers. However, a survey of those in the truck-logistics field indicates
that they feel it includes everything which could possibly have some bearing
on truck operations. Logistics is more than an effort to help auto owners
or operators of long-distance trucks, and will deliver some benefits to
readers who use trucks in their work.

The contributions of computers to bookkeeping and "smart-bombs"
to fighting wars also are well known. Some logistics people are asking why
not take similar advances that can be applied to truck management and combine
them to bring management into the 21st Century?

Trucks already have benefited from many such gains. Diesel engines that
can diagnose their own malfunctions are a leading example. One problem,
however, is that the application of these modern wonders has been uneven
throughout the truck field. Therefore, logistics people are pushing for
organized application of new advances.

The use of computers, radios and satellites to schedule truck maintenance,
spot on-coming mechanical problems and route and reroute them to meet changing
conditions is frequently covered in articles published in the truck trade
press. Although it wasn't labeled as a report on logistics, an article in
the Sept. 18 issue of the consumer magazine U.S. News & World Report
detailed the trucking success of common carrier, Schneider National, headquartered
in Green Bay, Wis. High-tech communications, service planning and routing
programs were discussed in the report.

Schneider established itself as a trucking pioneer in 1988 when it started
equipping its trucks with satellite radio equipment at a reported cost of
$3,500 per unit. Communications 24 hours a day, seven days a week, helped
the firm build the logistics strength of its fleet. Now the carrier has
a free-standing logistics business and sells its services to outside companies.
In one of its biggest transactions, it was reported to have signed a $200-million
contract with General Motors to improve the flow of repair parts to the
automaker's dealerships.

While there are big name companies in the business of making diesel engines
with self-diagnostic capability and radios that send signals into space,
the list of big names in logistics is short. However, the number of individuals
who offer logistics advice is growing. Increasing acceptance of the logistics
concept indicates that there will be more big operators before long.

That brings up what some view as a seamy side of logistics. Computers and
robots are not the only innovations in business in recent years. New buyer-seller
and employer-employee relationships have been worked out, resulting in long-term
deals which give the buyer or customer a secure source of a needed service,
and the seller or trucking service a steady flow of business.

This "partnershipping" works out fine as long as both parties
communicate and stick to the deal. However, in regard to logistics partnerships,
some truckers became upset when they discovered that the partnership lasted
only as long as it took the shipper to find a carrier who'd do the work
for less.

In an effort to cut the high costs of warehousing parts, manufacturers
are moving toward the novel "just in time" setups under which
materials are delivered to their assembly plants just before they are needed.
This increases the need for coordinated shipping.

The field of logistics has some ideas on how this situation can be handled:
Expand the use of two-way communications to steer the truck around traffic
tieups, to make rush changes in the hauling schedule and let those at the
destination know when to expect the truck. Keep records on the truck's use
for future service work (an engine with electronic controls will help here),
monitor the driver's safe operation and supply information on finding the
destination with the aid of maps displayed on a dashboard screen. Implement
radar-based collision-avoidance systems, particularly when they cover the
driver's blind spots and aid in backing up safely.

In view of the limited number of firms in the logistics field, how does
a truck operator go about getting reliable help in this field? It has to
amount to more than finding a company with no special expertise that has
simply added the word "logistics" to its name. Those who have
unique skills and a real attitude of partnership are the logistics advisers
to look for.

Kelley is a truck writer based in Dearborn, Mich. You may write him in care
of the editor.

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