Executive
Summary
The explosion in both
the capability of and the number of applications for wireless data systems has
allowed both personal and business consumers to become better connected to the
world around them. The entire
transportation industry is starting to benefit from the resulting improved
connectivity, as trucking carriers are now able to communicate with their
drivers more effectively. Improved fleet
connectivity may result in other potential benefits to the transportation
infrastructure as well as to the industry’s carriers and shippers. We present an overview of wireless logistics
systems, followed by the results of a transportation marketplace survey to
assess current applications of wireless data systems. Further, we discuss future applications of
wireless data systems from the viewpoint of both end users (consumers and
shippers) and carriers.
1
Introduction
Supply chains are constantly being
formed, modified, and broken in response to the dynamic nature of the consumer
marketplace. In fact, the total number
of origin locations and final delivery destinations that any one trucking carrier has is constantly changing. As a result, shippers who wish to stay
competitive are forced to constantly develop transportation logistics networks
with low cost, efficient operations and minimum delivery times. Shortening product life cycles, combined with
fickle, highly variable consumer demand patterns, has forced companies to
create lean, agile enterprises capable of rapidly, and effectively responding
to the dynamic conditions of the marketplace.
The explosion in the capability of
and the number of applications for wireless data systems in the past decade has
allowed both personal and business consumers to become better connected to the
world around them. The transportation
industry as a whole is starting to benefit from this improved connectivity, as
trucking carriers are now able to communicate with their drivers more effectively. Further, a large number of regulatory forms
and permits typically required of the drivers are becoming available in an
electronic format. In addition to the
benefit of reducing the time required to complete such documentation, improved
fleet connectivity may result in other potential benefits to the transportation
infrastructure as well as to the industry’s carriers and shippers.
As information processing is a
crucial component for the effective operation of any company, transportation service
providers are now exploring the advantages of using wireless data systems (WDS)
to manage their transportation data systems as a part of their supply chain
initiatives. According to Symbol
Technologies (2001), most organizations have focused on
warehousing/distribution and store operations as primary areas for cost control
and improved efficiencies. Therefore,
the transportation operations form a cost frontier where new systems utilized
by carriers can provide tremendous savings which are then passed to the
shippers who are trying to reduce costs by improving operational control.
Currently, wireless data systems are
being used effectively to locate trailers in the fleet and for simple messaging
between carriers and their drivers, such as “Where are you?” “When will you be
at the delivery point?” and “Call as soon as you are empty, as there is a rush
load nearby.” Several carriers have deployed WDS to view the
location and status of the trailer fleet assets, thereby providing greater
supply chain visibility and improving overall productivity and
performance. In more advanced
applications, WDS are helping shippers to improve their delivery performance by
reducing lead-time variation for both inbound and outbound shipments.
In this report, we explore the
current impact of WDS on transportation systems and how transportation and logistics
service providers can further benefit from future applications of WDS. The remaining sections of this paper are
organized as follows. Section 2 contains
an overview of logistics support systems, specifically describing the various
types of data that are required during normal transportation operations. Section 3 discusses current wireless system
applications, describing both the benefits and the potential issues associated
with wireless data systems. Future
applications of wireless data systems are detailed in Section 4, which includes
an assessment of wireless system impacts in two different arenas: safety/security and repair/ maintenance. Finally, Section 5 contains some research
conclusions and directions for future work.
2
An
Overview of Wireless Logistics Support Systems
A typical wireless logistics support
system at a transportation service provider receives orders from its customer's
host system, through either Electronic Data Interchange (EDI) or another type
of standard file transfer protocol. This
can occur either at the beginning of the day or at scheduled intervals
throughout a shift. Next, an order
management module preprocesses the downloaded orders and sends them to a
transportation optimization package. The
software package usually makes recommendations for creating multi-stop
truckload shipments, planning truck routes, etc., while taking into account acceptable
delivery service at the least possible cost.
This is accomplished by selecting the best transportation mode, considering
opportunities to consolidate orders, and/or picking load profiles for trucks to
minimize their empty miles, etc. given the delivery constraints of each
consignee.
Typically, the generic carrier plan
suggested by the optimization package is sent to a transportation management
system that validates the plan and makes the actual load/resource (usually
trucks) selection based on equipment availability. In almost every step of this process, timely
availability of accurate information about the loads and resources, including
trucks and drivers, is critical.
Wireless logistics support systems improve the overall transportation
system efficiency by enhancing the availability and accuracy of information,
even if the underlying decision-making process outlined above is not changed.
As a widely used transportation mode in most companies,
trucks have a daily schedule of carrying merchandise from the company or
factory to their distribution centers or warehouses, and from the distribution
centers to the customers (end users) or retailers around the country. The use of WDS can improve the quality and
accuracy of the work, which will in turn, be reflected in the shipper profits.
Before we can investigate the benefits that can potentially
be gained from WDS, the types of data input to and reported by wireless systems
must first be evaluated. We categorize
this requisite data into three main categories:
- Startup Data—the data
required at the beginning of each workday or each trip.
- Ongoing Data—the data
needed during the trip while the truck is in route to the destination
point.
- Destination Data—the
data required at the end destination or delivery point.
The following subsections describe each of the three
data types in detail.
2.1 Startup Data
At the beginning of each workday or
each new trip, truck drivers require some initial data prior to driving. This data includes the type of load being
hauled, the route assignment (e.g., primary and alternate roads), and the
current delivery timetable. Two
signatures are usually required before a driver can begin to haul his load to
its destination. First, the truck
inspector must sign off on the condition of the truck and its cargo. Then, the driver must sign to confirm his
knowledge of the truck’s condition, as well as his understanding of the route
assignment, delivery schedule, type of load being hauled, and any pertinent
safety precautions that should be taken.
Today, leading carriers execute these signatures and others
using truck-mounted computers (TMCs). Truck-mounted
computers are typically linked via wireless connections to various devices and
sensors inside a truck and trailer, including the driver’s wireless device. Figure 1 displays one example of a
truck-based wireless data system. A TMC
receives data from various devices and sensors, potentially pre-processes, and
then sends the information via again a wireless transmitter to various company
networks including an information center usually located at the headquarters of
the company without any driver intervention or attention. The company’s information center can then
process the data in near real-time, sending back appropriate information and/or
responses via a wireless transmitter. Under this wireless
system paradigm, the corporate information system can transmit up-to-date data
to a specific truck or can broadcast to all trucks in the fleet. Consequently, the driver only needs a few
minutes to check the latest data using the truck’s computer prior to executing
his signature and starting his trip.
Figure 1. An Example Truck-Based
Wireless Data System
Drivers
typically access the information transmitted by the company’s computer
information center in one of two ways:
according to a special schedule as dictated by the company or at any
time they choose. Warning lights and/or
sound alarms can also notify the driver of arrival of important information
such as a change in the schedule or the failure of an onboard sensing
device. Warned by the signals, the
driver can access this information with the simple click of a button. When the driver is outside the cab, he can
use his handheld, personal digital assistant (PDA) or another portable wireless
device to access the information directly.
2.2 Ongoing Data
During the trip, WDS can provide the
driver with up-to-date information on the scheduled destination, delivery time,
and the truck’s current location. In
addition, WDS notifies the driver of changes in his destination and/or delivery
schedule due to weather conditions, heavy traffic, and/or blocked roads. The WDS could also transmit information on
alternative roads or changes in the delivery schedule due to inventory needs,
such as when lower than expected inventory levels appear due to unforeseen
demand increases. In such a case, the
nearest truck could be routed to supply a portion or its entire load to meet
the inventory need.
Other important information that WDS
can transmit include such items as current distance from destination, current
distance from origin, average speed, expected delivery day and time, and
location of the nearest warehouse. Also,
when and wherever necessary, the driver can stop at a safe location to use the
truck-mounted computer to send a message.
This may be done by typing in full text or by clicking on certain keys
that have pre-defined special messages.
2.3 Destination Data
At the delivery point or destination,
the wireless data system transmits the time of arrival and the time of the
unloading of merchandise by store personnel.
Official signatures and forms needed at the destination can be handled
electronically through the WDS. After unloading, the driver can find the next origin
to pick up a load and its destination, as well as the type of load to be
hauled, the suggested travel route, proposed time schedule, and information on
weather conditions over his planned trip.
The enhanced availability of data provided
by WDS allows carriers to reschedule their trucks’ routes more frequently by updating the load
schedule or by rerunning the optimization software with the up-to-date data. More frequent route scheduling using the most
recent data potentially promotes better use of transportation resources
including drivers and trucks plus it may lead lower inventory levels at warehouses
and stores. Further, the extreme result
of WDS implementation is the creation of mobile, trailer-based “warehouses on
wheels.” The connectivity provided by
successful WDS implementations can help to reduce inventory levels at the
adopting carriers’ DC or warehouse by storing it in typically moving trailers.
2.4 Other Data of Interest
In addition to providing shippers
with the ability to track each load and each truck on the road, WDS can provide
a direct connection and a quick response between different entities in the
company in case of an emergency.
Examples include dispatching a maintenance team at a breakdown or
contacting an emergency response team during an accident. Wireless data systems can improve truck and
trailer security through monitoring devices such as open door sensors,
connected trailer sensors, engine and speed sensors, and global positioning
systems (GPS) that utilize satellites to pinpoint specific geographical
locations throughout the world.
The availability of low
cost GPSs will allow these systems to become as basic as a telephone, allowing
everyone to “know exactly where they are, all the time” (Hurn, 1989). Additionally, GPS applications will allow
delivery vehicles to pinpoint their final destination, emergency vehicles to
arrive more quickly where they are needed the most, and automobile drivers to
quickly obtain driving directions to any destination.
Hurn (1993) describes the use of differential global positioning systems and their benefits that can
be gained by both transportation and fleet management. “GPS is the perfect technology for this era
‘just-in-time’ delivery. With it, a
dispatcher can monitor every vehicle in his fleet whether they’re across town
or across the country. The result is a
tighter schedule adherence and better accountability.”
Geographic analysis can yield
valuable information that can be used to improve truck routing and scheduling,
optimize fleet and supply chain operations, and increase asset
utilization. Geographical information
system (GIS) technology serves three distinct transportation management
needs: infrastructure management, fleet
and logistics management, and transit management (ESRI, 2002). Transportation professionals can use GIS to
integrate mapping analysis into decision support systems for network planning
and analysis, vehicle tracking and routing, asset management, and inventory
tracking. Furthermore, geographical
databases can enhance transportation, facility locations, and inventory
decisions. Using geographic coding data
simplifies the determinations of traveled distance, traveled times, and
estimated transportation rates between two points, which can benefit facility
location analysis and approximate transportation costs (Ballou, 1999).
The additional benefit of using GIS
is the ability to answer several questions, such as what is the shortest
route? How many fatal accidents occurred
at a specific place last year? How many
houses are located in a particular area? (Brunswick Department of
Transportation, 2002). When companies
attempt to justify the need for logistics network upgrades, Borras (2001)
asserts they need a value chain that includes companies that provide services
such as mapping, least distance routing, content providers (e.g., traffic
information, geospatial data, points of interest, etc.), dynamic route
navigation, and location technology developers.
“Companies such as SmartTrust, SignalSoft and XYPoint were found to
provide computer platforms to be able to extract location information from
operators networks and enable location-based commercial services and
applications” (Borras, 2001).
3
Current
Wireless System Applications
Recently, the need for integrated
wireless data systems has surfaced due to intense competition both among
transportation service providers and between shippers that use this service. Customers increasingly expect customized
products and services usually with a quick response time from their suppliers.
This often results in highly variable demand in terms of both place and time,
and accelerated product life cycles. For
example, the life cycle of electronic devices, such as computers and telecommunication,
is measured in months. Since there are usually
new products every so often and no historical data available concerning past
customer demand for these new products, retailers have to order limited
quantities to overcome the reduction in products’ value during their life cycle
(Mottley, 1998). Shippers typically try
to reduce their product distribution and delivery times to reduce costs. One way to respond to these challenges is to
support the existing logistics systems with integrated wireless data systems.
Figure 2 depicts an example
implementation of WDS in truck transportation.
Figure 2 consists of three main parts or connections. First, all pertinent information is sent to
the company information center (CIC) either by the driver (who sends the
information using the truck-mounted computer) or by one or more truck mounted
sensors. Carriers currently use this data to direct the
truck on the road. This data transfer is
limited, as carriers typically only contact the driver whenever there is an incident. The primary difficulty is that there is no
connection between the driver and the truck when the driver is outside of the
cab. Additionally, load, weight, and/or
engine data is automatically sent to the company through a wireless network by
onboard sensors. Another problem when carriers must contact their driver in an
unusual event is the potential increase in costs by creating a need for
additional personnel at the CIC.
The next part of the WDS
implementation indicates the driver is responsible for informing the carrier of an accident, emergency, or other
incident (via a wireless device). If the
driver is unable to contact the carrier, the police or fire department on
the scene informs the company. When a
mechanical failure or other maintenance issue arises, the driver can use his
wireless device to send information to the carrier’s maintenance department to initiate
(and potentially expedite) the repair process.
The third part of a typical WDS
implementation pertains to the company’s Internet web page providing prices,
products, and shipping procedures to prospective customers. In order to gain market share and improve
customer satisfaction in the highly competitive transportation marketplace, a carrier can use WDS to provide additional
information such as real-time shipment data and tracking information, and the
truck’s current location and expected arrival time at its destination.
Figure 2. An Example WDS Implementation for Truck Transportation
3.1 Benefits of WDS
The overall idea behind many WDS
implementations is that it might be possible to improve the use of resources
(trucks, trailers, and drivers) by improving the data systems and operation
practices. This includes all
transportation types in a supply chain from raw material shipping up to the
final products reaching the customer, as well as “after product sale”
services. Wireless data systems can help
logistics and supply chain professionals develop new competitive strategies by improving
the following activities (with most recent data): private fleet routing and
utilization, supplier freight terms, distribution design and selection,
optimization, benchmarking, cross-docking, and routing guide development.
Many companies have started to
benefit from the tremendous development of WDS to improve their performance and
operation. In 2000, FedEx started to use
a digital dispatch and tracking system in
Another WDS currently available in
the marketplace is provided by Symbol Technologies (2001). Their fleet technology equipment consists of
a portable computer with electronic signature-capture capability, wireless LAN
communications via 2.4 GHz, on-board computer (OBC) for trip recording, global
positioning system, printers, and wide area wireless communications. According to Symbol, businesses benefit from
their systems’ fleet visibility, driver-dispatcher productivity, store communications,
and management reporting. The
applications for this system include activities at the start of the day that
usually involve a significant amount of paperwork, labor, and time such as
route assignment, pre-trip tractor inspection, trailer assignment, and trailer
inspection. The application has been
proven to save time by eliminating the bottlenecks in daily operations and by
making drivers more efficient as the receiving store personnel are on alert as
soon as he arrives (Symbol Technologies, 2001).
When the truck returns to a DC at the end of the day, it automatically
senses that it is within range of the on-site system and uploads trip record
information from the OBC seamlessly into the database.
The use of wireless technology on the
transportation information system will result in more visibility due to the
availability of real-time data; therefore, corrective action can be taken more
quickly, resulting in a reduction in the distribution time and total cost of
transportation. The Chrysler Corporation
reduced its order processing and shipping times from seven days to three and
one-half days after installing wireless networks in their four national parts
centers. Their shipping and ordering is
now directly entered into Chrysler’s wireless networks. In addition to increasing efficiency in order
and shipping processes, Chrysler’s wireless communications resulted in a higher
worker satisfaction (Simchi-Levi et al., 2000).
J. B. Hunt Transport recently
equipped its fleet with Terion’s FleetView trailer monitoring system. According to George Brooks of J. B. Hunt,
“…wireless is a competitive necessity. A
lot of shippers won’t do business with you if you don’t have it” (Haag et
al., 2000). J. B. Hunt’s wireless,
on-board computers helped to save almost 10% in road miles driven per day,
reduced driver phone usage from two hours to 15 minutes, reduced the cost to
transmit a phone call from $1 to $0.20 cents per call, and increased Hunt’s
fleet managers’ productivity by 20 percent (Haag et al., 2000).
Abraham Technical Co. reduced
shipment errors by 75% and saved $11,250 in the process after implementing a
WDS (Hamblen, 2000). ODC Integrated
Logistics’
Yen and Chou (2000) discuss the
efficiencies gained by wireless technologies in business processes by Lehman
Brothers. Order processing times were
reduced from 90 seconds to five seconds, thereby resulting in doubled daily
customer transactions. The efficiency
gained was achieved primarily due to the establishment of direct communications
links between remote workers and the information source.
In addition, WDS can help measure
driver performance. According to Kay
Palmer, an executive vice president of application services at J. B. Hunt, “in
the future the system will use real-time data from each truck’s engine to see
who’s driving efficiently and which drivers are slamming their brakes most
frequently. Over time, better-trained
drivers may reduce the need to call up driver safety queries, thereby making
the highway safer” (Deck, 1998).
Both carriers
and their customers agree on the importance of obtaining accurate, real-time
shipment tracking information. Several
types of devices can help describe a shipment on the road. For example, sensors
can be used to record the temperature and/or pressure inside the trailer, the
arrangement or layout of the merchandise in the trailer, and the total weight
of the shipment, to name just a few.
Further, the knowledge of the trailer’s current load at all times can
help increase the truck’s and driver’s utilization through the reduction of
empty miles.
Some carriers
have started to use these descriptive devices to improve operational efficiency
and utilization. For example, one of the
nation’s largest truck transportation providers, in response to supplier,
customer, and employee requests, is deploying satellite-integrated,
on-board-computers for near real-time tractor visibility, satellite-integrated
trailer tracking for optimal asset management, and Internet-based trailer
content visibility (i.e., loaded or empty).
3.2 Benefits of WDS in Truck Transportation
Table 1 lists various types of data
that can directly benefit from the implementation of WDS in truck
transportation. For each data type, the
primary expected benefit is given in the second column, along with other potential
benefits that may result from WDS implementation in column three.
Basically, using WDS reduces many
different types of process times. By
making data available anywhere, anytime, the delay in response time is
diminished, as personnel at the origin, in the truck (i.e., the driver), and at
the destination location are alerted of any pertinent changes in near real
time. In turn, the ability to
dynamically reschedule trucks and reconfigure trip plans that comes with a WDS
implementation drives timelier, cost effective trucking operations.
Assume an example WDS implementation
saves a carrier
an average of 15 minutes per truck per trip.
Conservatively, if the average truck’s speed is 50 miles per hour, then
the carrier can save
15 minutes of driver time, 15 minutes of truck time, and 12.5 miles of gas
consumption per trip. Further, time can
be saved at many points during a truck’s routing, such as at the beginning of
the trip, at the destination location, and during the trip. Calculating potential savings for a medium size
trucking carrier
that owns and operates 100 trucks, each of which goes on multiple trips per day
makes real dollar savings evident.
Table
1. Potential Benefits of WDS Use in the
Future
|
Data |
Primary
Expected Benefits |
Other
Potential Benefits |