Tackling Wear-And-Tear Of Assets That Run Wasted Miles On Infrastructure Needing Repair
Wear-and-tear on trucking assets is terrible, but inevitable. Technology can help alleviate the pain.
A hearty welcome to the 63rd edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
The US has an infrastructure problem. In a recent survey, four in five cities across the US have stated that they sink a sizable chunk of their federal infrastructure package into repairing and maintaining damaged infrastructure, including roads and bridges. With roughly three-fourths of all freight by weight moving on the back of trucks, it is a comforting thought that the government is interested.
However, not a lot of people are convinced. Ask the American Road & Transport Builders Association (ARTBA), and they would say that the budget allocated to repairing existing infrastructure is too little. Their estimate — only for repairing bridges — is $260 billion. The ARTBA points out that roughly 224,000 bridges need repair across the country. Realistically, if only the most severe, structurally compromised bridges were to be fixed, it would still require around $58 billion — significantly higher than the allotted federal budget.
Realistically, if only the most severe, structurally compromised bridges were to be fixed, it would still require around $58 billion — significantly higher than the allotted budget.
Bad infrastructure has a direct bearing on logistics assets, especially trucks. Highways and bridges with potholes accelerate the wear-and-tear cycle of the suspension and can cause freight damage.
The impact of constant vertical acceleration and deceleration on the asset is substantial. Bridge bumps are a common occurrence at bridge-road junctions, which tend to give out due to the seasonal impact of successive summers and winters (bridges are made of concrete and steel, while roads are usually laid with asphalt). Abrupt vertical movement at high speeds can damage the trucking asset and accelerate wear and tear.
Secondly, there's the impact of bad infrastructure on freight. Consider a reefer loaded with berries. There is a real possibility that the berries get damaged with vertical acceleration over bridges.
The problem with bad infrastructure is that small private players can do nothing to alleviate the issue. "For the government, the solution isn't as straightforward as we might think. To spend on maintenance, local authorities will have to increase taxes on vehicles in the region — but if you add taxes, you pull out the regional logistics growth incentives. There's no easy way out of this issue," said Alvaro Echeverria, the CEO and co-founder of SimpliRoute, a last-mile route optimization platform.
To spend on maintenance, local authorities will have to increase taxes on vehicles in the region — but if you add taxes, you pull out the regional logistics growth incentives.
If the government does get into repairing roads and bridges, that could result in logistics bottlenecks. Construction will mean orange cones come out on the road, slowing down traffic and impacting freight flow in the region. Construction also spikes trucking demand in the area, soaking up local drivers and affecting driver availability for long-haul trucking. Then again, this is the reality the industry plays with. The federal push towards improving infrastructure can be an interesting development to look at from the POV of carriers intending to recruit in an already-tight driver market.
Carriers can't lose their sleep over infrastructure, though. Wear and tear is inevitable, but technology can help optimize routes, especially in the last mile. Tech platforms can solve the traveling salesman's problem via machine learning — something that has been done manually to date.
The traveling salesman's problem reads thus —
"Given a list of cities and the distances between each pair of cities, what is the shortest possible route that visits each city exactly once and returns to the origin city?"
Solving this problem will mean carriers save thousands of deadhead miles annually, directly reducing the wear and tear on assets. That said, routing optimization is not something that carriers can build in-house. While seasoned truck drivers will have an excellent understanding of the state of roads and routing possibilities to pick an optimized route, this knowledge is siloed within individuals and unscalable across the organization.
Echeverria pointed out that the complexity went much beyond. "For companies delivering within the boundaries of a large city, the number of variables you contend with is truly remarkable. Even if drivers learn from their previous mistakes on routes they run every day, the nature of traffic and the time of the day can drastically impact decision-making," he said.
Even if drivers learn from their previous mistakes on routes they run every day, the nature of traffic and the time of the day can drastically impact decision-making
This results in companies repeating mistakes over and over again, as information does not flow well across the organization, even as the management lacks visibility into the veracity of information.
"If I'm a delivery company, my expertise is not data. My expertise is moving things from a distribution center to the end consumer," mentioned Echeverria. "Technology helps increase the success rate of deliveries as it can consider a lot of variables that are hard to compute manually, considering they are dynamic across time."
While route optimization is usually looked at as a tool for carriers running more than a handful of trucks, it is steadily becoming a must-have for all carriers thinking of optimizing their delivery runs. Aside from reducing wasted miles, technology also enables fleet growth more efficiently.
"Imagine you run a company with 15 vehicles, and now the system tells you that you can fulfill your daily delivery volume on 12 vehicles. That's the power of technology in the market today," said Echeverria. "Logistics isn't looked at as a cost center any longer, and if leveraged well, can be a competitive advantage. As maintenance costs steadily rise, technology can assist companies in cutting down on empty and wasted miles, bring costs in order, and scale the business efficiently."
The Weekly Roundup
American diesel fuel prices could be facing a steep incline as the holiday season picks up. Prices have been more or less static with nominal rises and falls but that is likely to change as the overall fuel stockpile begins to dwindle to its lowest level since 2008. Per gallon, the cost of diesel fuel is $1.60 more expensive than last year, currently $5.333/gal and could rise even higher.
The truck driver shortage has been an ongoing issue for the trucking industry. According to the ATA, the US is short approximately 78,000 truck drivers. AZ Senator Mark Kelly has introduced a bill that would lower the requirements necessary for a CDL which could make it easier for new drivers. However, many veteran truck drivers believe the issue goes much deeper than that.
Interestingly, one of the industries hit the hardest by the pandemic was the furniture industry. With much of the furniture being imported from China and other countries, the supply chain congestion decimated the flow of couches, chairs, recliners, bookshelves, and other home and office furnishings. As ever, the market has adapted and responded in a curious manner as the furniture rental market is booming.
Thanksgiving is shaping up to be something different from traditional, at least from a grocer point of view. In addition to different food options becoming popular, many grocers are offering easy-to-make alternatives for first-time Gen-Z holiday chefs. In addition to providing different offerings, many grocers are offering discounts on thanksgiving favorites to offset inflation swelled holiday spending.
“Folks are very concerned about the impact of any self-inflicted disruptions on supply chain and what that would mean and the ripple effect it would have on the economy.”
- Jonathan Gold, vice president for supply chain at the National Retail Federation (NRF), commenting on the concerns of a port worker strike across the West Coast as negotiation talks stall
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