Insider Blog

How LTL shippers and carriers are using technology to improve efficiency

Despite capacity constraints and staffing challenges, LTL as an industry is more efficient now than it ever has been. Carriers can plan, route, estimate and bid more accurately than ever before to reduce waste and improve efficiency – but that doesn’t mean there isn’t room for improvement and work to be done.

In an SMC³ LTL202 online education exclusive covering “Technology in an LTL Environment”, three transportation logistics and technology professionals offered their insights on the technologies that are changing LTL and what the industry needs to do to keep up in a future where efficiency will be paramount.

Technology driving efficiency gains

The goal of any LTL tool is to help carriers pick up, route and deliver goods faster, and make it easier for shippers to find, contract and pay the right carrier for their shipments.

Electronic Data Interchange (EDI) is a computer-to-computer communication standard that allows shippers and carriers to share tender, purchase orders, invoices, payment, acknowledgments, bills of lading and more. EDI is deeply embedded in the LTL industry and has been a standard way of communicating between carriers and shippers for years as an alternative to sharing information on paper.

“EDI is ingrained,” said Ben Wiesen, President of Carrier Logistics, Inc. There’s documentation around how EDI should be used, so most carriers know how to use it – even if it’s a suboptimal solution for today’s LTL world.

But EDI has its disadvantages. EDI processes in batches, not in real time, meaning shippers and carriers may be waiting hours before receiving information and updates on their freight. It also does not handle back-and-forth communications and questions well, making it hard to handle JIT (just-in-time) delivery and real-time visibility. It’s also slow and expensive to set up, which is especially burdensome for smaller shippers and carriers who can’t afford to spend a lot of time on setup and maintenance.

Application Programming Interfaces (APIs), on the other hand, are more aligned with today’s expectations of LTL efficiency. APIs are a web-based protocol that allow different systems to communicate with each other in real time and are far quicker to implement than EDI. They also let LTL companies use modern technology like the cloud and the Internet of Things (IoT) to do business faster and in more places.

The drawback to APIs is that they are not widely used, nor do they have established standards for use. Two carriers might have two different ways of using APIs, or an API implementation might be different from mode to mode, which can interrupt some communication between shipper and carrier systems.

That said, APIs are gaining traction in transportation, creating a more efficient, quicker data transfer standard across LTL – and standard protocols are expected to emerge as APIs become more widely adopted. “People are moving more towards API,” said Ravi Goyal, Group Product Manager at FourKites. “We want to let carriers focus on what they’re good at, which is moving goods.”

Digging deep on data to make LTL run smoother

The core concept of LTL – one carrier hauling many kinds of freight to many places for many customers – means that there is no such thing as a single ideal, repeatable, static plan. “LTL carriers are doing something different every day,” said Wiesen: irregular routes, different locations on different days, different product types and sizes. “They never know exactly what they’re going to do.”

A plan that doesn’t adjust for ebbs and flows in capacity, freight mixes or any of the other moving parts of LTL transportation just won’t work for carriers. Data mining and dynamic optimization can help them create plans that anticipate needs and adapt day-to-day depending on changing conditions. Mark Wiebe, Group Director of Transportation Management at Ryder System, said technology that lets shippers and carriers do less clicking, manual work and coding will make the biggest difference in LTL.

Goyal said that there’s also potential for AI (artificial intelligence) and machine learning to gradually change LTL for the better. Because machine learning relies on historical data as well as new input, it can help carrier systems do things like recommend optimal departure dates based on established routes, freight mix and terminal locations.

The relationship of efficiency, environmental concern, and cost

In 2018, transportation was responsible for 8.26 gigatons of global CO2 emissions. That’s about 26% of all carbon emissions across the globe. Demand is still recovering from the pandemic, but the transport sector would still need to decrease CO2 emissions by 20% to meet the International Energy Agency’s Net Zero Emissions by 2050 scenario.

Of course, trucking efficiency plays a big part in carbon emissions. Electric vehicles in LTL trucking are one step toward better efficiency, but they’re not being adopted quickly enough. That’s partly because of road-readiness factors (like performance, range, affordability and availability) and partly due to the nature of the relationship between the transportation and fuel industries. Wiesen, Wiebe and Goyal said there are more practical ways shippers and carriers can reduce waste by increasing efficiency today.

The first step, Goyal said, is to monitor carbon emissions. “Unless we can measure something, we can’t improve it,” he said. From there, carriers can study the impact of better planning, more effective fill rates and proactive visibility on their emissions.

“Carriers are motivated fiscally,” said Wiesen. Increasing efficiency in simple ways can make a big difference on the environment and LTL revenue. “Carriers are motivated not just because we care about the world our grandchildren will inherit, but because it helps us operate more efficiently,” Wiesen added.

Other technical advancements likely to impact LTL efficiency

In closing, the experts gave their predictions of what’s going to make a difference for LTL in the future:

  • Driver safety tools, like the ones currently used to alert drivers to lane departures and vehicle proximity
  • Autonomous vehicles, though not for several years
  • Drone deliveries for smaller shipments
  • Driver behavior monitoring, can improve safety and inform machine learning for better efficiency
  • RFID at the shipment level, reducing the amount of scanning shipments piece-by-piece

APIs are already enabling smarter, smoother communication between shippers and carriers for better LTL freight efficiency, from procurement to transit to dock operations and beyond. Take a look at SMC³’s LTL APIs for shippers, carriers, 3PLs and technology providers.

Hear more from Ben Wiesen at SMC³’s Connections 2022 supply chain conference during his Tuesday session “Making Trucking Cool Again: Innovation + Automation in LTL”. Register today for the premier collaborative supply chain intelligence gathering of the summer!

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Categories: LTL, Technology