The U.S. Postal Service spent an average of $472,744 per month on idle trailers between January 2019 and March 2020, according to a recent article by Brian Straight in FreightWaves. Of course, idle trailer problems aren’t unique to the USPS: Francis Roy, Vice President at vHUB, says that as much as 20% of North American trailer fleets sit unused at any given point in time.
Let’s take a look at the industry’s idle trailer problem and strategies that fleets can use to improve trailer utilization and enhance profitability.An estimated 20% of North America’s trailer fleets sit unused at any given point in time—are you optimizing your trailer utilization? Click To Tweet
An Idle Problem
There’s growing optimism of a vibrant freight market in 2021, according to Don Ake, Vice President of Freight Transportation Research, thanks to a sharp uptick in ecommerce demand and other factors. At the same time, fewer drivers, OEM production challenges, more government regulations and other issues have limited supply side capacity and led to about a fifth of trailers sitting idle, creating a disconnect in the market.
Francis Roy believes that many trucking companies don’t realize how badly they’re underutilizing trailers, leading to the massive idling problem.
According to the American Trucking Association, less than a quarter of the nation’s trailer fleet was equipped with tracking devices in 2019. The figure is expected to rise to 45% this year, but that still covers less than half of trailers. Without trailer tracking, it’s impossible for trucking companies to accurately determine where trailers are in order to improve utilization.
Most fleets focus on maximizing driver hours ahead of fleet utilization, which leads to more drop-and-hook freight. While these trends are beneficial for drivers paid by the mile and shippers that can load or unload trailers at their convenience, it leads to empty trailers sitting around until a driver is able to pick them up—and low trailer utilization levels.
Trailer Tracking Technology
Technology can play a key role in improving trailer visibility, both in terms of location and load status. Fortunately, modern telematics solutions can help quickly identify trailer location and status—as well as real-time tractor locations via in-cab ELD-compliant solution, which can be displayed in an easy-to-use dashboard for dispatch and operations management.
Powerfleet’s easy-to-use interface. Source: Powerfleet
There are four key pieces of information:
- Dispatch needs to be able to find the nearest available trailer.
- Dispatch needs to know that the trailer is empty.
- The driver needs to easily find the trailer.
- The trailer needs to be road-ready.
In addition to location and load status, holistic solutions can provide freight images from HD cameras, door open/close sensors, temperature/humidity/pressure/light measurements and an integrated accelerometer to provide deeper insights. Reefer solutions that can even integrate with chillers to make remote changes to trailer conditions without a driver goes beyond monitoring but actually controlling the asset.
Leveraging the Data to Improve
Technology provides a wealth of data for maximizing trailer utilization, but the key is leveraging that data to inform decisions. Best-in-class software systems make it easy to see real-time assets on a live map as well as provide a dashboard with dynamic AI-powered interaction with a fleet’s assets and cargo database without manually running reports.
Trailer data can also extend well beyond optimizing utilization to:
- Improve Schedules: Most fleets use drop-and-hook strategies to avoid complex scheduling problems but taking the time to improve scheduling and increase the number of live loads can help maximize trailer utilization.
- Optimize Loads: Trailers or containers with sub-optimal loads can be even more costly than idle trailers since they are still transported. Load mixing and other strategies can help maximize the capacity of each trailer and container.
- Right Size Pools: Collecting usage data and inactivity over time can help fleets determine the optimal size of their trailer pool. If there’s a lot of inactivity, it could be a sign that the trailer pool needs to be cut down to improve efficiency.
- Increase Detention Fees: Detention fees incentivize shippers and receivers to quickly load and unload trailers to minimize idle time. Higher detention fees can help increase these incentives and minimize the time it takes to load trailers.
For example, ReedTMS Logistics, a third-party logistics provider, used Powerfleet solutions to find empty trailers in real-time, load specific assets near customer locations, achieve a trailer-to-truck ratio as high as 3.75 to 1 with minimal idle trailers and right-size its trailer pool to avoid over $1 million in capital costs while maximizing its revenue per trailer.
Taking a Holistic Approach
Telematics solutions provide fleets with critical business intelligence to efficiently run their operations and service their customers. While trailer tracking is important, it’s just one part of a wider data-driven culture that can dramatically improve bottom line performance. Fleets should consider adopting a full suite of technologies to maximize their profitability.
Powerfleet’s in-cab ELD solution goes beyond the basics. Source: Powerfleet
For example, in-cab ELD systems that go beyond the basics can provide a wealth of data, including real-time location, fuel consumption analysis and complex driver workflows. These data points can help avoid unnecessary driving, track engine working hours and idling, help drivers better manage the way they drive and proactively maintain vehicles.
The real-time data from tractors and trailers can provide a broad range of insights. For example, you can compare your fleet operations against broad industry benchmarks, determine the profitability of different customers or locations, identify excessive detention and assess fines, and access a broad range of key performance indicators to drive business decisions.
The Bottom Line
Trailer utilization is lacking across most of the nation’s fleets. As managers focus on maximizing driver hours, fleet utilization gets put on the backburner and silently costs millions. Trailer tracking solutions can address these problems by providing real-time location and load status for each asset, providing unprecedented visibility into a fleet’s nationwide or global assets.
In addition to trailer tracking, fleets should consider in-cab solutions and other telematics to access a holistic picture of their business in real-time. Combining these data points with cutting-edge software can provide highly valuable key performance indicators to drive high-stakes business decisions and ensure a streamlined operation.