All of these investments pay off in terms of operating efficiencies, cost savings, and sustainability goals. “If I am a shipper, I won’t want to use a less-efficient carrier getting an average of five miles per gallon when fuel is at $5 a gallon and I am paying a fuel surcharge that might be the equivalent of 40 percent of the cost of moving my freight,” says Menner. “I will want to do more work with carriers that have deployed the technologies and practices that net them six miles per gallon—which will directly impact my fuel surcharge exposure and ultimately my fuel expense.”
He says the financial aspect involved is probably the single leading quantifiable indicator in terms of efficiencies and is the reason shippers who are dollars-and-cents minded are embracing these programs.
Smarter, Greener Routes
Brandt at Roadnet explains that there are two methods of optimizing routes: standard routing and dynamic routing. Standard routing is used extensively in the food and beverage industry because of the exceptional level of customer service it delivers, including a consistent driver and a consistent delivery day and time.
Roadnet’s Territory Planner product considers all of the customers you deliver to and creates territories, with one truck covering each territory. It examines how much you deliver, the capacity of the vehicle, and the time window commitments in order to create the most optimized standard route. “What makes a standard route inefficient is the fact that not everyone always orders,” Brandt says. “So if the driver has 10 stops and only five people order, it is not very efficient from a mileage standpoint and from the standpoint of your vehicle’s capacity. Roadnet helps balance out when one route has 125 percent capacity opposed to another route with only 50 percent capacity.”
But this standard routing method also creates inefficiencies relative to mileage, Brandt explains. “With fuel continuing to top over $4 a gallon, maybe you need to make some changes so it’s not just Joe who delivers to Paula’s Deli and who has a great relationship with Paula. Maybe it needs to be Joe, Jack and John delivering to the deli and developing rapport with Paula. If you want to become more efficient and more green by reducing miles, you might want to look at another routing optimization method such as dynamic routing.”
Dynamic routing considers up to 200 different rules—such as who you need to deliver to tomorrow, what time are they open and what time do they close, and what is their preferred time windows for deliveries. “We then develop the best route based on these rules and the program creates density because the more dense the routes are, the more efficient they will be,” Brandt says. “But the cost of doing it this way could be that Joe delivers one day, Jack the next day, and John the next.”
Delivering The SmartWay
FreightMaster is Next Generation Logistics’ TMS product allowing users to manage and maintain their carriers participating in the SmartWay Transport Partnership administered by the EPA. “The system allows users to see which carriers are SmartWay participants and which are not,” says John Riske, vice president of business development for the Inverness, IL-based company. “Our customers can determine whether they want to choose a SmartWay carrier vs. one that is not as they undertake the process of selecting a carrier for a particular route.”
Although not every carrier participates in SmartWay, those who do are leveraging sustainable results as they reduce miles to gain marketing advantages, Riske says. “As a SmartWay partner, you should be looking at your role in the sustainable world relative to carbon emissions because it impacts you and your customers. As a carrier and a shipper, you can leverage your marketing efforts around reducing your carbon footprint.”
Riske adds that shippers more than ever before are asking that their carriers become a SmartWay partner so they can manage, track, and report their sustainability performance. Many companies are looking for advance reporting and KPI reports relative to a carrier’s carbon index. “FreightMaster allows users to analyze and plan their orders in terms of building like orders and trying to consolidate loads to reduce their carbon footprint. The system allows them to maximize capacity and produces the most efficient route with the least-cost miles. It does this by taking multiple LTL shipments and combines them with multi-stop loads to reduce miles in your network while reducing your costs.”