Author: Vitaliy Dadalyan

30 Jun by Vitaliy Dadalyan Tags:

Uber, Amazon, and What the Sharing Economy Means for Freight Hauling

<img width="150" src="http://www.automotive-fleet.com/fc_images/articles/m-ubercargo-1.jpg" border="0" alt='

Uber, of course, is part of the move to the "Uber-ization" of freight too.

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Uber, of course, is part of the move to the "Uber-ization" of freight too.

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Despite all the talk of the “Uberization” of trucking and tons of venture capital poured into startups that promise cheap same-day delivery, companies like FedEx and UPS aren't likely going anywhere soon — but Amazon has been and will continue to be disruptive to the logistics business, according to Richard “Dick” Metzler, chief marketing officer of uShip.

In a conference call hosted by the investment firm Stifel, Metzler looked at the potential impact of the rapidly evolving “sharing economy” in freight transportation and logistics. Although he now works for uShip, one of the first online freight shipping marketplaces, Metzler has a long career at traditional logistics companies such as FedEx Logistics and XPO Logistics.

What is the sharing economy?

Metzler's definition of the sharing economy is where on-demand companies aggregate demand online but fulfill that demand through offline services. The classic example are on-demand ride-sharing services such as Uber and Lyft, where you use an app to get a ride-share instead of a traditional taxi service. If you've bought items directly from individuals online, bought tickets from an online reseller, used online home-sharing services like AirB2B, those are all examples of the sharing economy.

Today, we are seeing the “Uber of everything,” he said, from companies such as Amazon, Google and Walmart to less-well-known operations such as Deliv, TaskRabbit, and Shyp. You can get a hot meal, even a private jet. “You name it, someone has Uberized it.”

In the past couple of years, a lot of venture capital has poured into dozens of startups that aim to take the low-tech business of arranging cargo shipments online. Metzler called it the “fear of missing out” effect and said most of these companies are unlikely to get second rounds of financing.

Metzler pointed out that the “sharing economy” and the “on-demand” economy are not necessarily one and the same, although the two often overlap.

Fast, free, or both?

Uber and Amazon both tapped into “latent demand” — a demand for something that consumers sort of didn't even know they had until someone pointed out it was possible.

“I think Amazon Prime will go down in history as one of the most brilliant combinations of marketing and logistics ever,” Metzler said. “They created the need for speed that leaves others trying to catch up.”

The e-commerce giant Amazon, with its Amazon Prime subscription service that includes free two-day shipping, has helped make the notion of free, fast shipping “table stakes” Metzler said. He questioned how much consumers really want same-day or even one-hour delivery from their e-commerce purchases — or if they want it enough to pay enough for delivery companies to be able to turn a profit doing it.

Metzler cited a "Future of Retail” study that found free shipping was two times more important to consumers than same-day shipping — 88% vs. 49%. Those who shopped online more frequently, however, had higher expectations for delivery speed.

Another survey found that in general, when shipping is free, people don't expect to get it as quickly — but Amazon Prime members are not as patient. When paying for shipping, people expect to get it faster.

The real world

The problem facing companies offering on-demand logistics, and the reason he believes many start-ups won't make it, are low route density and low revenue per stop, Metzler said.

How does on-demand shipping work? Sort of like Uber. A customer orders shoes online, the order is routed to the nearest stores that sell that style. A driver nearby accepts the order via a smartphone app, goes to the store, buys the shoes, then drives to the customer location, maybe for a $5 delivery charge.

It's just costs too much to the provider to offer same-day or one-hour delivery. He offered the case study of one company, Bloom, that was struggling to survive due to one-hour delivery cost economics. They cut service back to next day, didn't lose business and cut their costs by 25%.

“When it comes to delivering stuff there are only two ways to be productive,” Metzler said. One is massive route density, like FedEx, UPS, or Amazon. Or you get much higher revenue per stop, like Cargomatic or uShip. Most of the on demand startups have neither, he contends.

“Amazon built a massive infrastructure and almost has an unfair advantage over every other retailer out there,” Metzler said. “There doesn't seem to be anybody in the e-commerce world that's happy with their e-commerce channel because they're trying to out-Amazon Amazon.”

On the other hand, he said, although Amazon has been investing in planes, trailers and even trucks of its own, “I also think they have a long way to go to compete with UPS and FedEx.”

Nevertheless, he said, “If I was still sitting in Memphis [at FedEx], I would have a nuclear plan on the shelf just in case – and I'm sure they do.”

Looking ahead

When the dust settles what are the likely outcome? Metzler outlined five distinct possibilities.

  • The Amazon effect. Buyers come to expect 1-2 hour service via a high-level Amazon Prime subscription level and can't live without it.
  • Reality sets in. Delivery times become more reasonable and largely free, consistent with consumer demands and expectation.
  • Go big and go home. Large format online e commerce is beginning to grow at a runaway rate — things like gun safes, large appliances, pieces of furniture. Right now consumers essentially have “white glove” service where such items are delivered and installed, or what Metzler dubbed “brown glove,” with LTLs delivering items. He believes we will see more cost-effective solutions in between these two.
  • Bundle of joy. Carriers and consumers collaborate to have everything they ordered this week delivered this weekend, instead of worrying about being home for a delivery window during the week.
  • Drones and driverless trucks. This is not a question of if, but when and how, he said. It's easy to get your mind around drones for super urgent items like organ transplants. It's harder to imagine how a fleet of Amazon drones will work in the real world, but “I think there will be a role for [drones.]” And the same with driverless trucks.

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30 Jun by Vitaliy Dadalyan Tags:

FSX to Distribute Skyline Aftermarket DPFs

<img width="150" src="http://www.automotive-fleet.com/fc_images/news/m-skyline-1.jpg" border="0" alt="

Photo: Skyline Emissions

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Photo: Skyline Emissions

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FSX Equipment will distribute Skyline aftermarket diesel particulate filters nationally after entering into a mutual agreement with Skyline Emissions.

Skyline's DPFs are designed to be original equipment manufacturer part replacements and FSX says that it studied different manufacturers to determine the quality of Skyline's parts and technology.

“We want to offer a new, high quality OEM replacement DPF to fill a need in the market place for a cost saving alternative”, said Cole Waldo, president of FSX.

The Aftermarket DPFs are currently not available for sale or use in California.

Skyline Emissions specializes in retrofit and aftermarket heavy-duty diesel emissions, manufacturing, distribution and emission testing services.

Related: Keeping DPFs Clean

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30 Jun by Vitaliy Dadalyan Tags:

J.J. Keller Offers Multi-User Functionality for E-Logs

<img width="150" src="http://www.automotive-fleet.com/fc_images/news/m-encompass-1.jpg" border="0" alt="

Photo: J.J. Keller

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Photo: J.J. Keller

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J.J. Keller and Associates developed a method for allowing fleets to track hours of service data for multiple drivers on a single device within the J.J. Keller Encompass System.

With the new functionality, multiple mobile users can share a common device, reducing the cost to fleets and recurring monthly expenses to procuring, supporting and maintaining multiple devices.

The new functionality is particularly useful to industries with drivers who frequently transition from vehicle to vehicle, including hyrail, oil and gas, logging, utility and construction, according to J.J. Keller.

J.J. Keller has also expanded its electronic logging system to include the construction Hours of Service rule set. For drivers whose primary role is to maintain the supply of construction equipment, construction maintenance vehicles, or pavement materials to and from an active construction site, this exemption allows a 24-hour restart instead of 34 hours.

“Construction companies understand their business isn't like over-the-road truck operations. That's why they expect a flexible and compliant Hours of Service solution from their ELog provider that also takes advantage of operational efficiencies in line with FMCSA rules,” said Tom Bray, senior transportation editor for J. J. Keller. “Expanding the number of rule sets in our electronic logging system allows us to support the compliant use of exemptions by drivers in each specific segment of the industry.”

For more information, click here.

Related: J.J. Keller Expands ELog Training for Drivers

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30 Jun by Vitaliy Dadalyan Tags:

TruckSmart App Allows for Parking Space Reservations

TravelCenters of America has updated its TruckSmart Mobile App, allowing drivers to reserve and pay for an available parking space at any TA or Petro location up to 30 days in advance.

The feature is the mobile version of TA's Reserve-It! Parking program, designed to help truckers guarantee a spot to park at the end of a workday. Truckers can reserve a spot from within the app and make payment for it using a credit card.

“Reserve-It! was created by TravelCenters to help professional drivers increase their efficiency and productivity, and to help them ensure they can find truckstop parking at the end of their workday,” said Tom O'Brien, president and CEO of TravelCenters. “Adding functions to our TruckSmart app makes Reserve-It! more convenient than ever before.”

TruckSmart also includes access to UltraOne account balances and recent transactions, fuel prices, show and parking availability, maintenance services schedule queuing, store specials and RoadSquad emergency roadside service.

TruckSmart is available for Android and iOS smartphones through the Google Play and Apple App Store.

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30 Jun by Vitaliy Dadalyan Tags:

Hino Trucks Produces 50,000th Vehicle

<img width="150" src="http://www.automotive-fleet.com/fc_images/news/m-hino268-1-2.jpg" border="0" alt="

A 2017 model-year Hino Model 268A was the 50,000th truck produced by Hino Trucks. (PHOTO: HINO)

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A 2017 model-year Hino Model 268A was the 50,000th truck produced by Hino Trucks. (PHOTO: HINO)

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Hino Trucks has produced its 50,000th Hino truck. A ceremony to celebrate the milestone took place at Hino's plant in Williamstown, W.V., in front of it local and state officials, assembly team members, and Hino executive management.

The 50,000th truck is a 2017 Model 268A, which is part of Hino's lineup of conventional trucks. The milestone caps a record growth period for Hino in which the company has seen a 30% increase in two years. The growth in sales can be attributed to a combination of improved vehicle offerings including a fully connected vehicle platform that is standard across all Hino models, according to the truckmaker.

The Model 268A features a 25,950-pound GVW, achieves 230 hp 520 lb-.ft. of torque and is powered by a turbocharged, intercooled Hino J08E-WU engine (with an optional Hino J08E-VB that can achieve up to 660 lb-ft. of torque) with air brakes.

"It's gratifying for our sales team, our manufacturing team, and our production team to have reached this significant milestone in our company's history. This production level is testament to our trucks longevity and to the commitment of our customers to support a quality product," said Yoshinori Noguchi, chairman of Hino Trucks. "The Hino brand has risen from humble beginnings in the U.S. to become the premier leader in the medium-duty truck market. We have built a solid foundation on which we plan to build consistently and substantially with the help of an ever expanding portfolio of standard features."

Assembled in Williamstown and driven nationwide in a host of applications, the 268A is part of Hino's Class 6-7 conventional truck lineup. Current vocational markets that utilize the 268A include food and beverage, delivery, construction, towing, waste, sanitation, refined fuels, utility, and aerial.

Related: 10,000th Hino Truck Delivered to Penske Truck Leasing

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