No More "Deadheads"- How Supply Chain Visibility Is Solving For The Capacity Crunch -
How can you have a capacity shortage when almost half of trucks on the road are empty at any given point in time?
It's called "deadhead," and it's one of the most vexing problems for supply chain professionals. Not to be confused with tie-dye-wearing fans of the iconic rock band, deadhead is when a truck driver is on the roadways with an empty trailer. It's estimated that as many as 40% of trucks travelling the roadways are empty, which is particularly confounding given that "capacity shortages" are driving transportation costs up by 15 or more percent per year.
The root issue has been a lack of visibility. A trucker drops off a load with a customer, then returns empty on the backhaul because the broader ecosystem of shippers and carriers can't "see" that available capacity in real-time and take advantage of it by matching it with a new job. FourKites Predictive Capacity Management (PCM) product is changing all of that.
The Next Big Thing In Supply Chain Logistics
Why is PCM such a big deal? Using artificial intelligence to dynamically match shipments with available capacity, FourKites PCM allows shippers to execute matches based on real-time conditions including delays at stops, traffic congestion and disruptive weather events. It's a vastly superior approach compared to traditional matching technologies and load boards that operate based on stale historical data uploaded by carriers and shippers—an approach that's antithetical to real-time matching.
Let's take a simple example of a truck hauling a load from Chicago to St. Louis. Real-time tracking and AI tell us if the truck gets in a traffic jam or has a breakdown. The ETA on that truck is automatically readjusted and the system looks for a new match. Shippers and carriers can then negotiate directly on a backhaul opportunity and accept or reject a match, while FourKites integrates with the TMS for processing, payment, etc.
Real-time visibility and tracking is the foundation for this dynamic new two-way marketplace that is unlocking much-needed capacity. That's why we just announced that Kristopher Glotzbach (most recently with UberFreight) has joined FourKites to lead a new business unit focused on helping our ecosystem partners take full advantage of this breakthrough capability.
Bottom line, with real-time visibility and PCM, shippers can get products to market more quickly at operating costs up to 20 percent lower than current levels. That's a massive business benefit for an industry struggling with rising costs.
Customer-driven Innovation
The original visionaries behind PCM are none other than FourKites customers themselves. It was almost exactly a year ago when some of the world's leading shippers spoke up in unison at our Customer Advisory Board and said, "Hey, we are all working on your platform. Help us find matches."
It's this kind of collaboration that makes the FourKites ecosystem so special. Our customers collaborated to articulate the need for matching loads, and today, armed with the new capability they requested, they are collaborating to find and tap unused capacity.
It is a win-win for everyone on the platform and yet another example of the kinds of powerful network effects that are made possible when the world's largest shippers (more than 200 Fortune 1000 shippers, and counting) and carriers share data and collaborate on the industry's most robust visibility platform. Every new shipper and every new carrier who joins and uses the platform makes it that much more valuable for every other organization on the network. More users = richer data for benchmarking, analysis and insights to help you deliver more value to your respective businesses.
It's not hard to see the immediate value to shippers and carriers who are now able to dynamically match freight and capacity via PCM. Perhaps less obvious are the potential environmental benefits that accrue when fewer trucks are driving around empty. A study done by The Vehicle Inventory and Use Survey, last put out by the US Census Bureau in 2002, estimated that there were nearly 29 billion empty miles on the road back then. That study has not been conducted since, but in lieu of any significant solutions addressed at this space until now, it's fair to assume the industry continues to drive billions of deadhead miles every year and pump tons of CO2 unnecessarily into the environment.
Last but not least, some studies have found that a "deadheading" truck is 2.5 times more likely to crash than a truck that's carrying freight, so the potential to keep drivers and our roadways safer is an inarguably positive thing.
Needless to say, we are incredibly excited to help the industry realize the full potential of Predictive Capacity Management. Please keep your feedback and ideas coming. I look forward to continued innovation and collaboration with this amazing network of supply chain leaders.