Operations and Fleet Management as a section is at the very heart of Freight and Commercial Vehicle Operations. They can be defined as advanced systems aimed at simplifying and automating freight and fleet management operations at the institutional level. It is here that ITS, thus far, has had the biggest impact. This is particularly pronounced in terms of cost.
Fleet management covers the whole gamut of services, from the acquisition of vehicles, their day-to-day operation and maintenance, through to their disposal. It is beneficial to break this down further, into five areas:
Many of these activities inter-relate and should not be looked at in isolation. In particular, the hardware required is often similar (usually being based on the use of GPs-enabled vehicle location sensors), with the software making the differentiation between the different categories.
In order to optimise returns, it is essential that the freight and commercial vehicle sector utilises its assets efficiently in the collection and delivery of freight. This often means aiming to ensure full loads and high vehicle utilisation and requires an understanding of the different patterns of freight movements.
The urban environment is also at the forefront of a broader change. Aware of the problems of deliveries and logistics within cities in terms of vehicle size and time restrictions, several cities are trialling “Freight Distribution Centres” or “Freight Consolidation Centres” (FDC or FCCs). Here the larger, inter-urban delivery vehicles unload so that smaller shipments can be consolidated and delivered by smaller, environmentally friendly, vehicles. With fewer vehicles delivering to congested city centres, pollution, congestion and vehicle conflicts should all be reduced. The FCC can also offer a range of related services such as storage, sorting and recycling collection.
Whilst FCCs have been successful in some instances (such as the Broadmead Shopping Centre in Bristol in the UK, Bremen in Germany and Aalborg in Sweden) they require extensive cooperation between carriers, shippers and customers. Furthermore, outside of individual, small developments, there are yet to be trialled on a true city-wide basis. The coordination required and logistical challenges posed by broadening consolidation centres to entire regions has to be overcome. As the number of stakeholders and shipments increase so do the complexity of operations. Any software solutions that assist in scheduling will play a significant role in any growth of FCCs.
Full-load carriers and container transportation companies experience a different range of logistical challenges. Demands for empty vehicles tend to arrive dynamically and are difficult to forecast - and may require acceptance/refusal within a very short time window. Yet the supply of a suitable vehicle, tractor or crew is limited by their previous task and any scheduled future requirement. Each decision has an impact upon the future decisions that can be taken - and so, on the long-term efficiency and profitability of the operation. Longer distance freight movements have a high level of complexity. They are often affected by both:
ITS helps both the public and private sectors fulfil their business objectives in supporting freight operations. The users and suppliers of “freight transportation” services have an interest in ensuring that deliveries are made in a manner which ensures that the goods arrive in the expected quality and quantity at the time (often called OTIF - “On Time In Full”). They are usually broken down into three different types of category: shippers, carriers and consignees.
Freight and Commercial Vehicle Operators overarching objective is to reduce costs and improve profitability. ITS implementations help achieve this by improving the planning and delivery of freight services by providing:
A better understanding of the supply chain complemented by ITS technology can provide the information that the public sector needs to achieve its objectives and develop appropriate freight policies and packages of support measures. Much of this information would have been prohibitive to acquire using traditional pre-ITS systems. An example is radio-frequency identification (RFID). RFID tags can reduce the staff resource required for toll collection; whilst analysis of RFID applications for electronic screening and credential administration help:
ITS systems and applications have an impact throughout the delivery process in four main component areas
At an international level, the planning of a delivery is more complicated, as borders and customs clearance also need to be taken into account. Intelligent Transport Systems assist here too, through the uploading of papers electronically and various schemes to ease border crossings for commercial vehicles. (See Border Clearance)
The physical loading of the vehicle, however is also an important part of the process. Ensuring that the weight is equally distributed across the bed of the vehicle, that the vehicle remains under any relevant weight restrictions and that, when being unloaded between multiple drops, will not become overweight on any individual axle. All can be supported through the use of computer models. (See Weight Screening)
Furthermore, after unloading, and particularly with regard to urban delivery and Freight Consolidation Centres (FCCs), vehicles are able to reclaim used pallets and cages, sometimes assisted by asset tracking technology to return them to a central location, along with any waste or recycling generated, for onward shipment .This helps the number of trips and emissions since only one trip is required rather than two.
However, such time-based distinctions are not the only ones that are relevant. In addition to their benefits for those directly involved in the movement of any given piece of freight, the utilisation of ITS in the freight sector has wider benefits due to its safety implications. Be it with regard to hazardous materials, heavy truck maintenance or load and driver hour limitations, the opportunities to improve safety through ITS affect the driver and company as well as the public, with whom the vehicle interacts both on and off the transport network.
Whatever the shape or nature of the supply chain, routing and scheduling systems seek to reduce wasted vehicle and driver time and to maximise utilisation whilst reducing costs associated with mileage and fuel-spend. This often delivers additional benefits such as a more environmentally friendly supply chain.
Computerised Vehicle Routing and Scheduling (CVRS) software normally comes in two different varieties: offline and online. Traditionally the offline services offer more functionality than the online cloud-based systems. A frequently cited indicator of performance for offline CVRS systems is that, when used effectively, they offer a 10% improvement in routing and scheduling efficiency compared to manual methods.
Offline systems tend to be used by larger fleets (eg over 10 vehicles), as normally the purchasing of the software and the licensing costs are prohibitive for smaller fleets. The advantage of such software is that it offers complete control over the process, with opportunities to specialise the process given the requirements of the fleet in question.
Smaller firms tend to use online-based CVRS, where the software and the processing happens off-site “in the cloud”. These tend (although not necessarily) to have less customisation opportunities than their offline counterparts, but come with significantly lower costs.
The CVRS software takes into account all collection and delivery information before providing the optimum solution for a specific set of parameters which control the way the transport operation is managed. Parameters could include criteria such as road speeds and restrictions, load size, customer opening times/delivery windows and driver hours. CVRS systems can provide daily, weekly or monthly plans. Many also offer a strategic dimension, allowing for alternative approaches to be “trialled” in the system – to explore what the potential outcomes might be. For example, if a large customer is taken on board, what factors in the transport operation would need to be changed to meet the customer’s requirements.
John Menzies & CVRS
CVRS is not a replacement for manual planning. It is best used in conjunction with manual planners. The first iteration of routes often needs adjusting to reflect the local knowledge of the planner to deal with issues such as rush hour (although some programmes take this into account) or known restrictions on delivery times and routes. All scheduling systems are reliant on electronic maps and only as good as the map they use. Whilst some systems are updated by the manufacturer, not all are, so it is important to ensure that any changes in road layout or road restrictions is reflected. This is particularly an issue in developing countries.
Routing and scheduling is a very dynamic field which is constantly changing and progressing, in terms of technology, enforcement and organisation:
Routes configured through the use of CVRS have traditionally been downloaded to drivers’ PDA’s for the following day. However these can now be updated “on-the-fly” to take account of changing factors such as avoid road disruption, incidents or congestion or cancellation or re-scheduling a delivery – to provide automatic re-routing. Much of the work that was done by PDA’s during the initial iteration of CVRS software is now being replaced by Sat-Navs and smartphones. (See Traveller Services and Enabling Technologies)
Concerns about congestion and pollution on road networks is generating a number of innovative solutions. One is Freight Consolidation Centres (FCCs), which utilise CVRS intensely. Another is the increase in measures to prevent freight lorries from impinging on the quality of life of others. These include:
CVRS can seem an expensive solution but the principles on which they are based are relevant to all routeing and scheduling decisions - namely the need to minimise costs and resource expenditure by optimising the use of assets. With rapidly developing road networks or very changeable road network conditions, the local knowledge of the planner is even more important than where networks are well-mapped and the mapping is reliable. (See Just in Time) Online options offer lower costs and are also more flexible when it comes to switching if maps prove not to be of sufficient quality.
“Just in Time” (JIT) delivery relies on the improved tracking of parcels and improved order-processing equipment that ITS creates in order to provide accurate delivery estimates and enable quick loading and maximum vehicle utilisation. It has strong links with the concepts of routing and scheduling systems and asset tracking (See Routing and Scheduling Systems and Security) “Just in Time” can be split into two different components:
“Just-in-Time” (JIT) is an approach to business which aims to minimise costs through the reduction in the amount of inventory being held. It can be summarised as “producing the necessary item in the necessary quantity at the necessary time”. Some of the benefits of JIT for companies include reduced lot sizes, lower inventory, reduced waste and lower overhead costs. It is especially used in high-value industries such as the automotive sector. However, the widespread adoption of JIT across sectors has had widespread implications for the transport and logistics industry.
The growth of JIT creates a range of challenges to the logistics industry. JIT demands speed and reliability from transportation systems. In many cases, this results in a greater number of vehicles hauling smaller payloads. This, in turn, increases traffic on already congested infrastructure which can undermine JIT - where delivery windows can be as short as 15 minutes. With such small windows, even minor events such as road closures can have a serious effect. The trend also risks the capacity of the vehicle being under-utilised or increased demand for larger numbers of smaller vehicles.
The trend towards JIT is not irreversible. Reliant, as the philosophy is, on stability, it has proven to be susceptible to external shocks. Major events such as the Japanese earthquake and tsunami in 2011 indicated that the system, rather than promoting flexibility, can be brittle, fragile and unresilient. The Japanese Renesas Electronic Corporation, a global manufacturer of custom-made microchips, experienced a dramatic reduction in output following the disaster. This resulted in the suspension of automotive production across large parts of the world. The chips proved hard to source whilst JIT management had reduced inventory - in some cases to approximately only 6 hours’ supply.
The internet has enabled a wide-range of goods to be ordered online and delivered straight to the doorstep of the consumer. The goods vary in nature from bicycles and books to weekly groceries. In an attempt to deliver superior customer service many companies offer next day delivery on orders which are placed as late as 7pm the day before. This creates a logistics challenge for the organisation(s) involved in selecting, packing, loading and delivering the goods on time, especially if the consumer has specified a tight delivery window on the following day. Order-processing technology and scheduling systems have to be able to deal with these sorts of orders in real-time.
Although internet delivery has been around for a significant amount of time, its use has recently mushroomed. For example, on December 3, 2012, Amazon.co.uk received the equivalent of 44 orders per second, with a truck leaving its fulfilment centres in the United Kingdom (UK) every two minutes and 10 seconds. Online shopping is now approximately 20% of the UK market (excluding food-based sales). In France the use of online shopping increased by 45% between December 2011 and December 2012 whilst in the United States over 8% of all retail sales were conducted online, with a value of $142.5 billion. The delivery of goods from internet-based retailers is big business and is set to grow further. As firms compete to deliver the best service, estimated delivery hours are becoming more accurate. Deliveries which were originally quoted as being made “within 3 days” can now be booked to within single hour timeslots.
From an environmental perspective, the rise in large scale next-day delivery traffic has both positive and negative impacts. Whilst it may be more sustainable than all shoppers on a given delivery round driving to the shops individually, it is less sustainable when packages are not delivered by the same company or when there tight delivery schedules reduce the time opportunity for load consolidation.
All “Just-in-Time” delivery requires reliable, extensive delivery networks, from national distribution through to last-mile residential links. The quality of the nationwide road network needs to be taken into account as well as any potential delays at inter-modal terminals or border clearance points for international shipments. This is particularly the case with manufacturing-based JIT.
Kazakhstan – Road between Atyrau and Aktau
Another important factor to bear in mind for customer-led JIT is that of matching customer aspiration. Only 4% of Amazon (USA’s) customers have signed up for the Amazon Prime guaranteed 2 day delivery scheme. If longer delivery schedules will still satisfy customers, then these should be recommended on the basis of the extra options they offer any logistics firms delivering to customers.
The gathering of data about how vehicles are being used is a valuable resource for many firms. Data can be captured from three major sources: vehicle sensors, driver behaviour and goods’ condition sensors. These are relevant to vehicle and driver safety and multi-level security systems. (See Vehicle Safety, Driver Safety and Security)
The ability to track the location of vehicles is one of the main basic functions of all Fleet Management systems. It is usually based on the use of GPS to plot the location of the vehicle in real-time, although it can based on a cellular triangulation system. There are two main types of system used in modern devices:
The collection of data on the condition of the vehicle, such as road speed, engine RPMs, coolant temperature and tyre pressures (for example) have proved very useful for:
However for operators with fleets composed of vehicles from multiple manufacturers the non-standardised way in which vehicle sensor information is recorded and stored can be problematic because of data incompatibilities between different proprietary systems and the difficulties of integrating the information to manage the fleet as a whole most effectively.
AEMP Telematics Standard
Data on driver behaviour makes it possible to develop a profile of driving behaviour for any given driver. This can often be supported by real-time video monitoring with cameras inside and outside the vehicle, enabling the driver and the surrounding traffic to be monitored. The information captured can assist in the creation of training programmes for specific drivers to target areas most in need of improvement and it can help in accident investigation.
Where the data is integrated into driver feedback and training, changes in driving behaviour can deliver large-scale savings for fleet operators. For example, one such product “GreenRoad” (www.greenroad.com) claims changes in the scale of:
These are often the main cost drivers in the freight and commercial vehicle industry, so any savings can be significant in lowering costs and winning new business. Although products may differ between manufacturers, the technology is the broadly similar. An on-board unit senses how the vehicle is being driven, the vehicles’ location and other useful data – which can be stored and relayed in real-time (usually via satellite or mobile phone technology) to both the driver and a central monitoring location.
Sensors within the vehicle offer the opportunity to monitor the status of the goods being transported. This has proven particularly useful in the fresh and frozen produce and chemical industries where ensuring that temperatures have been maintained at a specific level can be of vital importance in the acceptance of goods. Other sensors can detect whether or not goods have been tampered with by sensing whether they are accessed in transit. (See Security)
Authorities have a particular interest in tracking HGV movements across national road networks, especially with regard to dangerous or hazardous loads.
Standardised Hazardous Goods Alert Field trial (SHAFT)
The modularity of on-board monitoring and telematics systems, with the capability for adding sensors, allows for easy customisation of features. This means that only the most relevant features need be bought and installed for any given vehicle or firm. This is important given that the systems can be very expensive. Prior to installing widespread telematics and on-board monitoring systems, it is worth remembering that the sensors are only as useful as the action that is taken in response to them. It is how the data that is recorded is interpreted and used by operators to manage their fleets - that makes the real difference. Driver behaviour monitoring is redundant unless the results are closely monitored and appropriate training provided to solve the issues presented. Likewise, knowledge of the condition of a vehicle is useful only when acted upon with preventative maintenance.
Given the expense of such systems, two questions need to be asked before they are used:
This is a developing area - and the expensive installation of sensors can sometimes be avoided. Increasingly the use of smartphones is seen as an alternative approach. Several applications can measure, through accelerometers and internal gyroscopes, driver behaviour and these should be assessed first as a low-cost trial solution.
Electronic payment (See Electronic Payment) is most commonly used for electronic tolling. Tolling can be for any number of purposes, although traditionally it was used to pay for the upkeep of various sections of road networks. Tolls are deployed on bridges (such as the Dartford Crossing, UK), tunnels and motorways (the M50 in Dublin, for example). Much of the money raised may be spent on maintenance. Some countries (particularly in mainland Europe) also toll the use of their motorway network to pay for its upkeep.
However, with the increasing level of complexity offered by technology the debate on road user charging has become more complicated. Charging can now be for specific purposes or policy objectives – road network maintenance, road space allocation, revenue generation, and the user/polluter pay principles (integrating societal and environmental costs in congestion and road user charging). Such systems can also be based on time, geographical location, type of vehicle or a combination of them.
Traditionally tolls were collected manually, requiring large amounts of space for toll plazas with their many lanes and booths - and causing major disruption to the flow of traffic. Developments in technology have enabled these to be largely replaced by less disruptive techniques – with vehicles being identified to the tolling authority by three different methods (on-board units, RFID tags, ANPR cameras) which can be used alone or in combination with each other.
Microwave DSRCs (dedicated short-range communications) makes it possible for vehicles to be identified by a base station without their having to stop at a toll barrier, although some systems still only operate at low speeds. A programmed On-Board Unit (OBU), registered with the vehicle type and the operator’s details communicates with an electronic reader, enabling a single bill to be collated from regular trips, which are then invoiced directly to the company or driver. More recently, increasing numbers of OBUs and tolling systems track GPS data to measure how far the vehicle has travelled on any given toll operator’s roads. The development of toll roads across Europe has not been well co-ordinated so far, leading to some international transport companies having to install up to five different systems on board each vehicle. Examples include the M6 Toll in the UK, the LKW Maut in Germany (See LKW Maut Electronic Tolling (Germany)), the French ECOTAXE and Malaysia’s ‘PLUS’ Toll.
French ÉCOTAXE
As with asset tracking (See Security), terminal processing (See Terminal Processing) and end-to-end tracking (See End-to-End Asset Tracking) the development of RFID tags has changed the face of toll collection. Here, at the entrance and exit points of the tolled area, a passive RFID tag – embedded with the vehicle and operator’s details – is scanned by a dedicated gantry and the details passed to a central server where the bills are created, collated and sent on to the vehicle operator. Examples include the Dubai ‘SALIK’ System and the Singapore ‘ERP’ System.
ANPR cameras can either be used as stand-alone systems (as in the London Congestion Charge) or as an additional level of security for the OBU or RFID systems. This is especially useful to track and charge users who do not have RFID tags or OBUs fitted (tourists or irregular users of the road) or where the OBU or RFID tag has become damaged and is no longer operational. Once scanned by ANPR, the number plate can be cross-checked with the vehicle owner’s database and a bill despatched. Alternatively, users can submit payment by telephone, internet or at a kiosk by stating their number plate, allowing payment to be processed after its registration.
Lack of interoperability of equipment and back office systems between tolling authorities is a key barrier to their deployment and realising the full benefits of their potential – particularly with regard to OBUs. Poland, for example, has different operators for its major motorways, which has resulted in the need for users of the equipment to purchase multiple transponders. The European Union has been trying to achieve harmonisation through open standards and common guidelines on deployment given the large amounts of international road freight that crosses borders every day. Progress is slow.
GPS based systems require very high-detail position and mapping tools to ensure that, where two roads run parallel (an old main road and a new motorway for example), the correct location of a vehicle (and the charge for road use) can be calculated accurately. This sort of tracking has associated issues such as privacy and control of information.
For emerging economies, interoperability is the key issue, to break down barriers in the seamless movement of goods. As such, satellite based systems are often seen as preferable, although the issues of accuracy of mapping remains a challenge. (See Case Study ‘LKW Maut (Germany))
Theft of on board units is also a concern. Malaysia, for example, has seen significant numbers of crimes with SmartTAG transponders being stolen.