If you’re not growing, you’re dying. This philosophy applies to all types of businesses, and it’s especially true for the trucking industry, being highly competitive and quickly changing. Trucking companies can thrive by adopting a growth mindset and embracing opportunities like reaching new markets or adopting new technologies.
In this article, we are discussing what opportunities technology offers for trucking companies and how to scale a trucking business using tools like a digital twin and AI technology.
The Importance of Growing a Trucking Business
It’s an undeniable fact that standing still and maintaining the status quo is not enough to succeed in a dynamic environment. With the cyclical nature of the trucking industry, it’s often difficult for startup trucking companies to stay in business for more than five years. In the industry's last major recession in 2019, thousands of truck drivers were out of work as large and small trucking companies declared bankruptcy.
With key challenges like the highly competitive market, evolving customer demand and expectations, and the need to retain talent, trucking companies can use the following strategies to focus on growth.
Long-term customer relationships
Companies can better maintain long-term customer relationships by focusing on service quality and reliability. This helps their business to be more predictable for their own planning purposes, and it can foster customer trust and loyalty, potentially leading to referrals and new customers.
Driver satisfaction
Satisfied drivers are more likely to stay with the company, reducing turnover rates and maintaining consistent service levels. Companies should prioritize driver satisfaction by offering competitive pay, accommodating driver preferences, planning home time in advance, and providing training and career advancement opportunities.
Investment in technology
The trucking industry is seeing technological advancements that can significantly impact operational efficiency, profitability, and business growth. The latest solutions can streamline operations, optimize routes, and provide data analytics for better decision-making to increase revenue per truck.
The Power of Historical Data and Technology
The adage “knowledge is power” is certainly true for trucking companies looking for growth opportunities. With access to data, businesses gain a competitive edge, uncovering insights and responding quickly and appropriately to changing circumstances.
Historical data brings a wealth of information, including details on past routes, delivery times, traffic patterns, fuel usage, and more. These past operations contain clues that can help companies decide on their direction moving forward, as long as they have the tools to decipher this data. Without in-depth analysis, historical data remains just raw information.
This is where technology and the right tech stack matters. Investing in technology like advanced data analytics software and artificial intelligence (AI) can help trucking companies maximize the potential of their historical data.
One powerful AI solution, Plan by Optimal Dynamics, can learn from historical data to make accurate forecasts and optimize strategic decisions for a carrier’s entire network. With advanced algorithms and distributional forecasting, Plan users can predict a range of possible outcomes to plan for uncertainties. Then Execute by Optimal Dynamics seamlessly brings this to real-time operational execution for day-to-day decision makers. This is all made possible with a digital twin of the fleet network.
Growing & Scaling a Trucking Business with a Digital Twin of Your Fleet Network for Scenario Planning
A digital twin is a virtual representation of another system. It utilizes real-time and historical data to create a digital replica of the physical counterpart, giving users a safe space to learn about the effect of different decisions. This means users can simulate options and then monitor and analyze the outcomes. Like a flight simulator, which allows users to incorporate conditions like rain, wind, and even birds, a digital twin lets users experiment without any risk.
A digital twin combined with AI can revolutionize scenario planning for trucking companies. It can incorporate data from drivers and customers to represent long chains of potential outcomes that are then analyzed to help fleet managers reach decisions. They can evaluate the impact of anything from fleet size adjustments to changes in customer demand. This all comes down to helping inform decision-makers to improve efficiency and reduce costs.
Ultimately, this technology can help to drive growth for trucking companies by uncovering the optimal decisions for their goals. Thanks to the scalability of this technology, they can allocate resources more effectively without additional effort in the planning stages. Even more, a digital twin can help users directly explore the idea of expanding the business. With the variable of adding more vehicles to the fleet, fleet managers can better understand the feasibility and timing of such a decision, along with risks and potential benefits based on the simulated outcomes.
Optimal Dynamics’ Plan Product for Digital Twin & Scenario Planning
Optimal Dynamics' Plan product offers comprehensive features designed to empower trucking businesses with data-driven decision-making capabilities. Within Plan, the Network View module provides a digital twin for fleet managers to test the impacts of different decisions and variables. This powerful tool allows them to get concrete answers by editing volumes with key shippers, modifying lane volumes, adding drivers at new locations, and evaluating customer bids. The Bid Manager module, assigns a rating value to lanes and ranks them from most to least valuable. Users can define thresholds for Bid Manager to automatically accept or reject certain bid lanes. This module also enables businesses to evaluate bids from multiple customers simultaneously, providing valuable insights into the interactions between various networks.
One of the primary advantages of Plan is its ability to predict the effects of network changes before implementing changes in the real world. The support of a digital twin allows businesses to see changes in key performance indicators (KPIs) by modifying variables such as the number of loads with a specific shipper, volumes on lanes, new driver hires in specific areas, available driver types, and more. This tool allows businesses to identify the best-case scenarios and hit their desired numbers. The AI-powered capabilities of Plan support informed decision-making to help businesses optimize their operations and increase profits.
The Benefits of Digital Twin of a Fleet Network and Scenario Planning
A digital twin of a fleet network, combined with AI-assisted scenario planning, allows companies to unlock network optimization. With the ability to simulate thousands of different scenarios and their outcomes, decision-makers can look further into the future and choose the best direction to take. Based on proof of value studies, Optimal Dynamics’ solutions have led to:
- 17% increase in loaded miles per truck
- 23% increase in fleet loads
- 8% increase in revenue per truck
- $18K increase in profit improvement per truck per year
Case Study: BCB Transport
BCB Transport, a trucking company out of Mansfield, Texas, aimed to create a competitive advantage for their business and increase profits. With Optimal Dynamics’ solutions, they gained a 19.6% increase in revenue per truck by optimizing their truckload decisions and addressing the complexities of these decisions using AI.
BCB faced the challenge of optimizing operational decisions while maximizing its high-level KPIs in an unpredictable future. As a result of Optimal Dynamics’ powerful AI engine,dispatchers could plan 60% more freight in the same amount of time, exceeding operational efficiency goals and increasing profits.
In addition to increased revenue per truck per week, BCB Transport identified the opportunity to reduce its tractor count by 16% without impacting revenue. For the same period of time, the Optimal Dynamics solution also led to an 83% reduction in driver turnover and a 13% increase in mileage per truck. BCB now has the power of AI as a tool to continue to optimize its operations and drive additional revenue growth.
Grow and Scale with Optimal Dynamics
Plugging into the power of a digital twin and historical data can be a game-changer for trucking companies. Allowing AI to learn from historical data uncovers future opportunities and enhances areas of uncertainty. By using the AI technology of Optimal Dynamics, companies can turn uncertainty into plans and turn plans into action to optimize and increase profits.
To learn more about using AI for business growth, reach out for a demo with Optimal Dynamics.
