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`
`Market Share of Selected Communications Systems
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`Figure 10 :
`
`communications
`selected
`of
`share
`Market
`(The shades of grey m ay be difficult
`technologies.
`to discriminate.
`Read downwards from the
`top
`following the order of the listed systems.)
`
`public telephones or voice radios (the same is true in the European countries [33]). This reflects
`
`convenience, ease of use, and affordable cost (it typically costs a few dollars per truck per month to
`
`operate a simple voice radio shared system), although the technology is range-limited.
`
`Using voice radios, the fleet manager and the driver can be constantly in touch and exchange
`
`messages reporting changes in schedules, expected time of arrival, directions to the shipper’s dock, and
`
`traffic updates. New load information is generally not communicated because many systems do not offer
`
`privacy. The capability also exists to interface voice radios to telephones so that customers can talk
`
`directly to the truck driver.
`
`Fleets report that this option is valued by the customers. There are
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`indications that the situation could change rapidly. For instance, the California Trucking Association
`
`(CTA) has plans to offer competitively priced cellular services to its members. CTA officials feel
`
`confident that in one year after introduction it the new technology will have replaced most of the voice
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`radios in existence today.
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`Many of the systems discussed previously are not well suited for short haul services. Motorola’s
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`CoveragePLUS is uniquely suited for broad regional coverage. Their offering of position reporting and
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`sophisticated software integrated with the fleet dispatch system appeals to some fleets operating, say,
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`within 500 miles or more from their base. Although the technology has true nationwide potential,
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`achieving that potential depends on cooperative, local area, two-way radio systems so it would be difficult
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`to match the comprehensive coverage of satellites. Company officials do not release detailed data. They
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`will only say that they have sold $50 million worth of equipment.
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`Satellite systems are at a disadvantage in short haul operations: their capabilities can be
`
`duplicated by other systems at a lower cost without any reception problems. In addition, they do not
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`offer voice communications. Consequently, most fleets using this technology are in the long haul
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`business.
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`Data communication is common only among large and sophisticated companies, mainly couriers
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`(excluding public safety fleets). Discussions with fleet operators revealed that within the context of
`
`electronic data interchange (EDI) they see a future for data communications between trucks and dispatch
`
`centers, but not necessarily in their own fleets (the general attitude was that voice communications would
`
`be used for many years).
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`The proprietary systems used by couriers and other small package transporters help them achieve
`
`high levels of internal efficiency and customer satisfaction. They consider the information collected
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`locally as part of their product offering.
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`In an advanced system, when a package is picked up all relevant
`
`information (e.g., origin, destination, names of consignor and consignee, value, weight) is transmitted
`
`through a hierarchical computer network to the courier company offices at the destination. This enables
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`load planning at intermediate transfer points, as well as at the destination. During the trip the shipment
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`is continuously tracked. Customers may have access to tracking information through the courier’s
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`tracking system.
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`Although some form of communications system is used by all firms, position reporting systems
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`are not common in short haul operations. This may change with the widespread use of real-time route
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`scheduling and the advent of navigation and route guidance systems. Some fleets have already automated
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`their dispatching operations so that drivers call in, report their status, give their location, and get a new
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`assignment.
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`In a truly dynamic fleet management system, however, the position of the vehicle would be
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`known at all times and would be matched with the demand for services. Such systems are used by public
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`safety fleets (e.g., Detroit Emergency Response System, or DETERS which is jointly used by the police
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`and fire departments of the city).
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`Another application of location reporting technologies, in this case proximity systems, is at
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`interrnodal transfer points (e.g., ports or rail/truck hubs). A truck enters a port, the container it carries
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`is electronically identified and the container inventory database is updated. Problems often mentioned
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`include untagged containers and a lack of common standards. Although an AEI standard was recently
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`adopted, EDI formats used by the different parties at modal interfaces now vary.
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`6.2
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`LONG HAUL OPERATIONS
`
`The line haul trip of an LTL operation is usually between break bulk terminals. Drivers can
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`legally drive up to about 10 hour shifts so the need for positioning and communications is only felt in
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`cases of theft, accidents, or other emergencies. However, at least one large company has installed and
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`uses technologies to respond quickly to shipper requests for quick pick-up and priority deliveries.
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`By contrast, in TL operations the trip may take several days and the routes are often irregular.
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`Because drivers must give regular status reports and obtain new instructions, a communications system
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`with nationwide coverage is needed to provide a continuous link between dispatchers and drivers. Most
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`fleets still use public telephones to communicate with their drivers, sometimes in conjunction with voice
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`radios, pagers, and voice mail systems. This usually means that the driver has to find a telephone, wait
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`in line (most of the drivers call early in the morning), and try to reach the fleet manager whose line may
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`be busy.
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`Wired telephones may be enhanced with nationwide paging and voice mail systems. Cellular
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`phones and other radio systems, such as CoveragePLUS, can be used under certain circumstances but
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`depend on the existence of an extensive ground infrastructure. Only satellites offer comprehensive
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`nationwide coverage. As mentioned, a potential problem is in built-up environments where it may not
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`be possible for the vehicle to continuously maintain a line of sight with the satellite. Although travel in
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`urban areas is a small percentage of total trips, most trips originate and terminate in urban areas.
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`Ideally,
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`a “dual” system would be the ultimate solution. Nevertheless, some fleets have reported fair reception
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`in metropolitan areas.
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`The first adopters of the satellite technology were motivated by the savings in telephone bills and
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`better utilization of equipment. Later, time-sensitive customers who wanted to better manage their
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`logistics flows pushed for the technology. Now, many firms consider the satellite systems a source of
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`competitive advantage (one company claims to compete in its service area with second day air delivery)
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`and an essential business tool. Industry analysts have predicted that soon communications and positioning
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`equipment will be necessary for the success of firms [36].
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`Discussions with fleet operators made it clear that their biggest frustration was trying to integrate
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`data with their dispatch systems or with the increasingly popular on-board computers. Attempts to
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`establish links with EDl systems were also mentioned as a frustration. Most fleets, however, report that
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`the benefits far outweigh any integration problems encountered. Among the benefits as reported in the
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`trade press are:
`
`-
`
`-
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`Long distance phone calls are eliminated resulting in reduced phone bills.
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`Service to time-sensitive customers is improved. Customers see the benefits and strongly push
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`towards the installation of more systems.
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`A carrier gains competitive advantage by offering advanced communications services to its
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`customers. A small firm can continue expanding without abandoning the personal touch in the
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`services it offers.
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`Scheduling flexibility and real time information increase the number of trips per vehicle and
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`reduce the number of empty miles. Carriers operating with trailer to tractor ratios close to l
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`realize immediate benefits.
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`Drivers waste less time waiting at pay phones, sleep more, and earn more money. Many drivers
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`consider the electronic terminal in the cab something of a status symbol. Their satisfaction leads
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`to better labor relations and reduced turnover.
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`Improved driver accountability since drivers know they are not “alone” any more.
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`Increased safety.
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`Vehicle maintenance costs are minimized if vehicle attributes bearing on maintenance are
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`monitored.
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`Shipments of hazardous materials are continuously monitored so in case of accident the necessary
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`actions can be taken. (The federal government has imposed strict reporting requirements for
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`hazardous loads and forbids any unauthorized route deviations.)
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`Similar benefits have been observed in Europe after a series of field trials [35,37].
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`In the U.S. there are about 500,000 trucks travelling more than 200 miles from their base [4],
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`and the satellite system suppliers have sold no more than 30,000 units (April 1991). Therefore, despite
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`the positive experiences, not many fleets use the satellite technology. The following simplified
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`calculations, however, suggest that it might not be difficult to justify the investment (the data were
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`obtained from the references cited, the trade press, and discussions with users):
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`At $4,500 the fixed cost of satellite equipment is about 4.5% of the cost of an average tractor
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`($105,000 [38]). The operating cost which includes tracking service plus message charges is
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`about $50 per month per truck. Total cost is likely to be close to $180 per month per truck when
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`equipment leasing and maintenance costs are included. Figures released by the American
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`Trucking Associations [3 8] indicate that in 1988 per mile tractor-trailer line haul costs were $1.07
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`($1.19 for owner operators). If the drivers saved 2 miles a day by not having to search for a pay
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`phone, in a month savings would be close to system operating costs. Furthermore, a tractor
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`trailer rig is typically driven 10,000 miles a month. A 2 percent reduction of the line haul costs
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`(attributable to the systems) would cover the total system costs.
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`This analysis does not include other benefits such as more efficient equipment use, improved
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`service, and customer satisfaction, which are difficult to quantify. These impacts take time to develop
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`and are not completely under the control of the carrier itself Using an engineering cost model, one study
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`concluded that under certain circumstances a cost reduction of about 8 percent would be feasible [39].
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`Vendors have also completed studies that show the pay-offperiod to be between one and two years, and
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`an estimated annual cost reduction of $2,828 per tractor [40].
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`Trucking fleets and their customers are not the only ones to benefit, however. The Ministry of
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`Transportation in Ontario (instrumental in the design of the vehicle monitoring system employed in
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`Canada) calculated that the Ontario economy would increase GDP by CN$l 10 million and would gain
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`about 2,100 person-years of employment [29]. The calculation was based on a high degree of local
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`manufacturing content.
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`6.3
`
`THE HELP PROJECT
`
`The Heavy Vehicle Electronic License Plate (HELP) project was initiated by highway planners
`
`and managers in Arizona and Oregon who wanted to simplify the data gathering process. Agencies
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`collect data to support highway planning, design, and management, as well as for monitoring the size and
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`weight of trucks, speed limit enforcement, and tax administration. The HELP concept was to deploy
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`emerging electronic technologies at state borders and other locations, in order to create an integrated
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`system that would collect, communicate, store, and process data. The trucking industry, although at first
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`reluctant to participate in the project, was attracted by the prospect of using the data for more efficient
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`fleet management and reduction of reporting expenses at state points of entry.
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`HELP has mainly focused on three technologies: Automatic Vehicle Identification (AVI),
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`Weigh-in-Motion (WIM), and Automatic Vehicle Classification (AVC). Additional technologies have
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`also been investigated to determine whether they would enhance the program (e.g., satellite
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`communications and on-board computers). Vehicles are identified using on-board transponders and
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`roadside readers. The transponder tags are not compatible with the ISO standard used by the container
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`shipping industry, for it was felt that a system with such data collection capabilities was not needed.
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`WIM systems use in-pavement sensors to obtain the axle and gross weights of vehicles travelling at speed,
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`while data for highway management and maintenance are to be provided by AVC systems.
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`In contrast
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`with AVI, neither WIM nor AVC need be standardized as long as they comply to a set of minimum
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`specifications.
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`After detailed technical feasibility studies were completed, the Crescent demonstration phase
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`started involving 14 U.S. states and 1 Canadian province (British Columbia). The name Crescent was
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`given because British Columbia and many of the states participating are located along the west coast and
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`the southern U.S. border inland to Texas, thus forming a crescent. There are approximately 40 equipped
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`sites along Interstates I-5, I-10, and I-20 that will be used in the demonstration and at least 4,000
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`transponder-equipped trucks. Several potential applications have been identified, which are divided into
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`three categories: data collection, enforcement, and vehicle management (Figure 11).
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`The demonstration phase is expected to last until the end of 1992, and it will be followed by a
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`detailed evaluation. At this time no plans exist to deploy the system nationwide if proven successful.
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`One of the issues that has not yet been fully resolved is to whom and under what conditions will the data
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`be accessible. The database will include motor carrier name, address, and license number; vehicle owner
`
`and registration number; and a chronic offender flag and FHWA unsafe carrier flag). A private company
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`has been contracted to manage the Crescent and perform the computer integration work. There seems
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`to be a consensus that an independent organization responsible to both government and fleet operators
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`should administer the system.
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