The commercial trucking industry is one that has been operating upon data for decades.
The legacy tools of the electronic logging device (ELD) and telematics are important ones that can track the behavior of vehicles and drivers to not only optimize operational efficiency, but also remain compliant with ELD regulatory requirements.
The sector is sitting upon troves of valuable data as modernization enhances telematics and Internet of Things (IoT) capabilities, yet Ram ChandraSekar, founder and CEO of PhaseZero Ventures, said the commercial trucking space is far from digitally transformed.
Shipments are still delayed, supply chain bottlenecks still exist, and unexpected breakdowns remain a headache. Unfortunately, so far, the heavy duty trucking industry hasn’t yet fully bridged the gap between telematics data and operational optimization, but as ChandraSekar told PYMNTS, there is an opportunity for digital commerce to both make valuable use of industry data, and potentially even usher in an entirely new business model for the sector.
“The commercial transportation industry is one of the most challenged industries,” he said, pointing to government regulations around ELDs and hours of operation, fuel economy volatility, and overall friction in technological adoption.
And yet, “if we only do incremental improvements, the industry is not going to survive,” he warned.
A Data Treasure Trove
IoT-connected vehicles and other sources of rich data have the potential to enhance the predictability of when vehicle service will be necessary, allowing truck drivers and fleet managers to plan ahead when procuring service and parts. The ability to foresee any downtime can greatly limit its negative impact on the supply chain, and through digital eCommerce, any data integration between a vehicle and a fleet department’s purchasing workflows can add boosted efficiency.
But the opportunity goes beyond service level predictability, said ChandraSekar.
“The one thing [commercial trucking companies] want to accomplish is reliably predict downtime, reliably improve the uptime, and predict and manage the overall cost of operation,” he said. “That’s what the data economy is all about.”
In a market climate created by the pandemic, this data can be used to adjust transportation strategies at a broader level. With the ability to predict maintenance requirements, entities can ensure that products will be at the correct repair shop at the time and location necessary — a significant change from the way things are done today.
“How is it going to be an Amazon experience?” said ChandraSekar of the B2B eCommerce need in this sector. “The transportation industry is nowhere near close to that because people still pick up a phone, or send that email out, or a fax. And most importantly, they drive to the store.”
With store closures continuing and more people shopping online, the need for a digital commerce solution to have parts at the ready becomes even more valuable.
Driving A Business Model Shift
These legacy processes are not using the powerful data of telematics to professionals’ advantage, but migrating trucking and fleet teams to the digital age remains a challenge.
While ChandraSekar said it is vital for organizations to take a crawl-walk-run approach to modernization, it’s time that the sector receives a digitization boost. That pursuit of the Amazon-like experience not only extends to commerce and procurement, but also to B2B payment habits, particularly as a younger generation that grew up with Apple Pay and Facebook enter the workforce.
It’s only a matter of time that this workforce demands a migration away from the purchase order and toward seamless digital payments, as well as the shift away from legacy procurement methods and toward a commerce strategy that supports higher-value goals of reducing downtime of vehicles as much as possible.
The future of commercial vehicle maintenance will be driven by digital payments and search engines, said ChandraSekar, and major changes are ahead.
“I could be 100 percent wrong, but I believe the business model is about to change,” he predicted. “It might take two years or 20 years, but it is going to change. For the first time, internet connectivity, computing storage and the cloud are extremely cheap and accessible to everybody. But the data-driven business model is least understood by the commercial transportation world.”