By its very nature, the freight and logistics arena is mobile, so it may come as a surprise that often times, the technology truck drivers and back-office departments use to move goods from point A to point B is far from mobile-friendly.
The pandemic has forced many trucking operations businesses to examine the impact of these legacy processes and, in some cases, has forced firms to make swift adjustments to the way they operate as a result.
According to Vector Vice President Francis Adanza, trucking firms can no longer afford to ignore legacy ways of operation. Indeed, he told PYMNTS in a recent interview, paper and fax remain staples in a sector that continues to face challenges as a mobile industry with a high reliance on collaboration with other players in a single supply chain. While cloud technology adoption is on the rise, there are still key points of friction.
The billing process, for instance, is one of them.
“Traditionally, the way billing is done, the driver delivers their freight, and after proof of delivery or bill of lading is signed by the customer, therefore transferring responsibility of the freight, the truck driver should either have to go to a communal truck stop and fax that back, or compile all of their receipts and physically mail that back to the office,” explained Adanza. “Either scenario is cumbersome to the back office.”
This information must get to the back office in order for an organization to generate an invoice and bill a customer. Yet the continued use of fax machines and paper make this a sluggish operation that can create additional barriers to cash flowing into the accounts receivable (AR) department.
Mobile technologies that address friction points like these must not only be able to digitize operations for a driver on the road, but digitally connect that driver to the home base of the back office. This was among the goals in mind for a recent partnership Vector announced with Transportation Management System (TMS) provider McLeod Software. In their agreement, Vector is integrating its mobile capture technology into the TMS for McLeod’s existing clients to use.
According to Adanza, building mobile-friendly tools that can work with what trucking and other logistics companies already use — rather than forcing them to migrate off one tool and onto another — can ease the friction associated with digitization.
The Pandemic’s Impact
Taking a pause at a communal truck stop to fax documents to the office is far from efficient. But in a pandemic, with many of these stops closed, it’s impossible.
A similar point of friction has been amplified by the pandemic in the area of bills of lading (BOL), said Adanza. The BOL is proof of receipt of freight services, and it is another critical document to ensure the proper players pay and get paid. Yet these documents are often physical and require signatures, a process that similarly becomes difficult at the point of delivery when the shipper, carrier and receiver must all be involved. Social distancing mandates make this an even greater challenge.
Digitizing the BOL has been a recent focus for Vector, said Adanza, pointing to the company’s ongoing pilot of its mobile BOL solution.
“Digitizing that with so many moving parts was complicated, not just logistically, but legally as an eDocument,” he said. “If the carrier can’t pull into the shipper’s terminal and physically interact to abide by social distancing, how can they logistically and legally accept that freight and take it forward?”
Similar conundrums have arisen in the freight and logistics space as it works to manage incredible supply chain volatility and pressure for goods to continue moving. Like many firms, however, the challenge can be presented as an opportunity for trucking firms to digitize, connect drivers and back offices via mobile tools, and ultimately accelerate the flow of cash.
“The business benefits have been there all along,” added Adanza, “but the pandemic has highlighted some of these inefficiencies.”