Dynamic Routing, Zone Jumping, Commercial Pick & Pack, Dedicated Drop Units, Paperless Operations, and New Federal Fuel Regulations for Trucks
NATIONAL HARBOR, Maryland (March 16, 2014) – The Matheson Flight Extenders management team analyzes current issues and new developments to determine their impact and potential benefit for the transport industry and the U.S. Postal System. Here are some company perspectives on emerging trends.
“There are several innovative methodologies on the horizon, or currently in development, that have real potential for improving operational efficiency,” said Glen Gates, President of Matheson Flight Extenders. “Our mission and responsibility is to carefully examine new ideas. We owe it to ourselves and our customers to see if these methods will truly lead to better outcomes for all concerned.”
For example, dynamic routing is being considered as a future model for the U.S. Postal Service and its suppliers as a way to save time and money. Now, before a vehicle leaves its starting point, an initial route plan is established between predetermined sites. Instead of fixed, scheduled routes, dynamic routing can assist a carrier in combining loads along the way so that the truck may add or delete scheduled stops depending on demand, if new requests appear, the initial route is adjusted to fulﬁll them.
The ability to redirect a moving vehicle to other nearby destinations to drop or pick up non-scheduled loads can produce savings in the transportation network. However, it requires real-time knowledge of the vehicle’s location and for dispatchers to communicate quickly with drivers in order to reassign them. Adding or reducing transportation capacity each day, based on that day’s demand, is complex — yet do-able — if the originating terminal can adjust the front end of the supply chain to produce the loads in a timely manner. Scheduling capacity in a dynamic environment means dispatchers, shippers and consignees, have to be flexible.
“While the prospect of achieving cost efficiencies exists in theory, the real question is will logistics associated with preparing shipments for transport be fulfilled at pickup points before the truck arrives, so on-time performance is not jeopardized. Think back to the days of rail mailbag pickup. The train did not stop but used a hook to grab a hanging sack at each station without a delay. The mail bag had to be on that pole at the precise time the train passed or it continued on its way to stay on schedule.” Mr. Gates said. Theory suggests that dynamic routing can be used both ways, but if a returning truck is behind schedule, it would probably not be in position to make the next trip.”
“Consider a 1,650 mile run each way from Denver to Newark involving highly variable travel times, traffic and weather conditions. Both ends, and all divergent points in between, must be ready to go on short notice to overcome the complexities of this optimization technique. Much research has been done that suggests the promised efficiencies of dynamic routing will be realized.”
According to Mr. Gates, commercial mailers leverage USPS’s flexibility by transporting skidded, pre-addressed bulk mail dropping shipments within the USPS network.
Zone Jumping, or the ability to take advantage of lower rate transport across multiple postal zones, is on the rise as hundreds — if not thousands — of companies and carriers have adopted it.
Using Dedicated Drop Units (DDU), fully processed mail is collected and dropped at the closest point to the end customer. Instead of paying full retail postage per piece from Northern California to Detroit, for example, a company can truck mail to a DDU, stack multiple pre-sorted mail on a skid at a reduced rates for each piece.
Commercial carriers, such as DST (the largest mailer of first class letters), use large distribution warehouses to receive raw materials, stuff envelopes, print labels, assign destination addresses and consolidate pre-sorted mail on a pallet for tender to USPS.
“Matheson has sorting, processing and material handling centers around the country with the capacity to perform these functions on an incremental basis. We want to be the single point of contact that also trucks mail loads and takes them to the airport or the DDU,” Mr. Gates said. “With such a partnership, there would be no weak link in the chain, no subcontractors, brokers and other third-parties to increase risks.”
Going paperless is another increasing industry trend. At Matheson, package scanning, claims for loss and damages, along with payment transaction data, are paperless today. The company is actively seeking ways to eliminate more paper in other operational sectors as well.
The latest trend issue that will affect the trucking industry in the future was announced on February 19 when President Obama ordered the development of stringent new fuel standards for the nation’s fleet of heavy-duty trucks as a way to cope with climate change and limit carbon emissions. He said these large trucks account for four percent of all vehicles on U.S. highways but generate 20 percent of the carbon pollution produced by the transportation sector.
“While the president said improving gas mileage for these trucks will further drive down oil imports and cut business fuel costs over the long term, it remains to be seen whether these new regulations will produce desired effects. Truck manufacturers have lobbied against increases in federal fuel economy standards saying they could hike vehicle prices and reduce safety. Implementation of these changes may still be a year or more away, but the real concern is whether they will increase truck costs and operating expenses in the short run leading to reduced margins and put upward pressure on carrier rates at a time when the industry is striving to glean incremental revenue by finding ways to reduce costs across the board,” Mr. Gates said.
Established in 1972, Matheson Flight Extenders provides a comprehensive range of ground support and terminal handling services to its customers. MFE has 560 employees, a co-owned fleet of 300 company operated trucks and 1,200 pieces of package handling equipment kept in good condition at the company’s network of 11 wholly owned fleet maintenance shops centrally located in California, Colorado, Idaho, Utah, and Washington State. MFE has secure on-airport operations in 18 U.S. cities, including Albuquerque, Anchorage, Billings, Boise, Cincinnati, Denver, Great Falls, Las Vegas, Louisville, Phoenix, Portland, Reno, Sacramento, Salt Lake City, Seattle, Spokane, Sioux Falls and Tucson.