If the trucking industry, as it stands, wants to make it in the modern world, it’s all about getting with the program. There is going to be no opportunity to carry on doing it like we used to anymore, the world has changed.
As we are so often told, our industry consists of one hell of a lot of small fleets. The number often quoted is 75 per cent of the trucking operators have less than five trucks. We can add to that number a large swathe of fleets with fewer than 100 trucks as well.
Over the past twenty or so years we have seen the rise and rise of the monster fleets. The Toll, Linfox and K&S Freighters of this world have grown and grown. Other fleets have also expanded rapidly and snaffled some large contracts.
The work these big boys have grown with has been with the big players, the Woolies, Coles etc. of this world. The deals have been done and the relationships have worked because it has been corporate talking to corporate. Speaking the same language and having control systems which can communicate together at all time.
The transparency within these contracts is one of the factors they work so well. The customer knows what the transport operator is doing and when the goods are going to arrive. Both the operator and the customer can sit there with a dashboard and see their business relationship at work.
Similarly, the compliance of the fleet has also been transparent enough for the big corporate customer to feel comfortable with their liabilities in the commercial relationship.
All of our thousands of small fleets have been outside of these relationships, brought in as subbies on some of the harder to handle and less well paying sections of these national contracts. This has given the big boys a stranglehold on the economic power in the industry.
Recent developments in technology are starting to look like they have the potential to change that balance of power. We only have to look at the rise of Uber in recent years to see the potential. Here we have thousands of small business, individual car owners who simply download an app and start to work for themselves.
Uber has swept all before it because the apps it has produced give the customer a better service than the taxi firms. There is better transparency and information is freely given, and the price is often half that of a taxi. Of course it wins.
The latest technology coming down the pike has the potential to create a similar seismic change in the trucking industry, if we get it right. There are a few factors which are going to make this kind of change possible.
As we have seen from Uber, small operators using a smart app can take on large entrenched business and win, because the customer gets full transparency and a very competitive price. With the computing power available on the average smart phone or tablet increasing, a network of devices can match the capabilities of the monster mainframes behind the large operators.
At the same time, blockchain is here. I recently sat through an explanation about the power of blockchain and came out confused, but aware of its ability top be a real ‘game-changer’. After the session I was chatting with a wily smaller operator who had picked up a bit more understanding than me. He reckoned blockchain would not only make transparency and payment for loads easier and more visible, but also make compliance issues easier for the smaller operation to demonstrate to the big boys.
There we have it, the technology exists to enable small operators working in concert to take on the biggest and the best. All we need is to start thinking outside the square and use all of this newer, smarter thinking to take on the whole of the freight task and not wait at the side, feeding on a few crumbs from the table.
What we need is a smart program and some real innovative entrepreneurship. The strength of the trucking industry is the innovative thinking in the smaller fleets pushing at the envelope. As NatRoad’s Warren Clark said this week, it’s time to ‘power up’. It’s time to get with the program.