Why Now is the Time for Fleets to Prepare for Transformation

The last few years have been a rollercoaster for the trucking industry, with the Covid-19 pandemic sending the typical freight cycle into unprecedented territory. But now may be the perfect time to prepare your company to be ready, not only for the next freight upswing, but also to take advantage of exponential changes in technology.

That was the message from two speakers at the McLeod 2023 User Conference in Phoenix Sept. 18.

In a keynote address, global futurist Daniel Burruss said there are two kinds of change.

Cyclical change, like the economy or the freight cycle, can be used by companies to their advantage.

He shared an example of the owner of a marine business whose sales dropped to nearly nothing during a recession. The owner went all in on a bet based on the economic cycle and built a new manufacturing plant, so when the recession ended the business was able to meet the upswing in demand.

The other kind of change, he said, is linear/exponential change. “Once you get a smartphone, you’re not going to go back to a dumb phone,” he said as an example. Smart businesses look to where the opportunities are in this kind oof change to stay ahead.

Cyclical Change: Time for a Tune-up

Cyclical change was the main focus of the opening session speech by McLeod founder and chief executive Tom McLeod.

With economists both inside and outside of trucking predicting flat to slow growth well into next year, he said, fleets should use this slower time to give their operations a tune-up so they’ll be ready to take advantage of the next upturn in the freight cycle.

It looks like the recession that was a concern last year is not materializing, with trucking economists seeing flat to 2% growth for the rest of this year and well into 2024. Freight’s coming back a little, jobs are still growing, and inflation appears to be cooling.

“OK, it feels kind of soft,” he admitted. “It’s not 2021, it’s not 2018,” he said, referring to recent boom years, “But when things are stable, it’s a great time to get things done, a wonderful time to work on your business and be prepared for when stronger growth comes back.”

It’s time for a tune-up, he said, noting that when an engine needs a tune-up, it loses efficiency, loses, power, and may not last as long.

“I’ve seen people who wouldn’t allow an engine in the fleet to run rough, but they put up with all kinds of things in their business” that have similar effects to an engine that’s not at its peak.

“There are two ways to react when things slow down,” McLeod said: Hunker down, or make the best of the situation and get things set for when things pick up.

When freight picks back up, he said, “Company A who hunkered down is coming from a cold start.” Company B, which took advantage of the slow time to improve, is ready to go and has an opportunity then to pull ahead of the competition.

McLeod offered suggestions for ways fleets can use this soft time to help fleets be ready to burst out of the gate when the time comes.

Get Educated on New Technologies

Although the rollout of technologies such as zero-emissions vehicles and autonomous vehicles will be slow, McLeod said, eventually they will affect your business, “and if you’re not doing it, it’s likely your competition will.”

These are examples of the kind of linear/exponential change Burruss discussed.

McLeod suggested, for instance, with electric trucks, investigate whether there’s an application in your operations that would be a fit. Learn about the local charging infrastructure situation. Talk to your suppliers, to the truck makers.

While autonomous trucks seem further down the road than electric, McLeod pointed out that there are already trucks, albeit with safety drivers, operating in a number of lanes.

And closer on the horizon, it’s a good time to investigate how state EV mandates and 2027 EPA emissions regulations are likely to affect your buying cycle.

In a follow-up session with trucking journalists, McLeod offered thoughts on what these emerging technologies mean from a data management standpoint. The company has been working with autonomous-truck developers on this question, and opening some eyes in the autonomous industry to some of the real-world operational changes.

For instance, most developers see a hub-to-hub model where autonomous trucks operate on interstate highways. But, McLeod said, there has to be a human driver at either end of that run, and that driver has to get paid, you have to track all three legs of that delivery, and the customer has to be billed.

Mark Cubine, McLeod VP of marketing, noted that about a year ago, the McLeod team worked with an autonomous-truck company to create a data flow diagram for a hypothetical autonomous truck operation — all the touchpoints, all the events to be linked, all the things to be communicated.

“It wasn’t anything exotic for us, but for them, it was an interesting exercise.”

Unlock Your Treasures

With business not quite so urgently busy, McLeod said, it’s a good time to really explore areas of your business where you can make adjustments that would make you more profitable, including:

• Back office automation.
• Pricing discipline: “Make sure you’re understanding what’s happening in the market, rates by lane, so you don’t leave money on the table.”
• Look at your customers and network. There may be some lanes that aren’t profitable because of a lack of available backhauls.
• Planning and driver management: Make sure it’s being done in real time.

There quite likely are tools and features in what you already have that can help you in this regard.

Burruss said it’s important from an individual and company perspective to examine how you can be more efficient.

“What are things you don’t need to be doing anymore? Is there a tool to do that?”

He pointed out that in Microsoft Word, there are 4,000 features you can select. Yet most people use a handful. “But you’ve paid for all 4,000.”

The same is true of trucking-specific software. For instance, McLeod sad, “I suggest somebody run every single report on the menu. I guarantee there’s reports in the system you don’t even know about.”

Identifying and Taking Advantage of ‘Hard Trends’

Burruss built on the theme of spending time to figure out how to transform your business. Change comes from without, he said; transformation comes from within.

“Hope is not a strategy,” he said. “My biggest worry for you is you’re really busy doing what you’ve always done. Today, you can busy yourself right out of business.”

There’s an old saying that if you keep doing what you’ve always done, you’ll get what you’ve always gotten. That’s no longer true, Burruss said.

“If you do what you’ve always done, you’ll get much less than you always have, because the world’s changing.”

The pandemic drove change growth beyond exponential levels, he said, in areas such as e-commerce, remote work, tele-education, online learning, telemedicine and cloud services.

“When you have technology expanding at an exponential rate, you’re looking at exponential opportunities,” he said. “You don’t want to squander this amazing moment in time.”

To take advantage of these opportunities, he said, requires a change in mindset, becoming anticipatory rather than reactionary, anticipating disruption, problems, and opportunities.

But how can we do that? There’s so much uncertainty. Burruss said to start with things we are certain about.

For instance, he said, “the future is all about relationships.” You can be certain that you never want people to distrust your company. So before you implement something new in this way, ask yourself what will happen to trust? If you don’t like the answer you may want to rethink how you are implementing the change.

Hard Trends vs. Soft Trends

Burruss explained that there are two types of trends. Hard trends are those based on future facts. Soft trends are based on assumptions that may or may not happen.

“Hard trends allow you to see the future. Soft trends allow you to change things” to influence whether or not or how they come about.

He gave three examples of categories of hard trends.

1. Demographics

Baby Boomers are getting older. That’s a hard trend. So is the fact that many of them in your company will probably be retiring soon. A soft trend would be that those people will take their knowledge and wisdom with them. That’s something you could do something about. “Build a wisdom base,” Burruss said.

At the same time, he said, if you’re having a meeting and it’s all Baby Boomers, that sends a message to younger workers that they can’t make a difference in the company until they get old. Cherry-pick people from those younger generations to be involved.

2. Government Regulations

You can predict some regulations; you just can’t predict them all, Burruss said. For instance, few would argue with a hard trend that we will see some type of cybersecurity regulations.

3. Technology

Hard trends regarding increasing use of technology are “perhaps the most powerful,” Burruss said, throwing out a slew of examples, such as:

• The datafication of everything. “There’s a tsunami of data coming,” he said.
• Embedded AI and machine learning. We will see artificial intelligence embedded into our devices on the chip level, he said.
• On-demand 3D printed parts
• Use of generative AI like ChatGPT
• AI-enhanced supply chain
• Streaming data analytics
• Use of augmented thinking (people using AI)

“The supply chain is becoming the supply brain,” he said.

Burruss challenged the audience to go back to their businesses and commit to spending one hour a week stepping away from crisis management and instead work on ways you can take advantage of trends and opportunities to transform your business,

Spend time identifying hard trends and related opportunities; soft trends and opportunities you have to influence them; identify predictable problems and ways to solve them.

Then, he said, prioritize the top two off that list as “must do” and take action.