Trucking Logistics and Dispatch Services. Vincent P. Corrao Northwest Timber Logistics

Transcription

1 Trucking Logistics and Dispatch Services Vincent P. Corrao Northwest Timber Logistics

2 Why Manage Transportation Logistics? Cost of log transportation will continue to escalate and hauling capacity is limited, managed logistics can: Maximizes fleet hauling capacity Minimizes miles driven Reduces fuel consumption 30-40% of the delivered log costs is transportation Difficult to obtain hauling capacity with the very poor financial returns from current log trucking systems and growing demand Limited incentives to attract a younger work force into transportation 2

3 Why is Forestry Logistics so Important? Operations run with very low efficiency Excessive idling Speeding/Accelerating Under/over weight Questionable operating habits/customs Routing Buddy hauling Highly constrained harvest and haul closed loop Early start times which can lead to injuries, fatalities and rising insurance costs Low investment in developing professional drivers Low investment in modern equipment and innovation No consolidated effort to perform large-scale collaborative managed transportation logistics 3

4 What s at Stake? Every 0.1 loads delivered per day improvement can improve a single truck s net cash earnings over a year by >$2000. Every five extra operating days in a year can improve a single truck s net cash earnings (daily fixed costs savings) over a year by >$1500. Log haul costs excluding stumpages are 30-42% of the costs of logs delivered to customers. While logging productivity (tons per person per hour produced) in the Inland West continues to improve by 2-3% per annum, real gains in trucking productivity have been negligible for decades. In 2015 Idaho harvest alone required 170,000 plus load trips. As the nation s and Idaho s timber harvest increase, where will the trucking capacity come from? 4

5 Collaborative Logistics is a Strategic Initiative Effective Visibility, Control & Reporting provide a key to optimizing Supply Chain performance Maximize supply chain returns More productive hauling Increase truck earnings Control haulage cost Avoid Wood flow slippage Customer service excellence Resolve security & traceability of loads Confidence in the model and processes for both the contractors and shipper Timber Supply Visibility Performance Reporting Controlled Logistics 5

6 Log Truck Industry Survey Report (2008): The Log Trucking Industry: Costs and Safety Analysis - Cooperative report by WSU and UW Notable findings: Average age of log truck drivers is 55 years Average driver experience is 27 years 64% of trucking companies are owner-operators ( Gypos ) 87% of respondents report it s difficult to find and keep skilled drivers 28% of log hauling companies lost money 50% broke even 21% made a profit When respondents were asked to rate the business environment: 83% poor 17% average 0% selected good they didn t like the industry even without dispatch 6

7 Current/Recent Use of Managed Logistics and Centralized Dispatch Chile New Zealand Australia Ireland Canada South Africa Sweden/Finland United States 7

8 Some Available Technology Support Systems Trimble Forest Logistics and Optimization (FLO) System (USA) Asset Forestry WSX Logistics (New Zealand acquired by Trimble Sept 2013) ASICAM/ForesTruck (Chile) FastTruck (Australia) ORTEC routing optimization system (USA) ArcGIS Network Analyst (USA) 8

9 Background of Managed Logistics in Idaho 2008 NMI met with industry managers in Idaho 2009 NMI researched various dispatching operations in the U.S. and around the world. Asset Forestry Logistics (New Zealand based company) 2010 Idaho Forest Group agreed to conduct the first transportation study to identify potential opportunities for efficiency gains 2011 Potlatch implemented a second benchmark study 2012 Potlatch, IFG, Stimson & Hancock conducted a pilot study in cooperation with logging and trucking contractors 9

10 Scope of Benchmark Studies A goal of these studies was to sample a cross-section of contract logging and trucking fleets IFG 2010 Study Potlatch 2011 Study Logging Contractors: 8 Trucking Contractors: 33 Number of Trucks in Trial: 53 Total Loads Delivered: 1340 Average loads per truck: 2.18/day Logging Contractors: 7 Trucking Contractors: 36 Number of Trucks in Trial: 120 Total Loads Delivered: 3537 Average loads per truck: 2.30/day 10

11 Results of Benchmark Studies Both IFG and Potlatch studies had very similar results Trucks worked for one logging company at a time Found many hours spent waiting on the job Trucks ran an average of 47.7% loaded Potential Gains Using Managed Logistics and Centralized Dispatch Reduced waiting time on job Loaded miles could be increased by 3-5% Increase number of days worked Reduced deadheading miles by utilizing jobs near trucks home locations Provide live load detail information to contractors 11

12 Scope of Managed Logistics and Central Dispatch Pilot 2012 Potlatch, Idaho Forest Group, Stimson and Hancock identified 2 logging contractors each to participate in the pilot project with their associated trucks 57 trucks equipped with PDT s and high band radios 16 loaders equipped with high band radios to communicate with dispatch Trucks were offered and received contracts from various mills, forest companies, and logging contractors for hauling Dispatch began August 6 th with a business as usual period In September, dispatch began scheduling trucks and assigning loads resulting in a 5% gain in the number of loads moved compared to benchmark studies 12

13 Northwest Timber Logistics (NTL) Operations in the Pacific Northwest Managed logistics and daily truck dispatching has been live in NE Washington for Hancock since November Hancock is in the process of including some N. Idaho logging contractors into the system. Servicing between 6 and 10 crews Planning and dispatching a fleet of up to 35 trucks Looking to bring managed logistics to other areas throughout the PNW 13

14 Challenges to Adoption Spatial arrangements of sources and destinations (landings and mills) Contracting structures Who will operate the system? How to prorate costs and savings? Communications between Logging and hauling Contractors Contract directly with trucking contractors Technological challenges Communications with trucks cell/radio Communications with Loaders/radio satellite phones Inter company operability and opportunities Updating and repairing the schedule 14

15 Cultural Challenges Been doing it the same way for years with success No need to change Logging contractors wary of losing control of log shipments Loader /Driver relationships Apprehensive towards new technology-based culture Drivers wary of being monitored and working with certain logging contractors Different business structures need flexible system 15

16 Benefits to Trucks Increase in loads per day in the same hours Fewer empty miles Increase number of days working Decreased waiting time on job Avoid delays at mills Greater opportunity to change plan during breakdowns Haul rates are seen up front through signed contracts Access to load detail information through web-reporting Payments are timely and accurate directly with trucking Company 16

17 Benefits to Logging Contractors More time to focus on primary business logging Eliminates contract negotiation with log truck drivers Eliminates scheduling log truck drivers Improved inventory management of stocks on the landing Floating truck fleet available with varying hauling needs Assures delivery requirements will be met when trucks break down and during peak haul periods Overstocked landings will remain clean/organized Commitment that your delivery requirements will be met particularly when moving Improved information and planning 17

18 Benefits to Landowner Competitive haul rates based on data Ensured trucking capacity Tracks productivity and metrics on hauling cost and efficiencies Security and traceability of loads Reduced management and administrative cost Live load detail information available on the web Reporting: loads delivered to each mill, by date with associated volumes 18

19 Questions Providing A Balanced Approach to Resource Management