Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Can you answer these questions: Exactly how much do you spend on your lift truck fleet each year? How much do you spend on each truck? In an eight-hour shift, how much time does each truck actually spend moving product? Are trucks sitting idle in your facilities "just in case"?
If you can't come up with the answers, you're not alone. Specialists in lift truck fleet management report that a surprising number of DC managers are unable to provide a detailed accounting of their fleet costs and usage patterns. Yet knowing the answers to those questions is especially important these days, and for a very simple reason: Managers are under intense pressure to control their industrial truck fleet expenses. But in order to manage these costs, they first have to know what they're spending.
It comes as no surprise, then, that customers are turning to providers of fleet management services to help them make the most of their assets. Sales of new trucks may be down, but vendors say they're seeing an upswing in demand for systems and services that collect and analyze lift truck data.
"We know that buyers are not buying, but that doesn't mean purchasing [executives] and CFOs aren't looking at what they're spending," observes Michael McKean, manager of fleet marketing and sales for lift truck maker Toyota Material Handling USA.
This pressure from the top has led companies that previously resisted investing in fleet management tools to reconsider, says Scot Aitcheson, director of fleet management for Yale Materials Handling, which manufactures a broad line of industrial trucks. "I can tell you that consistently, customers ... want to be engaged, and they want visibility. They need to have data. They are really making what they do more scientific."
These days, more and more DC and fleet managers are feeling the heat, vendors say. "With the economy the way it is, a lot of warehouses and DCs, especially in the home improvement and retail sectors, have felt a lot of pressure to cut down on overhead, reduce maintenance costs, and reduce fleet costs overall," says Joe LaFergola, manager of business and information solutions for lift truck manufacturer Raymond Corp.
Shock and audit
The first step in any cost-cutting initiative is to gather detailed data across all facets of the operation. There are two ways to approach this task. One option is to bring in fleet management specialists, either independent consultants or experts affiliated with industrial truck dealers. The other is for DCs to take on the task themselves, using vehicle management systems that collect and analyze operating data. These systems typically include a device installed on each truck that captures information and transmits it to fleet management software, which then produces a variety of reports. (For more on these systems, see "remote control," September 2008.)
Typically, data analysis begins with on-site audits that track truck operations over 30 to 90 days—long enough to provide an accurate picture of how individual trucks are being used and how the fleet as a whole is performing. The object is to create a baseline against which specific savings can be measured.
With accurate data in hand, managers can identify areas that are ripe for improvement. They can determine which trucks have the highest maintenance costs, figure out if the fleet is correctly sized and if the equipment is appropriate for the job, measure drivers' productivity, and track causes of avoidable maintenance and additional costs (like damage caused by operators to product, racks, and the trucks themselves).
The results of these audits sometimes come as a shock to managers, vendors say. In a white paper titled 5 Ways to Reduce Costs of Your Industrial Vehicle Fleet, I.D. Systems, a developer of vehicle management systems, cites data showing that in an eight-hour shift, a truck typically is in motion for just two hours and is moving a load for only one.
And that's just the tip of the iceberg. Aitcheson says—and other fleet specialists agree—that it's not uncommon for these audits to show that a given fleet is 20 percent (or more) larger than necessary. Nor is it unusual to find short-term rental vehicles on the floor for months at a time. Aitcheson even tells of one customer that spent $27,000 in a single year on maintenance for a seven-year-old truck.
Such ignorance is certainly not bliss. In fact, it's downright expensive, says Stan Garrison, manager of fleet sales for Hyster Co. "There's no point in hanging onto a truck past its useful economic life," he says. "That drives up ownership costs and productivity costs because of downtime."
One step at a time
Collecting the information needed to analyze fleet costs is one thing. Using the data to make changes in fleet operations and driver behavior is quite another. Despite the obvious benefits, it's not always easy to get everyone on board. McKean says that when it comes to "selling" a fleet downsizing program to operations managers, the key is having accurate performance data in hand. "If we can prove utilization is high and the fleet is up and running every day, then perhaps some trucks can go away," he says.
An effective cost-cutting program does not necessarily require jumping in with both feet. There's nothing wrong with taking it one step at a time, says Aitcheson. "For a company that wants to pursue [a fleet cost-reduction program] but does not want to commit to all the processes and procedures, it could be as simple as a national preventive maintenance program," he says.
Garrison is of the same mind. He notes that getting rid of older trucks in stages can help overcome managers' fears that a downsizing program will disrupt day-to-day operations. "One of the most difficult things we [deal with] is to get a buy-in from operations," he says. "The floor managers' job is to get stuff out the door, and it takes a little bit of time to earn their trust and let them know we're not just going to leave them hanging out there."
Editor's note: For more information on conducting a lift truck fleet audit, see "lean fleets," February 2009.
As a contract provider of warehousing, logistics, and supply chain solutions, Geodis often has to provide customized services for clients.
That was the case recently when one of its customers asked Geodis to up its inventory monitoring game—specifically, to begin conducting quarterly cycle counts of the goods it stored at a Geodis site. Trouble was, performing more frequent counts would be something of a burden for the facility, which still conducted inventory counts manually—a process that was tedious and, depending on what else the team needed to accomplish, sometimes required overtime.
So Levallois, France-based Geodis launched a search for a technology solution that would both meet the customer’s demand and make its inventory monitoring more efficient overall, hoping to save time, labor, and money in the process.
SCAN AND DELIVER
Geodis found a solution with Gather AI, a Pittsburgh-based firm that automates inventory monitoring by deploying small drones to fly through a warehouse autonomously scanning pallets and cases. The system’s machine learning (ML) algorithm analyzes the resulting inventory pictures to identify barcodes, lot codes, text, and expiration dates; count boxes; and estimate occupancy, gathering information that warehouse operators need and comparing it with what’s in the warehouse management system (WMS).
Among other benefits, this means employees no longer have to spend long hours doing manual inventory counts with order-picker forklifts. On top of that, the warehouse manager is able to view inventory data in real time from a web dashboard and identify and address inventory exceptions.
But perhaps the biggest benefit of all is the speed at which it all happens. Gather AI’s drones perform those scans up to 15 times faster than traditional methods, the company says. To that point, it notes that before the drones were deployed at the Geodis site, four manual counters could complete approximately 800 counts in a day. By contrast, the drones are able to scan 1,200 locations per day.
FLEXIBLE FLYERS
Although Geodis had a number of options when it came to tech vendors, there were a couple of factors that tipped the odds in Gather AI’s favor, the partners said. One was its close cultural fit with Geodis. “Probably most important during that vetting process was understanding the cultural fit between Geodis and that vendor. We truly wanted to form a relationship with the company we selected,” Geodis Senior Director of Innovation Andy Johnston said in a release.
Speaking to this cultural fit, Johnston added, “Gather AI understood our business, our challenges, and the course of business throughout our day. They trained our personnel to get them comfortable with the technology and provided them with a tool that would truly make their job easier. This is pretty advanced technology, but the Gather AI user interface allowed our staff to see inventory variances intuitively, and they picked it up quickly. This shows me that Gather AI understood what we needed.”
Another factor in Gather AI’s favor was the prospect of a quick and easy deployment: Because the drones can conduct their missions without GPS or Wi-Fi, the supplier would be able to get its solution up and running quickly. In the words of Geodis Industrial Engineer Trent McDermott, “The Gather AI implementation process was efficient. There were no IT infrastructure or layout changes needed, and Gather AI was flexible with the installation to not disrupt peak hours for the operations team.”
QUICK RESULTS
Once the drones were in the air, Geodis saw immediate improvements in cycle counting speed, according to Gather AI. But that wasn’t the only benefit: Geodis was also able to more easily find misplaced pallets.
“Previously, we would research the inventory’s systemic license plate number (LPN),” McDermott explained. “We could narrow it down to a portion or a section of the warehouse where we thought that LPN was, but there was still a lot of ambiguity. So we would send an operator out on a mission to go hunt and find that LPN,” a process that could take a day or two to complete. But the days of scouring the facility for lost pallets are over. With Gather AI, the team can simply search in the dashboard to find the last location where the pallet was scanned.
And about that customer who wanted more frequent inventory counts? Geodis reports that it completed its first quarterly count for the client in half the time it had previously taken, with no overtime needed. “It’s a huge win for us to trim that time down,” McDermott said. “Just two weeks into the new quarter, we were able to have 40% of the warehouse completed.”
The less-than-truckload (LTL) industry moved closer to a revamped freight classification system this week, as the National Motor Freight Traffic Association (NMFTA) continued to spread the word about upcoming changes to the way it helps shippers and carriers determine delivery rates. The NMFTA will publish proposed changes to its National Motor Freight Classification (NMFC) system Thursday, a transition announced last year, and that the organization has termed its “classification reimagination” process.
Businesses throughout the LTL industry will be affected by the changes, as the NMFC is a tool for setting prices that is used daily by transportation providers, trucking fleets, third party logistics service providers (3PLs), and freight brokers.
Representatives from NMFTA were on hand to discuss the changes at the LTL-focused supply chain conference Jump Start 25 in Atlanta this week. The project’s goal is to make what is currently a complex freight classification system easier to understand and “to make the logistics process as frictionless as possible,” NMFTA’s Director of Operations Keith Peterson told attendees during a presentation about the project.
The changes seek to simplify classification by grouping similar items together and assigning most classes based solely on density. Exceptions will be handled separately, adding other characteristics when density alone is not enough to determine an accurate class.
When the updates take effect later this year, shippers may see shifts in the LTL prices they pay to move freight—because the way their freight is classified, and subsequently billed, could change as a result.
NMFTA will publish the proposed changes this Thursday, January 30, in a document called Docket 2025-1. The docket will include more than 90 proposed changes and is open to industry feedback through February 25. NMFTA will follow with a public meeting to review and discuss feedback on March 3. The changes will take effect July 19.
NMFTA has a dedicated website detailing the changes, where industry stakeholders can register to receive bi-weekly updates: https://info.nmfta.org/2025-nmfc-changes.
Trade and transportation groups are congratulating Sean Duffy today for winning confirmation in a U.S. Senate vote to become the country’s next Secretary of Transportation.
Once he’s sworn in, Duffy will become the nation’s 20th person to hold that post, succeeding the recently departed Pete Buttigieg.
Transportation groups quickly called on Duffy to work on continuing the burst of long-overdue infrastructure spending that was a hallmark of the Biden Administration’s passing of the bipartisan infrastructure law, known formally as the Infrastructure Investment and Jobs Act (IIJA).
But according to industry associations such as the Coalition for America’s Gateways and Trade Corridors (CAGTC), federal spending is critical for funding large freight projects that sustain U.S. supply chains. “[Duffy] will direct the Department at an important time, implementing the remaining two years of the Infrastructure Investment and Jobs Act, and charting a course for the next surface transportation reauthorization,” CAGTC Executive Director Elaine Nessle said in a release. “During his confirmation hearing, Secretary Duffy shared the new Administration’s goal to invest in large, durable projects that connect the nation and commerce. CAGTC shares this goal and is eager to work with Secretary Duffy to ensure that nationally and regionally significant freight projects are advanced swiftly and funded robustly.”
A similar message came from the International Foodservice Distributors Association (IFDA). “A safe, efficient, and reliable transportation network is essential to our industry, enabling 33 million cases of food and related products to reach professional kitchens every day. We look forward to working with Secretary Duffy to strengthen America’s transportation infrastructure and workforce to support the safe and seamless movement of ingredients that make meals away from home possible,” IFDA President and CEO Mark S. Allen said in a release.
And the truck drivers’ group the Owner-Operator Independent Drivers Association (OOIDA) likewise called for continued investment in projects like creating new parking spaces for Class 8 trucks. “OOIDA and the 150,000 small business truckers we represent congratulate Secretary Sean Duffy on his confirmation to lead the U.S. Department of Transportation,” OOIDA President Todd Spencer said in a release. “We look forward to continue working with him in advancing the priorities of small business truckers across America, including expanding truck parking, fighting freight fraud, and rolling back burdensome, unnecessary regulations.”
With the new Trump Administration continuing to threaten steep tariffs on Mexico, Canada, and China as early as February 1, supply chain organizations preparing for that economic shock must be prepared to make strategic responses that go beyond either absorbing new costs or passing them on to customers, according to Gartner Inc.
But even as they face what would be the most significant tariff changes proposed in the past 50 years, some enterprises could use the potential market volatility to drive a competitive advantage against their rivals, the analyst group said.
Gartner experts said the risks of acting too early to proposed tariffs—and anticipated countermeasures by trading partners—are as acute as acting too late. Chief supply chain officers (CSCOs) should be projecting ahead to potential countermeasures, escalations and de-escalations as part of their current scenario planning activities.
“CSCOs who anticipate that current tariff volatility will persist for years, rather than months, should also recognize that their business operations will not emerge successful by remaining static or purely on the defensive,” Brian Whitlock, Senior Research Director in Gartner’s supply chain practice, said in a release.
“The long-term winners will reinvent or reinvigorate their business strategies, developing new capabilities that drive competitive advantage. In almost all cases, this will require material business investment and should be a focal point of current scenario planning,” Whitlock said.
Gartner listed five possible pathways for CSCOs and other leaders to consider when faced with new tariff policy changes:
Retire certain products: Tariff volatility will stress some specific products, or even organizations, to a breaking point, so some enterprises may have to accept that worsening geopolitical conditions should force the retirement of that product.
Renovate products to adjust: New tariffs could prompt renovations (adjustments) to products that were overdue, as businesses will need to take a hard look at the viability of raising or absorbing costs in a still price-sensitive environment.
Rebalance: Additional volatility should be factored into future demand planning, as early winners and losers from initial tariff policies must both be prepared for potential countermeasures, policy escalations and de-escalations, and competitor responses.
Reinvent: As tariff volatility persists, some companies should consider investing in new projects in markets that are not impacted or that align with new geopolitical incentives. Others may pivot and repurpose existing facilities to serve local markets.
Reinvigorate: Early winners of announced tariffs should seek opportunities to extend competitive advantages. For example, they could look to expand existing US-based or domestic manufacturing capacity or reposition themselves within the market by lowering their prices to take market share and drive business growth.
By the numbers, global logistics real estate rents declined by 5% last year as market conditions “normalized” after historic growth during the pandemic. After more than a decade overall of consistent growth, the change was driven by rising real estate vacancy rates up in most markets, Prologis said. The three causes for that condition included an influx of new building supply, coupled with positive but subdued demand, and uncertainty about conditions in the economic, financial market, and supply chain sectors.
Together, those factors triggered negative annual rent growth in the U.S. and Europe for the first time since the global financial crisis of 2007-2009, the “Prologis Rent Index Report” said. Still, that dip was smaller than pandemic-driven outperformance, so year-end 2024 market rents were 59% higher in the U.S. and 33% higher in Europe than year-end 2019.
Looking into coming months, Prologis expects moderate recovery in market rents in 2025 and stronger gains in 2026. That eventual recovery in market rents will require constrained supply, high replacement cost rents, and demand for Class A properties, Prologis said. In addition, a stronger demand resurgence—whether prompted by the need to navigate supply chain disruptions or meet the needs of end consumers—should put upward pressure on a broad range of locations and building types.