Role of Machine-to-Machine Technology in the Fleet Management and its Impact on the Environment

Today, the transportation and logistics industry is grossly inefficient, overpriced, carriers make low returns and freight is the only industry whose carbon footprint is still rising. In our interview, Brian Bolam, an entrepreneur, founder and a supply chain visionary explains how machine-to-machine (M2M) technology is the key to enable the industry to manage its fleet, efficiency, and to provide visibility and connectivity in a way that can dramatically improve the performance, so shippers can get lower prices, carriers can get better margins and the economy can benefit overall from lower emissions and congestion.

How can logistic companies benefit using M2M technology in their day-to-day business operations?

They can be used enormously, for example shippers can get lower costs (they are paying too much as a result of the industries’ inefficiencies) and they can get much better visibility through freight matching and track and trace – which means they can run lower inventory levels because they can take into account goods in transit as long as they know when they are going to arrive.

From a carrier perspective, they can get much higher asset utilization, the asset utilization is currently appallingly low and that is the reason for such small profits. Hence, carriers can get around 200 to 300 percent improvement in their margins by using M2M technology in order to match supply and demand and track and trace assets.

There is also a big problem worldwide or at least in UK, Europe and the US – driver shortages. Trucks are driving empty around 30 percent of the time. So, there is a huge opportunity by increasing visibility and in matching supply and demand to much better use the existing fleet and drivers, thereby mitigating heavily against the driver shortage.

How will M2M technology support the fleet management?

This is probably the most advanced area in the industry as many companies are using GPS in particular to monitor engine performance, tire performance and real-time feedback of vehicle performance which facilitates planned preventative maintenance, so that vehicles do not fail often and are running more efficiently, thus improving the return on assets.

The greater the use of telematics across the industry, the greater will become the reliability of fleet management and the better return on assets companies will make. Doing so, there are no barriers, however it costs money, but the general perception is that the return on investment is about 6 months. So, there should be absolutely no reason for companies not to adopt the use of technology to manage their fleets.

What kind of impact do M2M technologies have on the environment and the infrastructure?

One of the biggest problems faced by the industry is that vehicles are running empty around 30 percent of the time causing enormous amount of emissions and congestion. The target is to reduce empty running by 40 percent and that is eminently achievable. Additionally, it provides the benefit of utilizing the built infrastructure much more efficiently.

Freight traffic is expected to increase by 40 percent between now and 2040 and is absolutely no way that it is affordable or viable to build enough infrastructure to handle that sort of growth.

The solution is make most out of the existing infrastructure and this can be achieved by making sure that as many vehicles as possible run full in both directions. This is a huge opportunity for M2M technology to provide visibility, connectivity and matching capability in order to make sure that all existing vehicles are used in the most efficient way possible, thereby reducing empty running and enabling intermodal interchanges, so, that rail can become much more viable alternative both in UK and across continental Europe.

One of the biggest reasons why companies do not use rail is either they do not have the capacity to buy a block train or full train which is what most of the rail companies sell. There are insufficient intermodal interchanges that move from rail to road, which means that companies opt for road solutions which is five times more polluting and about the same price.

The big opportunity is to make much better use of the existing fleet in the marketplace and the existing built infrastructure to maximize modal shift from road to rail and coastal shipping with dramatic reduction in emissions and the only really required infrastructure is to build more intermodal interchanges and secure compounds across Europe.

To sum things up, all the issues mentioned above are being addressed and it is only a matter of time for companies to adapt to the new technology which is much more objective as oppose to the current market which is highly subjective. So, there is massive opportunity and it is machine-to-machine technology that will facilitate it, thereby dramatically improving the reputation of the logistics industry.

Do you think M2M technologies will address the challenges faced by the transportation and logistics industry? If yes or no, tell us your reasons for the choice in the comment section

Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.

Role of Machine-to-Machine Technology in Freight Matching and its Impact on Logistics Industry

Technological advancements in machine-to-machine (M2M) technology have the potential to transform the future of transportation and logistics industry. One of the most recent developments allows companies to gather real-time data to improve their business processes, operational efficiency and productivity. In our interview Brian Bolam, an entrepreneur, founder and a supply chain visionary explains how machine-to-machine (M2M) technology will help in real-time freight matching and how this will transform logistics industry.

What is machine-to-machine technology? How does it work?

In supply chain management, M2M is primarily EDI (Electronic Data Interchange) or middleware to connect to systems and transfer messages.

The supply chain industry in general are a bunch of laggards when it comes to the adoption and use of technology, so there are only a few leading companies who are early adopters and fleets covered with GPS (Global Positioning System) transponders or who have adopted EDI standards across businesses through machine-to-machine communication.

The big move in the industry is about the use of internet standards as oppose to numerous bespoke systems of electronic communication. For example, there are 185 different GPS standards in the telematics marketplace which is clearly unsustainable. They will require, either to end up using one generic standard or alternatively a central translation hub which will be able to process any format of GPS message.

So, M2M is quite limited within the supply chain industry and it is principally used in track and trace of vehicle and goods movements. Real-time vehicle management and engine management using either GPS is more widely utilized and has great potential to increase both the reliability and productivity of vehicles.

What role does big data and data security play in M2M technology?

Data security is absolutely vital for companies invariably dealing with mission critical commercial data. Cyber-attacks have become an ever-increasing threat to businesses. For example, one of the UK’s largest telecom companies who had more than 4 million customers was affected by a data breach where customer’s personal information, bank details, passwords etc. was at stake. The company was not only under pressure, but their reputation was seriously damaged.

So, the ability to provide maximum levels of security is absolutely vital and more data that is processed and connected via supply chain data using technologies like GPS, GSM (Global System for Mobile Communications) or other M2M type of communications the larger the “opportunity” becomes. The biggest challenge is how companies are going to use this large amount of data.

Big data really becomes relevant in the supply chain industry as volume of data increases and currently, big data is much more strategic in a business than tactical.

Big data is still over-hyped in the logistics industry and certainly there are no tactical applications, but most of it is strategic looking at particular performance on traffic lanes etc. So, it is not delivering great benefits to the industry yet.

Are there any market barriers that must be addressed to realize the full scalability of M2M technologies?

There are no technology barriers, but there are lots of skepticism amongst the potential users of machine-to-machine. The supply chain industry, in particular is very slow in adopting to the technology, so there are more number of followers as opposed to early adopters.

The principle barrier is people, people’s attitudes to the new technology. There is very high reliance on manual processing within the supply chain industry and that is something many companies go through.

What kind of legal framework is required?

Data security is of utmost importance because of the nature of data companies deal with such as orders, pricing and product information etc. Clearly, this data needs to be widely shared to get maximum benefit. Security is provided by a neutral trusted third party (TTP) who manages the data and protects it from theft, loss and unauthorized access.

How will machine-to-machine technology aid in real-time freight matching? Can you give us some examples?

One of the UK based companies, TGMatrix is working on a project to transform the transportation industry through automated matching of supply and demand. It matches supply and demand across all transport modes (rail, road, short sea, coastal shipping and inland waterways) in real-time using an algorithmic driven matching engine.

It is a 100 percent machine-to-machine and there is no manual intervention. It automates the process through a combination of master data and transactional data fed to the platform via EDI directly from shipper’s ERP (Enterprise Resource Planning) or TMS (Transport Management) systems.

M2M technology is already in-use in the industry for engine management to drive efficiency and reduce breakdowns. For example, using this technology, one can predict when something is going to break on a vehicle and this helps to plan preventative maintenance. Traffic jams are often caused by vehicles breaking down which probably could have been predicted if such a system is installed in vehicles to monitor the performance of key components in real-time.

Optimal real-time routing will reduce journey times, lower carbon emissions and reduce traffic congestion. Using multi-agent technology, it is possible to achieve a very sophisticated optimization in real-time linked to very high volume processing units. The use of Graphic Processing Units (GPU) at many hundreds of times faster than conventional CPU’s enables the automation of the highly complex task of matching freight and the assets to move it which can involve hundreds of variables).

In the near future, M2M technology will be used in real-time re-routing of vehicles around incidents, accommodating changes in weather patterns and ensuring efficient delivery times, lower carbon emissions and reduced congestion.

Do you think matching supply and demand in real-time will transform the future of logistics industry? If yes or no, tell us your reasons for the choice in the comment section.

Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.