Charles Lightner

Technology Saves Transporters Money

http://unbonmotgroundswell.blogspot.com/2014/02/use-of-gps-technology-cuts-costs-for.html?goback=%2Egde_1042647_member_5836160222640496641

 

 

The Perseverance Factor

Steve Sinofsky of Andreesson Horowitz has just published a great article on LinkedIn in which he discusses the nature of introducing disruptive technology in a market dominated by a well-established incumbent.

That is just the position that Auto Load Logic is in today and, as I read Steve’s article, it seemed like he’d been listening in to our conference room conversations!

One of the key points he makes is the importance of perseverance. If the new entry into a market really HAS disruptive technology, it needs to hang in there and just keep at it in the face of the inevitable responses from the incumbent.

Ultimately, the message is: the disruptive entrant into a market has the advantage in the long run (if it can persist for the long run) even if the incumbent has the advantage in the short run.

Thanks for this, Steve!

http://lnkd.in/d22MRKp

(Please see the article linked above.)

 

 

We’re Listening to the Auto Transport Brokers

When you’re new in a market you just have to do things better than the other guy!

Auto Load Logic is a new product in a market dominated by a single competitor. We know we have a superior product. We know we are dramatically more customer focused. And we know we have to deliver better results than the other guy.

But sometimes just doing better isn’t good enough.

When we came to the market we promised that we’d take action on new user registrations by the end of the next business day. That’s certainly better than the competition and seemed like a meaningful value-added response time.

But we found that it wasn’t good enough.

Too often we found ourselves getting a call from a Carrier who hadn’t yet registered as an ALL user but who wanted to pick up a vehicle listed by one of the Brokers using ALL.

Human nature, and the auto transport industry, being what they are those Carriers wanted what they wanted — right now!

Not only wouldn’t they wait until the next business day; they wouldn’t – and to be fair, they often couldn’t — wait even a couple of hours.

We clearly needed an even better solution.

That solution is the “Broker-created Carrier Account”.

Auto Load Logic now provides the auto transport broker the ability to do almost all of the account set-up work for the Carrier they want to dispatch a vehicle to, in advance.

Having that work done in advance allows us to approve the new Carrier account literally in a matter of minutes.

The Carrier just needs to download our smartphone app and accept our terms and conditions; both of which can be done within a couple of minutes. He can then pick up the dispatched vehicle without delay.

The rest of the registration process gets done by the Broker and by our staff, leaving the Carrier to deal with the vehicle; which, after all, is what all parties to the transaction really want.

At Auto Load Logic, we’ll do what it takes to provide the service our users need and we know that sometimes just being better isn’t good enough.

We’re working for you – and getting better for you –every day.

Come see us at www.autoloadlogic.com.

And take a look at our interface for the individual shipper at http://autoloadlogic.com/private-shipper/wizard.aspx.

CRL 1/12/14

 

 

 

Looking Back / Looking Forward in Auto Transport

As  I write this, the end of 2013 is fast approaching. Snow is falling here in New Jersey and only a few hours remain of a year that has seen significant changes in all segments of the vehicle transport industry. Those changes have not yet made themselves fully felt. But they will.

What Happened in 2013?

  1. Consolidation and representation in the Carrier community.

First, Jack Cooper bought Allied out of bankruptcy. The combined companies now account for about 4,000 trucks; easily the largest Carrier system in the vehicle transport market.

Then, United Road bought Waggoners Trucking, bringing its total owned-units to about 1,500. Trucks under contract to UR/WT add significantly to that number.

The Jack Cooper purchase was characterized as a “capacity” play. It’s good to be big!

The United Road / Waggoners transaction was essentially a market reach expansion. The two companies had “very little overlap” according to United Road. While the customer base was similar, the market coverage was “complementary”.

In both cases it seems clear that the combinations increase the market power of the two resulting entities.

A new association representing auto haulers, the Atlanta-based Auto Haulers Association of America (AHAA) posted substantial growth in its first full year of operation. While the auto hauler division at the National Association of Small Trucking Companies (NASTC) has been around for a while, AHAA represents the first really significant representation of the auto hauler community.

Time will tell what the impact of this new association will be, but it is off to a strong start and could create some leverage for the auto haulers on key issues as it finds its voice and power.

2. Shake-out in the Brokerage community.

An increase in the required bonds carried by vehicle transport brokers from $10,000 to $75,000 in 2013 has had the effect of shaking out many smaller and financially weaker participants.

Even though some bonding and bond-finance firms brought products to the market that softened the immediate blow, anecdotal evidence suggests that the change in requirements has caused many smaller players to exit the market.

3. Regulatory changes increase costs in the Carrier community.

The change in permitted Hours of Service regulations that went into effect at mid-year directly reduces the number of hours solo drivers can be on the road.  The driver’s cost of living remains the same. But he can work fewer hours. Required income per hour, then, has to rise to offset the loss of hours worked.

The change in HOS regulations is far from the only regulatory change affecting the Carrier community. There are many other, less-well-publicized regulatory changes that will negatively affect Carriers. Essentially all of those changes will result in increases in the cost of doing business as a Carrier.

What’s the likely impact in 2014?

Vehicle manufacturers had a very good year in 2013. Overall sales increased to about 15.6 million units. As we look into 2014 a continuation of healthy demand is expected to move that total to about 16.6 million units.

As demand for new vehicles increases, the OEM-driven demand for vehicle transport increases.

The trend towards more and more on-line sales of used vehicles, both to private parties and to dealers, also strengthened in 2013. The evidence that on-line sales cause increased demand for and complexity of used vehicle transport is clear. As geography decreases in importance, logistics increase in importance.

So, it seems likely that 2014 will find demand for and complexity of auto transport continuing to increase across the board.

In the face of increased demand, consolidation in the carrier community, improved carrier representation, increased carrier costs and increase broker costs, will almost certainly put upward pressure on transport pricing.

If transport pricing pressure rises, either:

a) the increase is transmitted throughout the system and results in an increase in cost to the end customer,

b) the increase is absorbed by brokers or shippers or dealers, decreasing profitability somewhere in the transport chain, or

c) offsetting cost savings are found to allow participants in the system to protect profitability.

Given the sensitivity of vehicle buyers to price changes, we believe that upward cost pressures have to be absorbed in the manufacturing/sales/transport system without causing prices to the end-customer to rise.

The good news is that, in our view, there is ample opportunity to reduce costs through increased efficiency. Those efficiencies are to be found in the application and use of improved technology to better manage the transport process.

The even-better news is that those efficiencies are capable of reducing costs at a rate greater than the cost increases the industry now faces.

Not only can impending cost increases be offset by available savings: those available savings, we believe, can actually increase profits for all parties in the transport process without increasing prices to the end-customer.

But the willingness to adapt to changes and to adopt new methods and technologies will be required to make that happen.

Visit us at www.autoloadlogic.com and take a look at the tools that can help all participants in the vehicle transport process protect and improve their profitability even in the face of cost pressures.

And have a great 2014!

CRL  12/31/13

 

 

 

We Listen to Our Customers — Pricing Change

I get an email almost every day from a consulting firm that specializes in helping businesses figure out how to price their products or services. I guess that means it’s an issue that’s not easy to get right.

OUR INITIAL THOUGHTS ON PRICING

When we began thinking about the pricing of Auto Load Logic’s service our guiding principal was a desire to align our interests with those of our customers. The first conclusion we drew as we talked through the question of alignment was that a monthly subscription model was the wrong one for this market.

Obviously there are others who have used the monthly subscription approach for years. They would probably argue that their ability to maintain that model means it’s reasonable. We think it just means that they haven’t been forced to consider a change.

So, we began with the conviction that we should not charge for our product unless and until it is used by a customer. When our system allows the customer to generate revenue, that should be the trigger for our generating revenue.

Sounds simple, doesn’t it?

Well, maybe not, because that’s only the first of three issues to address. It answers the question: What condition gives rise to a payment obligation? We still have to tackle the questions of the basis on which the payment should be calculated and the rate of payment that should be applied to that basis.

Our thought was that the rates charged to professional vehicle Shippers, such as car dealers, ought to be based on the number of vehicles shipped. We still think that’s appropriate and the dealers we’ve worked with have agreed. So we got that one right.

When thinking about the Brokers and Carriers we thought, initially, that an alignment of interests would be created if we based our fees on the amount of revenue those users generated from a vehicle shipment. As their revenues increased or decreased, ours would as well, and we’d all be in the same position as prices rose or fell. That seemed fair to us.

MOVE TO PLAN B

As we began to work through that system in detail, though, we found more and more ways that a model like that could become problematic. It began to seem like it would require us to be too closely involved in our customers’ transactions. What seemed clear and reasonable in theory didn’t seem so simple in practice!

So we moved to Plan B.

Plan B was based on the well-understood fact that the costs of most of the inputs into the vehicle transport process are distance-determined.

Fuel, driver compensation, truck depreciation and maintenance, etc. are clearly functions of distance. And many others, such as insurance, licenses, and so forth, can be pretty easily estimated in terms of cents-per-mile driven and then converted to cents-per-mile per-vehicle-shipped.

So we thought it would be easily understood and intuitively reasonable to price our product to Carriers and Brokers in terms of cents-per-mile.

But what WE think doesn’t matter much if our customers think differently!

As we entered the market on an initial “soft launch” basis during the summer, we found that this model caused both Brokers and Carriers a lot of problems.

What we thought was very simple didn’t seem that way to the users.  For whatever reason – and a number of reasons were given – what we thought was an easily understood and workable approach was seen as complicated and difficult to our initial users.

The last thing we want in bringing Auto Load Logic to the market is a problem explaining or justifying pricing structure. So….

 WE HEARD YOU

We’ve modified our pricing structure as we ready the release of ALL 2.0.

The new structure is still a pay-on-use model, which we continue to believe is fair and appropriate and acts to align our interests with those of our customers. But it is the ultimate in simplicity. It extends the price-per-vehicle-moved approach to both Brokers and Carriers.

PRICING CHANGE

Our pricing model for Brokers and Carriers is now as simple as this:

Brokers pay $3.00 per vehicle moved using ALL.

Carriers pay $2.00 per vehicle moved using ALL.

That’s all there is to it.

No need to measure revenue. No need to measure mileage. Just count the vehicles and multiply.

And if the count is zero, the cost is zero.

The only exception is that the first 15 vehicles moved are on the house!

Registration as an ALL user is simple and it’s free.

Check us out and register at: www.autoloadlogic.com.

And sign up in the space to the left to receive our newsletter!

Let us know what you think. We’re listening!

Combating “Promise Fatigue”

When materials are used beyond their reasonable capacity too many times, engineers describe the deterioration that results as “fatigue”.

In the business of auto transport software too many promises have been made by too many providers over too many years and the result, for many in the business, is “promise fatigue”.

You’ve heard the promises too many times and no longer trust that there’s any “there” there.

We all know the market leader, which has been operating since 1999. How many clones of that software have been brought to the market in the past 10 years? How many have added anything of real value? How many have been nothing more than glorified load boards?

In fact, if you do a Google search on that oldest software in the market you’ll find a request from someone who actually is looking for a programmer to “clone” the old system. What good would that do anyone?

Recently there have been a couple of new entrants into the market with pretty impressive looking home pages and some pretty impressive sounding claims. In fact, the features claimed by one of those companies sound a lot like some of Auto Load Logic’s features.

But when you get past that product’s home page and look at the actual functions provided it becomes clear that the promises are empty. That offering just did not do what it said it would do. And it created an even greater degree of skepticism in the market.

So, we at Auto Load Logic know that we have to battle the problem of “promise fatigue”. We have to be patient with the companies that have been disillusioned by the broken promises of others.

We have to SHOW the market what we can do rather than just TELLING people what we offer.

That’s just a reality and that’s OK. Reality has to be faced.

Auto Load Logic DOES offer what we say it does.

The features are there. The functionality is there. The commitment to the customer is there. The commitment to continuous improvement is there. The clear and significant value proposition is there for every user group.

So take a look at Auto Load Logic. Call us to talk about it. Write us with your questions. Share your concerns.

We’re here and we’re for real!

Increased Vehicle Sales Puts Pressure on Transport Industry

The strength of mid-year vehicle sales figures has surprised many industry analysts. It now appears that full year domestic sales will approach 16 million units, a figure not seen since 2007. That would represent a gain of nearly 60% from the low point of 2009.

There is no question that the recovery in vehicle sales is a good thing for the US economy in general and for entire automotive industry segment. But what does it imply for vehicle transport specifically?

The sharp decline in vehicle sales in the 2008 to 2009 period created a ripple effect of destruction throughout the industry, causing a significant decline in overall vehicle transport capacity. We saw auto transporters go out of business, trailers get taken to the scrap yard, trailer manufacturers file for bankruptcy and drivers looking for work in other industry segments.

But the pendulum is swinging back. Manufacturing volume drives OEM transport demand and OEM transport demand has an outsized effect on the overall transport market. When a manufacturer wants service the transport industry responds.

Let’s take a look at what that response might require.

If this year’s total sales figure does approach 16 million, it will represent an increase of about 1.5 million vehicles over the past 2 years. Those new vehicles have to be moved from point of manufacture (or port of entry) to the point of initial sale. In other words, from a plant, port or railhead to the location of initial sale or use. And that movement is going to be by truck.

Here’s a simplistic but hopefully useful analysis of what that might require. Let’s assume that:

a) all of the transporters moving OEM vehicles use 10-car trailers,

b) all trailers move fully-loaded,

c) allowing for maintenance and other downtime, an OEM fleet trailer is moving 300 days per year, and

d) the average trip duration from loading to delivery to return is two days, including waiting time and other down-time.

Those assumptions would suggest that an OEM-contracted trailer makes 150 round trips per year carrying a full load of 10 vehicles. So, each trailer moves 1,500 vehicles per year.

[Obviously some vehicles are so large that a 10-car trailer can’t really carry 10 of them. And some round trips might be only a day rather than two. But we’re just looking for a reasonable approximation, here.]

If this actually is a reasonable approximation, an increase in OEM transport demand of 1.5 million units will require an increase of 1,000 OEM-dedicated trailers. And if the manufacturers need 1,000 more trailers, either 1,000 more trailers have to be built or the pressure of that increase in demand gets transferred to the non-OEM market.

I realize that this back-of-the-envelope approach ignores a lot of issues and that the assumptions are simplistic. But I don’t think that the basic point can be refuted.

As the OEM activity continues to out- perform expectations, the pressure is likely to be felt most acutely in the non-OEM transport market. That puts a premium on increased efficiency in that market. Those who can do the job faster, more efficiently and with lower risk will have the advantage.

That’s the advantage that Auto Load Logic provides!

Auto Load Logic – Solving Problems in Auto Transport

CEO and COO of Auto Load Logic

Deron Balch, COO & Charles Lightner, CEO – 2013

Auto Load Logic is the only logical software for auto transport.

It is the outgrowth of a simple question posed in frustration by an auto hauler: our founder and Chief Operating Officer, Deron Balch.

The question Deron asked was: “Why isn’t there a better way?”

Why wasn’t there a better way to figure out the best mix of possible vehicles for him to transport?

Why wasn’t there a better and faster way to figure out how to optimally load those vehicles on his trailer?

Some people ask questions and do nothing.

Deron didn’t. He went to work to solve the problems.

From those initial questions, and from his initial work, came the idea for what is now the proprietary trailer loading algorithm built into Auto Load Logic.

But then Deron also became a Vehicle Transport Broker and the list of questions exploded.

Why did the only significant piece of software in the market still require hours of faxes, phone calls, and paper documentation to get a vehicle moved?

Why was so much employee time spent in trying to find carriers willing to move the loads he was trying to ship?Always ask questions

Why were so many errors made on inspection documents and bills of lading?

Why were his employees constantly fielding phone calls from shippers and from those awaiting deliveries, always wanting to know where the drivers were and when delivery could really be expected?

Why couldn’t things as standard as insurance certificates, terms of service, load assignment sheets and authority packets be made available electronically 24/7?

And on and on and on…

So the concept of Auto Load Logic grew.

It grew from first-hand experience of the problems faced by those in the vehicle transport market.

It grew from frustration with a lack of tools that SHOULD be available to them but have not been.

It grew from a determination to take on those problems and solve them.

It grew from a commitment to a balanced approach to service: to providing real, value-added functions for EVERY participant in the transport chain; the shipper, the broker, the carrier and the recipient.

It grew from a willingness and an ability to step back from the narrow point of view of a single user group and view the needs of the vehicle transport process as a whole.

Our Commitment:Making a commitment

 

Auto Load Logic is not driven by the interests of only the dealer community, or only the carrier community. And it clearly recognizes the value of the brokerage community.

 

  • We understand that relationships matter.
  • We understand that flexibility matters.
  • We understand that choice matters.
  • We understand that service matters.

Auto Load Logic has been created to serve the entire network that is required to move a vehicle from one place to another safely, efficiently and reliably.

It has been created to solve problems; to improve the work lives and increase profit margins of every user and user group in the transport chain.

We are committed to the idea that solving problems for customers is good business for them and for us.

The people of Auto Load Logic understand the problems of the vehicle transport industry. We are committed to solving those problems.

And that is why Auto Load Logic will soon be. . . the only logical software for auto transport.

You’ll be hearing a lot more from us soon!

Chuck Lightner

CEO, Auto Load Logic, LLC