Roger describes March 23rd to 29th as “The absolute worst
week of my professional career, by far! The aftermath of what
happened at Suez Canal was nothing short of a nightmare for
us, our customers and their customers. It was pandemonium all
the way.” Roger manages $3B of Freight movement for a F500
CPG major.
As we have realized, end-to-end transportation visibility is no
more a nice-to-have. As the true impact of frequent disruptions
are getting noticed, it has become a strategic priority.
Both Hardware devices and software are used to achieve
visibility through location tracking. Here’s our analysis on how
you should choose between the two.
Hardware Devices:
The market has been flooded with GPS-based hardware
devices in the last few years. Most of these contain components
imported from China, are programmed and cased locally, to be
sold in retail. Several companies rent these out as well.
Wireless and wired options are available, but since most of our
clients use market-trucks, wired devices are mostly useless.
When return logistics costs are factored in, wireless devices
work out to be prohibitive for smaller truckloads but might
make sense for higher per-transaction sizes. One device
can at-most do about 5 trips of 3 days each (assuming 30 day
months and 3-day return SLAs for the device), significantly
restricting scalability and increasing costs. These devices
are fairly accurate through, and intelligent, with proactive
notifications, SMS-based tracking, visualisations, etc. However,
some of this intelligence depends on the quality of hardware used, which pushes costs up further. Moderate resilience is
built-in with most of these devices that account for data
fluctuations, and extreme physical conditions.
Let’s be clear, though — hardware needs software, i.e., while
the hardware has gotten commoditised, the software that runs it
(on the cloud) is the differentiator, and the intelligence.
While some of these devices are very useful for fleet owners,
and transporters, our focus was on serving the Shipper
—to digitise deliveries of all kinds for shippers of all
sizes. With its relatively high costs/transaction, and low
scalability, only a specific kind of (larger) shippers were able to
afford these devices: hardware just didn’t cut it deep
enough. We had to explore other options that worked for
smaller and medium-sized shippers as well.
Software-based tracking:
The case for software was very strong. Low per-transaction
fixed costs, very high scalability (zero cost of download,
ready to plug and play) and accuracy, and high and
increasing intelligence.Software Applications are also super
resilient — one had to consider only battery and data
consumption, and not the resilience of the device itself, since
that belonged to the user. Apps also worked with most android
phones, ensuring compatibility and a seamless user
experience. Since scalability and resilience were high, at a low
per-transaction cost, this seemed like a definite winner!
Reality check
Let’s be clear, though — the software needs hardware, i.e.,
smartphones, to function. Our view is that app-based tracking is
the future, because:
Smartphone Penetration is high, and growing rapidly.
While the numbers paint a decent picture, I think geographical
differences also play to our advantage in the trucking market.
Whenever I pitch to a prospective Client who is skeptical, I love
conducting an experiment with them: I suggest that we step
outside the air-conditioned meeting-room, onto the streets, and
check how many truck drivers have smartphones — this number has never been less than 8/10, till today (6/10 with
internet connectivity).
Our approach to Location Tracking To tailor location-based services for our clients, we ask them
four questions:
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