How Does Artificial Intelligence (AI) Improve Fleet Efficiencies In Freight Transportation
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Fact-checked by: Bruce Sayer
Artificial intelligence (AI) utilizes computer technology to rapidly process large amounts of data to perform tasks such as recognizing patterns, making decisions, and judging like humans. AI is changing the world, and the transportation industry is no exception. Machine learning, big data analytics, and AI-enabled devices are automating operational efficiencies, lowering costs, and reducing the risk of human error. Many transportation companies have already implemented AI tools to increase their margins and expand their competitive edge.
Let’s briefly overview how fleets use AI, then look at cost-effective business financing solutions to afford investments in technology despite the pressures of a tight freight market.
How AI is used to improve efficiencies
Route Optimization
A critical factor in running an efficient transportation company is route optimization. It ensures timely and correct deliveries, helping to lower costs. However, identifying the best route involves collecting and analyzing massive amounts of data and determining how to use it to your company’s advantage. The complexity of this task escalates as the volume of goods to be transported increases.
The best route optimization software systems use AI to streamline the process, using algorithms to analyze data far more rapidly and accurately than a human can. AI systems can analyze traffic patterns, weather, distances, accidents, road construction, and more to identify the most cost-effective routes and times of day to haul a load.
Predictive Fleet Maintenance
The saying “prevention is better than cure” doesn’t just apply to your health – it is also an efficient strategy for controlling equipment maintenance costs. AI can provide predictive fleet maintenance recommendations by analyzing historical data to predict future repair patterns. As a result, you can make data-driven decisions to create maintenance schedules designed to optimize equipment efficiencies and prevent crisis-causing breakdowns that keep your trucks and drivers off the road, costing you money.
Reduction of Operational Costs
The transportation industry operates with tight margins. The ATRI 2023 Analysis of the Operational Costs of Trucking reveals that operational costs increased by 21.3 percent in 2022. Overall, motor carriers reacted by initiating changes to improve operational efficiencies. AI can help to reduce costs by optimizing delivery schedules, assist with driver training to help minimize insurance premiums, reduce equipment lifecycle costs, and much more. While AI may not be able to help lower some fixed costs like overhead, it can help automate tasks and optimize efficiencies to help reduce operational costs.
Optimizing Equipment Utilization
Efficient use of equipment utilization is another critical factor in maximizing margins and profits in the transportation industry. AI can assist with calculations and analyzing data to forecast optimal equipment use, helping to avoid deadheading and inefficient use of cargo space. Optimizing equipment utilization can also help decrease the number of trucks and drivers involved, further lowering costs.
Vehicle Tracking
Using AI-enabled vehicle tracking can help you keep track of your fleet. These devices provide real-time information about the truck’s location, direction, and speed, keeping the loads trackable, secure, and predictable. Additionally, you can analyze data, including fuel usage and engine idling, to identify additional areas to look for potential efficiencies.
Workforce Management
AI can significantly contribute to workforce management, especially in recruitment, retention, and performance evaluation. AI-driven tools and software can streamline employee onboarding, monitor and evaluate performance, and identify strengths to help assign routes, lanes, and customers to the right driver.
Sustainability and Eco-Friendliness
The data analysis available with AI can also enhance your transportation company’s sustainability and eco-friendliness. The real-time feedback on fuel and energy consumption and carbon emissions can help you evaluate the environmental impact of your operations and identify changes to reduce your corporate carbon footprint. For example, using AI to identify and plan the most efficient routes can minimize time spent on the road, lowering fuel consumption and emissions. Additionally, reducing empty miles leads to fewer trucks on the road and a smaller carbon footprint.
Impact of Safety and Traffic Accidents
According to the Federal Motor Carrier Safety Administration (FMCSA) Large Truck Crash Causation Study, driver error, including recognition, decision-making, speeding, and fatigue, is the most prevalent cause of road collisions. AI can analyze data to improve driver performance, limit the risk of driver fatigue, and optimize routes to avoid traffic congestion.
How to Finance Investments in Technology
Investments in technology are no longer a privilege for large, profitable fleets – it is a necessity for all trucking companies. Advanced technologies are needed to reduce, monitor, and comply with emission standards, fuel efficiency, and greenhouse gas regulations. Technologies like telematics, big data, and the Internet of Things have all become essential to remain competitive and profitable in today’s increasingly dynamic market. But, as the industry faces ongoing pressure from rising costs, low rates, and intense competition, many trucking companies are struggling just to break even with each load. For many, the cost of new technologies seems out of reach.
Fortunately, alternative lenders specializing in transportation financing offer cost-effective cash flow and working capital solutions to provide the funds trucking companies need to maintain operations and invest in efficiencies such as technology.
The best alternative lenders for transportation are easy to find – do a Google search for the term “freight factoring.” The most prominent search results typically point to the industry leaders in this sector. To narrow the choice of lenders, look for experience and flexibility. Freight factoring companies with extensive experience and flexible funding solutions are the best positioned to maximize your trucking company’s access to operating funds through all market cycles and conditions.
Look for lenders that offer the following specialized transportation financing options:
Freight factoring: Customized invoice factoring designed specifically for the trucking industry.
Equipment refinancing: A form of asset-based lending with tailored features to benefit trucking fleets.
Visa commercial cards: Immediately access your money whenever needed and wherever Visa is accepted with no annual fees or interest rates.
To further extract the most value from your lender, make sure that they offer value-added services such as the following tools and calculators:
Alternative lenders specializing in transportation financing are changing how small, medium, and large trucking companies fund operations, strengthen financial health and invest in efficiencies. With easy qualification requirements, fast funding processes, and easy-to-manage funding arrangements, these lenders have increased financing flexibility as traditional lenders tighten the credit market.
Conclusion
Artificial intelligence is changing the transportation industry with increased operational efficiencies, cost reductions, and driver performance enhancements. To compete in today’s highly competitive freight transportation market, trucking companies must invest in AI or lose ground to carriers that leverage the efficiencies of advanced technology.
As trucking companies struggle to maintain profitability, the cost of investing in AI may seem out of reach. But failing not to keep pace with advancements in technology allows the competition to gain a performance advantage and greater market share. Fortunately, alternative lenders specializing in transportation provide cost-effective funding solutions to trucking companies with creditworthy customers. Look for lenders with extensive experience in transportation financing that offer flexible funding solutions to maximize your trucking company’s access to the working capital needed to invest in AI. Working with a trusted financial provider experienced in the transportation industry and dedicated to your success is the best approach to remain competitive, profitable, and sustainable in a tight freight market.
Key Takeaways
- Many transportation companies already utilize AI tools to leverage machine learning, big data analytics, and AI-enabled devices to increase profit margins and expand their competitive edge.
- AI technology is used to automate operational efficiencies, lower costs, and reduce the risk of human error.
- Investments in technology is no longer a privilege for large, profitable fleets – it is a necessity for all trucking companies.
- Alternative lenders specializing in transportation financing offer cost-effective funding solutions providing the working capital needed to invest in AI.
ABOUT eCapital
Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.
We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.
eCapital Corp
eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment refinancing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit eCapital.com.