How to Reduce Dwell Time in Logistics Through Digitization
According to a report by Market Research Future, the logistics market “is likely to witness good market growth rising at a 7.25% compound annual growth rate by the end of the global forecast period (2022-2039).”
This is pretty good news, but there is a catch — can you keep up with your competitors? If you’re still using handwritten documentation and can’t cut down dwell time, it may be time to digitize.
You can reduce dwell time, increase cash flow, reduce documentation errors, and take over the world (it will feel that way, anyway) with yard management software designed to get **** done.
The Challenges of Dwell Time in Logistics
Why Long Dwell Times Truly Suck
If trucks are sitting in your facility waiting for any number of reasons, then yes, this sucks for everyone. The longer a truck sits, the more it costs across the supply chain.
Dwell Time Impact on Drivers
If a driver has to sit and wait, they can’t move on to their next destination. A 2020 survey estimated that for-hire drivers lose over 3% of their annual income due to detention alone. Additional studies show that if every driver got just 12 minutes back, the entire U.S. network would have enough capacity to run efficiently.
Dwell Time Impact on Carriers
On average for long-haul shipments, a single hour of dwell time equates to 50 miles of lost distance. This can take a toll on carriers as their customers may demand order cancellations.
Dwell Time Impact on Logistics Managers
If you’re reading this guide as a logistics manager, we probably don’t need to tell you why long dwell times are bad. But, here’s the recap: decreased yard capacity, bottlenecks in the supply chain, and very angry key stakeholders.
What Causes Long Dwell Times?
That’s the million-dollar question. You could have long dwell times for a variety of reasons including:
Congestion at ports, yards, and transportation hubs. If everyone else is sitting or moving slowly, it is impossible to get goods in and out of there.
An unreliable infrastructure. This includes insufficient capacity and outdated technology that can’t keep up with the operational processes needed to keep trucks moving.
Inefficient transportation. Poor route planning, scheduling issues, and labor shortages can cause further annoying delays
The use of manual processes such as a handwritten Bill of Lading (BOL). Documentation has to move along the supply chain and usually must be delivered to the yard office, sometimes by truck drivers who curse this backward process along the way.
Customs and regulatory compliance processes. Although necessary, your dwell time will be at a snail’s pace if shipments are mislabeled or the documentation is full of errors or the documentation is missing entirely
Impact of Dwell Time on Logistics Operations: A Deeper Look
There’s more to it than frustration. Long dwell times have the following additional negative impacts:
Increased Costs for All With Zero Gain
Dwell time costs even more if you consider demurrage, detention, and storage fees. These bad boys add up really quickly and could put a sour taste in the mouth of carriers, especially if the delay has nothing to do with them. Drivers also lose money here. Not only can it make them miss delivery deadlines, but in a 2019 survey by the OOIDA Foundation, “54 percent of truck drivers stated that they lose one to two loads per week because of detention. For those who receive compensation per trip, this could equal $83,200 to $166,400 per year.” In many cases, drivers are not paid if they aren’t driving. This could lead to a bad reputation for the yard and poor yard reviews.
With drivers frustrated about the long wait, in a rush to make up the time, and the need to put longer hours behind the wheel, it’s likely that you’ll see thousands of preventable driving accidents as a result. This is awful for everyone and should be a primary driving force behind tackling dwell time at your facility.
Long dwell times can destroy relationships with brokers and can tick off the receivers later down the road. This causes a potential loss of capacity (AKA less money!). It’s pretty clear that long dwell times are bad news bears for everyone. But isn’t digitizing logistics a major pain and practically impossible in some cases? Well yes, that’s why we have Chapter 2.
Get best practices for reducing dwell time
The Challenges of Digitizing the Logistics Industry
The world of logistics has been slower to adopt digital technology than other industries. Honestly, it seems a bit ridiculous when you consider the fact that electronic health records were first developed in the 1960s. So, what’s the hold-up?
Many companies use legacy systems that would be costly to replace. There’s also a real fear of disrupting operations while the new system is implemented. Of course, with so many hands involved, a lot of data is fragmented or siloed, making it difficult to implement industry-wide initiatives. It’s also nearly impossible to implement digital standards as different points across the supply chain may have their own
opinions on what processes should be digitized and how.
In fact, only 48% of the trucking industry is involved in data-sharing solutions, and it’s unlikely that this will change without a serious look at the current issues in the supply chain.
The Challenges of Implementation
How To Get Over It by … Getting Over It
Admit the Truth
The cold, hard truth is that paper trails are just not going to cut it anymore. You need a more efficient way to manage a yard and have end-to-end visibility, happy drivers and carriers, and reduced dwell time.
Do Your Research
While we’ve done a lot of the stat hunting, you can quell your own resistance to change (or resistance of your team or executives) with good old Google. Real-world success stories further explain the importance of supply chain visibility, reduced costs, and streamlined operations brought forth by digitization.
Know Your Options
Some yard management software solutions can be fully integrated with whatever you have going on now. The same software — namely the Vector Yard Management Solution (YMS) — can be gradually implemented as your business grows. What does that even mean? It means you only use what you need when you need it until you need more.
Schedule a FREE yard audit with Vector
The Impact of Digitization on Logistics
The World Economic Forum states, “Over $1.5 trillion is at stake as a result of digitization in supply chain management and logistics up until 2025.” Failure to get with the program could mean a significant reduction in revenue. Aside from straight-up money talk, consider these points:
Digitization Improves Visibility, Traceability, and Transparency
Visibility That Is Visible
With so many crucial moments in the supply chain, there can’t ever be just one person who knows what the heck is going on. A digital transformation will improve communication with carriers, shippers, yard managers, and logistics partners. All involved parties can have easy online access to important status information in real-time to create a harmonious process.
Reduced Latency and Improved Accuracy
Since a robust yard management system is cloud-based and uses the latest technology, you’ll see less latency when you connect. What’s better than not having to wait so long to access data? Accurate data, that’s what. Digitization means less mistakes and errors in documentation. From how documents are organized to what is included in these documents, you’ll have more control over information in general.
This one is fairly obvious. Innovative software features can provide actual geo-location and timestamps of what happened in the field. This can not only minimize disputes, but it also helps to mitigate losses. Potentially, traceability becomes less about reducing problems and more about providing additional value. For example, if you know a truck is arriving late, you can perhaps offer the capacity to a carrier in need.
With digitization, stakeholders don’t have to be there to see what’s really going on. Your business can have full transparency with secure yet accessible data. Scanning capabilities and other dependable features mean there’s also less chance of being asked to provide documentation only to discover that it’s missing.
Increases Efficiency and Productivity
With real-time information, turnaround periods are faster. Drivers can thus take on more loads and improve pick-up and delivery times for the yard, making it a win-win for a general improvement in productivity. Digital alerts, updates, and instructions allow for less manual work such as follow-up calls and can help back strategic decisions. This is far more efficient than waiting for updates and hoping you get them. With digitized documentation, such as an electronic Bill of Lading (eBOL), dwell time drops by 65%. How is that for efficiency?
Improves Accuracy and Reliability
We kind of already mentioned that digitization improves accuracy, but it’s worth saying a million times over. Inaccurate data can lead to increased dwell time and other unwelcome consequences. Hoping you have the manpower to process handwritten documents is just plain unreliable. A system that runs like a well-oiled Porsche engine no matter the time of day can ensure a streamlined process all the way through.
Cuts Down on Costs
- Real-time tracking of in-transit shipments reduces detention costs at unloading.
- Digitized documents mean you can save on paper, organizational labor, and storage.
- Helps to remove resource constraints with gate and check-in automation capabilities.
Welcome center clerk and guard positions can be difficult to fill, especially with
current labor shortages and low retention rates. Digitization can help reduce
the strain on your resources, saving you money and stress.
Customer Success Stories
Case Studies & Testimonials
Vector has helped real logistics partners overcome dwell time hurdles through digitization and integrated tech solutions. We are trusted by many companies, including Coca-Cola®, The Home Depot®, Clorox®, and UPS®.
Here’s how our clients use Vector to reduce dwell time and streamline their operations:
The geo and time stamp of every event provides end-to-end traceability of exactly what happened in the yard for Coca-Cola and their logistics partners. The results include lower transportation costs, more efficient movement of freight, less paper, and faster dispute resolution.
Before Vector, JLE Industries had to email hundreds of load orders and delivery confirmations every day. Vector’s TMS enhancement app pushed data from their TMS directly to drivers’ phones.
Cut Dwell Time With the Vector Yard Management Solution
Integrated yard management software cuts dwell time by providing visibility and a streamlined solution to your operation troubles. Not super sure about taking the leap to digitized bliss?
Do your business and your sanity a favor. Contact us to schedule a demo and see why leading brands trust the Vector Yard Management Solution to elevate logistics operations across their facilities.