Business Outlook: Remote Asset Management Worth the Cost

Companies that invest in remote asset-management recouped their investment within the first 12 months of deployment and saw returns well over 100 percent within the first five years of implementation, according to an industry research study.

The study, The Impact of Remote Asset Management Technology on the Goods Transportation Industry, will be released this month by communication consultant CSMG, the strategy division of TMNG Global, and sponsored by GPS-enabled remote asset-management provider SkyBitz. According to the companies, the report quantifies the value of using remote asset-management technology for shippers, logistics, and third-party logistics companies, and trucking transporters.

CSMG analysts interviewed more than 25 transportation services companies and independent industry experts for the study. “The CSMG research documents what we have inherently understood — that transporters and their customers see impressive and fast returns on investment through remote asset-management solutions,” said Homaira Akbari, president and CEO of SkyBitz. “The report’s findings are a valuable resource to transportation industry companies that need to maximize resources and limit the effects of the current economic downturn and unpredictable fuel prices.”

A major focus of the study was a return-on-investment analysis among early adopters of remote asset-management technology. CSMG gathered pre-adoption and post-adoption metrics to determine the impact of the technology on capital expenditures, operating expenses, incremental revenue generation, and improved asset security. Among the findings in the U.S. trucking industry:

• Improved trailer use. Remote asset-management technology enables better use of existing trailers by increasing utilization frequency, maximizing loads, and reducing excess detention, which lowers the cost of buying or leasing trailers. The average trucking customer is able to increase trailer use by 2 percent per year, reducing new trailer purchases by an average of 20 percent per year over 5 years and reducing the number of trailers rented every year by 60 percent.
• Fuel savings. Fuel prices are one of the biggest challenges faced by transporters today. As fuel prices continue to fluctuate, companies must make significant changes to maintain operating margins, the report states. Even with the recent dip in diesel prices, trucking companies can achieve savings on the order of $500–$1,000 per tractor per year depending on diesel prices.

The report features a case study of a truckload hauling firm operating 3,000 trailers and 1,111 tractors. After deploying remote asset-management technology, the company achieved a return on their investment in less than a year by realizing a $1.9 million reduction in capital spending and an operating expense reduction of $1.8 million.

The study found that among publicly traded carriers, adopters of the GPS-enabled technology experienced greater growth in earnings per share — with annual rates between 28 percent and 54 percent over the last four years — compared to growth between 9 percent and 27 percent for non-adopters over the same period.

The report also highlights ways that carriers, shippers, and third-party logistics providers can realize savings, efficiencies, and higher customer retention in areas such as:

• In-transit visibility. Status and progress reports on movement of goods keep all players in the value chain better informed of delivery schedules, according to the report.
• Fleet dispatch optimization. Companies achieve increased asset utilization and lower costs through right-sizing of fleet resource allocations and optimized transportation routing.
• Supply chain management. Users can optimize the efficiency of goods movement along the supply chain by analyzing accumulated data regarding the location, movement, and status of those goods.
• Remote monitoring and control. Intelligent sensors monitor mobile or fixed assets to measure and collect operational data, diagnose and locate problems, and reduce the costs of transportation to and from remote sites.
• Safety and security. Assets such as high-value goods receive better proactive and reactive protection. Potential liabilities are limited by monitoring hazardous materials or explosives that represent potential threats to human safety or environmental integrity.

In all, CSMG is releasing four reports this month, detailing the value of remote asset management in the trucking, goods transportation, rail, and chemical industries.

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