Dropping deadheads Featured

9:36am EDT July 22, 2002

An Atlanta trucking company has a trip due to arrive at noon on Tuesday in Pittsburgh to drop off an industrial generator.

After the delivery is completed, the driver will "deadhead," or make the return trip empty to Atlanta. Meanwhile, a Pittsburgh steel company has a delivery due to leave that afternoon, bound for a construction site near Atlanta. It's easy to see how the trucker and the steel company could benefit by doing business with each other.

That kind of transaction, with destination points connected by "power lanes," essentially stretches of interstate highways that link major metropolitan areas, has been relatively easy to pull off. But tying together trips between smaller market destinations outside the heavily traveled routes has been more problematic.

An e-business site launched this year, however, makes it easier -- and more cost effective -- for manufacturers, shippers and truckers to move over the roads less taken.

The fragmentation of the trucking industry means that, as a practical matter, shippers traditionally have been able to work with only a limited number of carriers. Trucking firms, on the other hand, have had to accept that between 10 percent and 25 percent of the time, their rigs would be riding empty, all the while racking up wear and tear on the equipment and consuming fuel and driver time.

The trick for carriers has been to find ways to reduce deadheading, but that has never been a simple task.

"For years, it's been a challenge to find a way to get large amounts of information regarding shipping needs to the mass of flatbed carriers," says Gregg Troian, CEO of Quadrivius Inc., a Rochester-based holding company for four ventures in the transportation logistics industry.

Also under Quadrivius are Pittsburgh Logistics Inc., launched in 1991 as a division of PGT Trucking that now posts about $280 million in annual sales and serves the metals industry. Earlier this year, the company launched PLS International Inc., a venture designed to tap into the need in the global market for transportation logistics for the metals industry.

Quadrivius also includes eflatbed.com, an Internet-based transportation exchange that electronically links available flatbed freight opportunities with 1,600 potential carriers, automating pickup and delivery arrangements and consolidating billing and payment functions for both parties. The three companies recently were consolidated under Quadrivius, says Troian, to streamline the infrastructure and achieve some economies of scale.

The faster-moving eflatbed.com has proven a contrast to Pittsburgh Logisitics, which sells a "very comprehensive, in-depth service," Troian says, to a relatively small number of clients, currently more than 20. The sales cycle for a Pittsburgh Logistics product might span a year or more, where, by comparison, eflatbed.com is a fee-based service that is relatively inexpensive at $24.95 a month and can appeal to thousands of potential freight haulers and shippers.

Given its expertise in logistics management, Pittsburgh Logistics, which will coordinate the transport of about 20 million tons of metal products this year, decided to focus on the flatbed market, a $24 billion slice of the U.S. transportation industry.

The demand for such solutions is strong, apparently. The company of eflatbed.com started a little more than a year ago with one person in a single office at Pittsburgh Logistics. Now, the start-up employs 32 people -- mostly technology workers -- at its Green Tree offices.

Moreover, a partnership launched in June with Seattle-based YardConnect.com, an online building products marketplace, allows YardConnect's buyers and sellers to schedule materials shipments with their online transactions.

For a monthly fee, shippers and flatbed operators can log on to eflatbed.com and connect with each other. Shippers list freight opportunities while truckers display availability. The parties negotiate online to complete the transaction, and eflatbed.com handles the documentation.

Multiple problems solved

With its ability to connect carriers and shippers, eflatbed.com maintains that it can cut deadheading by at least half.

But cutting deadheading isn't the only reason shippers are interested in increasing efficiency. Rising fuel costs and a shortage of drivers are complicating the situation.

And, regulations that would reduce the number of hours drivers can spend on the road and increase the required rest time between trips for operators is being bandied about in Washington, a move that would no doubt aggravate the labor shortage.

A fragmented industry

Information typically has been exchanged between carriers and shippers by phone, fax and, in some cases, electronic data interchange. Previously, no integrated systems allowed truckers, for instance, to identify a wide variety of potential shipments that could fill the deadhead situations.

Given the fragmentation in the industry -- about 6,000 flatbed operators ply America's highways -- shippers could reasonably interface with only a fraction of carriers. Now, eflatbed.com is using the industry knowledge gained by Pittsburgh Logistics to bring together shippers and truckers to increase the efficiency of both. Using such information tools can offer a competitive edge, according to one analyst.

Says Les Artman, a vice president with Mercer Management Consulting: "Smart companies quickly leverage information technology to get a jump on their competitors."

And put an end to deadheads. How to reach: eflatbed at www.eflatbed.com; Mercer Management Consulting, www.mercermc.com

Ray Marano (rmarano@sbnnet.com) is asssociate editor of SBN Pittsburgh.