Sustainability Generates Profit in the Transport Industry in New Zealand

This month I had the pleasure of presenting to the New Zealand Freight Summit at Auckland University to a diverse group of people from all facets of the transport industry. There were a number of common threads and one of them was sustainability. This is a word that is bandied around a lot, together with concepts like carbon emission trading and taxes, but I wonder how seriously a lot of companies are taking it.

One motivator is compliance. Government departments and many corporates today have KPI’s which require that they do business with companies who have sustainability policies and practices. We have responded to a number of tenders recently which have asked us to specify what sustainability practices we have put in place.

I have read many articles that say that companies which have sustainability practices are more profitable than those that don’t. Obviously the above is one good reason, effectively there are contracts they won’t win simply based on the policy.

There are of course other good reasons that also hit the bottom line. The most obvious one is the rising price of oil. If you use tools such as Route Optimisation and Business Intelligence, you can potentially do more work whilst driving shorter times and distance. That means reduced running costs, reduced maintenance costs, saved time which potentially means being able to do more work in the same amount of time and bottom line increase in profit. Whether your fleet is one vehicle or hundreds, there are savings to be made and they are easy to achieve.

Wellington Traffic 28 February 2012 1:15PM

I really enjoyed showing people AA Traffic by GeoSmart. Many of the delegates were not aware that we have real time traffic congestion information covering virtually all arterial roads and highways throughout New Zealand and Australia. There will be some announcements about this in the very near future. If you are a transport operator, how would you like to be able to see exactly where the congestion is in real time and on the same map, see your vehicle fleet?

Does traffic congestion cost your company by not letting your vehicles get where they want to be on time? Wouldn’t it be great if you could have a birds eye of what was going on in real time 24/7? What would that mean to your business? We can help you with that.

Utilising technologies like this can help your company to focus on reducing overheads when the economy is tight and allows you to tell the market that you have sustainability practices, not just policies. Of course in doing so, you are actually taking practical steps to reduce your company’s carbon footprint and doing something good for your country and the planet.

Want to know more about how you can use these technologies in your business? We’d love to talk with you. Contact us today.

Petrol Will Keep Going Up in Cost

You don’t need to be a rocket scientist to understand that petrol and diesel could well hit the highest prices ever this year. This is likely to have a significant impact in New Zealand and Australia where we rely on other countries to provide our fuel. Irrespective of the state of our economies, we are relatively low in the rungs of priority if supplies become short worldwide. Obviously oil demand is increasing globally, irrespective of international politics and our exchange rates. The following graph shows the trend just over the last 3 months.

The implications are obvious. If you have a fleet of vehicles on the road, your running costs are going to increase and you have very little control over what you are going to pay for fuel.

Using technologies such as Fleet Management from our partners, you will have the ability to manage some costs. This includes:

• Monitoring driver behaviour such as harsh acceleration, speeding and other activities such as engine idling time where reports can identify drivers who may benefit from education on the impact of these activities to your costs.
• Monitoring the use of the vehicles, eg personal use or order of use.

You might look at operational improvements such as whether it is more economical for the driver to start from home, closer to their first jobs in the morning as opposed to leaving the vehicle at the depot. You might want to focus more on load management, are you sending trucks out with a load but bringing them back empty? You might want to look at whether there are other jobs in the vicinity of the vehicle that could be completed without the vehicle coming back to base and going out again.

GeoSmart has a number of tools that can help you with these considerations. For example Route Optimisation with Route2GO can help you eliminate the guesswork of what order jobs should be done in. If someone is going out and doing one or 2 stops and going back, that’s one thing, but if a vehicle is making several stops on a trip, it is unlikely that many people have the ability to work out the best order to do the jobs in.

Route optimisation takes into consideration every possible sequence of all the stops on your trip, with an underlying knowledge of turn restrictions (one way streets, no left turns), road class (speed zones, a shortest route might include many compulsory stops trying to cross busy main roads and driving slightly farther might not only speed up the trip but by not stopping and starting through the gears, will consume less fuel) and other considerations. The computer has no emotions, it just solves a technical problem and provides you with a result that will tell you the best order in which to do the work, complete with expected driving distance and time. This can produce a run or job sheet that can also give you an idea, based of your knowledge of expected time on site, as to how many jobs may be completed in one day.

Business Intelligence is a whole new story. Imagine being able to see all your clients on a map, run queries and reports based on any information you have in your database or work management application. How would you like to be able to manage run territories, understand profitable clients, see where upcoming jobs and priorities are, without having to install any software? All you need is a web browser and an internet connection. A picture speaks a thousand words and being able to visualise your business on a map can shed a light on what is going on in your business in a way that is often very difficult to get from spreadsheets and tables. GeoSmart’s new BIonaMAP Business Intelligence on a Map can help you put the pieces together and show you what your business looks like.

We can help you keep your fuel costs under control with practical web based tools that will provide you with the information you need by visualising and viewing your business operations on a map. Information is power.

These solutions support all of Australia and New Zealand so if that is where you are, why not contact us to find out how we can help?

Dealing with Increasing Oil Prices for your Company Vehicles

In this morning’s NZ Herald, senior AA Analyst Mark Stockdale was quoted By Mathew Dearnaley as saying that there may be further pressure on petrol prices this week. The article pointed out that only part of the oil price increase has been passed on to consumers and the tense situation in Libya and other parts of the Middle East mean that the barrel price of oil could continue to increase dramatically.

It is clear that we have now well and truly crossed the psychological barrier of $2 per litre of 91 Octane petrol in NZ and I would be surprised if we drop below it again even if Saudi increases their oil production as suggested. AA’s Mark Stockdale made some good suggestions on ways to save fuel, all of which made good sense, especially if you own your vehicle and are paying for the fuel yourself.

I’m not saying they don’t make sense for all vehicles, but if the cost comes from your own back pocket and we have now crossed the psychological $2 barrier companies are also going to feel the pain and need to look at ways of saving money on their vehicle running costs.

You will remember the story of how to cook a frog. In 1869 Friedrich Goltz demonstrated that if you put a frog into a pot of water and heated it very slowly, the frog would not attempt to escape. Why he was doing it was another story which you can read here. The anecdote is important because we haven’t fundamentally changed our driving habits. Many of us have lead feet and as lovers of driving and fast cars, users of air conditioning and other features, we waste a lot of fuel. Perhaps the new price increases will make us jump out of the boiling water and modify our driving behaviour.

Many companies have been driving smart for some time. For example, large commercial fleet companies have been running with Fleet Management solutions using GeoSmart Maps for years. Many get total ROI from being able to claim Road User Charge RUC Rebates, which is being able to prove when they are driving on private roads or property. That means that the added benefits are free. Fleet Management uses technology to monitor many aspects of driver behaviour with a view to being able to improve driver training. For example it can monitor aspects such as harsh acceleration and braking, idling time is another aspect that consumes fuel.

Car Navigation is another tool that has been under rated. But lets look at some facts. If it costs over one dollar per km (before the latest fuel price hikes) to drive a relatively small vehicle (not counting staff costs and other items), what does it cost to run commercial vehicles? Can you afford to pay people to drive in circles looking for their next stop?

A new feature in car navigation that we have blogged about before is AA Real Time Traffic. This is a service that provides real time information advising of accidents, incidents and real time congestion covering all of New Zealand. This service is available on AA Maps, AA Roadwatch and as well as TXT and Email Alerts. What is really exciting is that you can now get this information direct to you car navigation devices including selected models from brands including Navman, TomTom, Garmin Asus, and Pantera. This page shows how it works. If you consider how much time you have spent in congested traffic, wouldn’t it be great if you could be informed about incidents before you get stuck behind them. Note AA Traffic doesn’t just cover State Highways, it covers all arterials as well, so only really leaves out small residential streets. We are now discussing how to get this information into the Fleet Dispatch rooms of freight, distribution and service companies who are managing vehicle fleets and could better manage their operations if they can see their vehicles and the traffic incidents concurrently on the same map.

You may have noticed a number of references to the NZ Automobile Association. We are a wholly owned subsidiary of the NZAA and as such are very much involved in helping NZ motorists, consumer and business and the initiatives in this blog outline many of our activities in this space.

Route Optimisation is another tool that has suddenly gained popularity. GeoSmart has offered these services for around 5 years. In effect the concept is that if you have a number of vehicles, we can tell you what order they should do their stops in, in order to drive the least distance and time. This doesn’t just take the shortest route, it takes into consideration aspects such as which roads have the least number of stops, the speed zones, the angles of corners, turn restrictions and more. It is a complex and involved problem which we have automated into an application that can be run from a web browser on a pay as you go basis. We blogged about this last week when we first heard of the $2 jump.

We made the offer of a fee trial whereby we will use Route2GO for free over up to 5 previous runs to allow you to compare the route driven, with what our recommendations would be. Many of the results have been astounding with time improvements of between half an hour and 2 hours on a run, with significant savings in fuel and other overheads, as well as the ability to do more work in the same day without an increase in fixed overheads. That offer is still available and of course the payback is now significantly increased.

So, if you have company vehicles that are more than just commuters, you may like to contact us and have a chat about how we can help. You can email us for information or a flyer or contact me (Luigi Cappel) direct on 09 9668768. We would love to help you save money, increase productivity and profit and remain competitive in the marketplace. Many companies will be forced to increase their prices and this will of course impact on inflation. On the other hand companies who work smarter could keep their prices the same or in some cases even reduce them. Historically those companies have increased their market share and in some cases taken over weaker competitors who didn’t think smart.

There are a few choices. One of them is to suffer and complain, the better one might be to contact us and see how we or are partner companies can help you prosper despite the difficult times.

I like the saying that there are 3 types of people and businesses. Those who make things happen, those who watch things happen and those who wonder what happened. Which are you?