Why Contractors Need to Automate Logistics Processes

The construction industry faces many challenges that other industries will face in 2023 — labor shortages, cost overruns, project delays and inadequate communication. According to the U.S. Bureau of Labor Statistics (BLS), construction employment continues to grow, and the market will continue to rise, primarily because of the $1.2 trillion infrastructure investment.

According to industry analyst Deloitte, “Companies building infrastructure projects are likely to remain relatively insulated from an economic slowdown, driven by strong infrastructure buildouts and the substantial project backlogs contractors have in their pipeline.”

Tech-savvy companies should be able to overcome industry challenges, grow and thrive. Automating business processes, especially around transportation, helps construction businesses improve efficiencies, increase productivity and maximize communications.

The Benefits of Automating Construction Transportation Processes

Construction businesses are often managing multiple jobs at the same time. Management must ensure that the right materials are going to the right job. These materials must arrive at the right time and be placed at the right location at the jobsite. If a project crew is dispatched to a location on a jobsite to begin work and the materials aren’t there, money is lost, and time is wasted as crews wait for the materials to arrive.

The same goes for equipment on the jobsite — it needs to be dispatched to the correct location at the right time. If the equipment is unavailable or at the wrong location, crews must wait. With labor shortages a significant challenge in the construction industry, crews waiting for equipment to arrive means wasted labor. Even worse, suppose a crew has poured concrete but needs to wait for a roller to smooth it. The concrete may harden and need to be removed before the right equipment arrives, which would mean lost dollars to the bottom line.

Consider a heavy truck driving through a jobsite loaded with materials. How can this truck stop quickly if a worker walks into its path? The answer is it can’t — an injury (or worse) can occur. With a transportation management system (TMS) in place, workers can be made aware of delivery schedules so they can stay out of the field. Many construction firms are starting to deploy automated equipment on the jobsite, which can be communicated with and told to change their transport path should workers be in the field and close to the equipment.

As fuel prices continue to rise, a TMS allows dispatchers to optimize routes to and from the jobsite and in the field. Every second that construction machinery runs, it eats fuel. Telematics, GPS and electronic logging devices (ELD) on equipment can pinpoint the exact location of a machine, allowing managers to track fuel usage and know whether the engine is running correctly or needs maintenance. Managers can also monitor drivers to see if they are running the engine too high or idling too much, which wastes fuel.

How a TMS Can Improve Your Construction Business

A TMS helps to plan, execute and optimize the movement of construction goods and materials. With a TMS, contractors can schedule in advance the need for a truck to arrive at a jobsite, the type of truck and the exact location where the truck needs to go.

Contractors can often use a TMS to choose a truck from their list of current haulers or get exposure to new trucking firms. Finding the correct type of truck and contracting drivers and equipment takes a vast amount of time if done by hand — often, many phone calls need to be made just to secure one truck. If this process were automated, workers could spend more time focusing on core competencies and moneymaking procedures.

Data can be collected through transportation management processes, allowing firms to monitor key performance indicators (KPI) and seek improvements. A TMS collects information on truck drivers and trucking firms to ensure deliveries are made on time to the correct location. Managers can also review trucking routes daily to ensure the most efficient routes are utilized. TMS systems can report on the data collected to identify areas of cost and operational improvements.

With a TMS system, contractors can also facilitate freight billing and payment. Ensuring the construction business pays the best rate for a specific truck and lane will keep costs in tune with the budget. Freight bills are often fraught will errors. Making sure the bills are correct and paid on time helps minimize accounting personnel spending time managing errors and budgets.

What to Look for in a TMS

Transportation management systems for construction firms should have the following features to maximize benefits:

• Inbound and outbound shipment visibility with the ability to send alerts if an issue arises.
• Automates manual tasks for searching for, selecting and securing trucking capacity using contract and/or spot rates.
• Automates dispatch operations and plan routes.
• Freight bill audit and pay capabilities.
• Direct communication with drivers via mobile devices to make changes in routes or delivery locations and to determine the correct estimated time of delivery.
• A cloud-based system that is easy to deploy and support, as vendors are responsible for implementation, support and updates. Cloud-based TMS systems reduce reliance on your information technology (IT) department and help shorten the return on investment.
• Easy-to-use functionality for any size construction firm.
• Business intelligence reporting and analytics for continuous improvement.
• Manages documents to improve compliance and streamline invoicing and settlement.
• Connects with ELD, telematics and GPS devices to track hours of service and truck locations.
• Scales as your business grows.
• Integrates with other systems and operations, such as accounting.

Some transportation management systems are available for free for limited functionality. Make sure that the free model you might be considering meets your needs and is easy to upgrade when additional, paid features are needed.