Managing yard and warehouse operations has long been one of the thornier aspects of transportation logistics. A recent conversation with a major distributor of consumer beverages encapsulated many of the most common issues.
Yards are a choke point between transportation and warehousing — and wherever you have choke points, you have a higher risk of inefficiencies that drive up labor costs, detention fees and delivery commitments. Missed appointments, dock scheduling mix-ups, crowded yards with insufficient parking, dropped trailers — all have cascading effects up and down the supply chain. The net result? Higher expenses. Delays. Dissatisfied customers.
Bottom line: yards are hard. And in this economic environment, hiring more people to streamline yard and facilities management is a non-starter. But these are not intractable problems. The solutions, as with so many supply chain industry inefficiencies, lie in digital transformation, process reengineering and collective action — of all the links in the chain, yards are one of the least digitized.
But first, a closer look at the issues.
The distributor I spoke with manages around 80 different facilities across the country. Problem number one: they are all unique. Some yards have marked parking spots; some have unmarked. Some have automated, gateless check-in; some direct the drivers to check in with the shipping office. Some have rest facilities; some don’t. Some yards adjoin production centers; others adjoin warehouses.
Problem number two: yards are getting more and more congested. Because of a widespread driver shortage, companies are deploying more drop trailers — meaning the driver will arrive, park their trailer, and then leave with their tractor for another job. So, the parking spots are getting more and more occupied with drop trailers, meaning lot capacity shrinks while finding the trailer with the highest-priority inventory becomes even harder.
Problem number three: appointment scheduling is a mess. For various reasons, many drivers show up unexpectedly and at the same time. A robust, automated appointment scheduling system that connects and streamlines communications between yard workers, shippers, carriers and drivers can alleviate many problems, but it’s not a panacea for these more systemic issues.
The good news is that the industry is taking yard management more seriously than ever and beginning to mobilize around collective solutions. Case-in-point: my company FourKites will collaborate with 16 other supply chain industry leaders — including BlueYonder, e2open, Oracle, Uber Freight, and JB Hunt, to name a few — as part of the Scheduling Standards Consortium (SSC).
The SSC was formed to simplify the integration of systems across the fragmented ecosystem between shippers, carriers and intermediaries and create a more efficient appointment scheduling process. This past October, the consortium endorsed a universal standard for an API (application programming interface) that eliminates the need for multiple interfaces and allows carriers to interact with just one. It’s an important initiative that will help integrate yards into the digital supply chain ecosystem, and we’re energized to contribute.
In addition to this type of much-needed industry collaboration, I would recommend that shippers and distributors take three additional steps to alleviate yard chokepoints.
Top-down process standardization. The inconsistencies and variabilities across facilities need to be addressed at a corporate level. Companies must begin mandating standard processes across all the facilities, from driver check-ins and the gate to the docks. Not only will this help optimize operations, but it will allow for performance to be benchmarked across sites, helping drive continuous improvement and the sharing of best practices.
Digitize the periphery of the yard. As I said, no company right now is going to hire more people to solve yard issues. Greater automation is clearly what’s needed, yet many times when company leadership hears about cameras and IoT (Internet of Things) deployments, they assume they are expensive, complex deployments. They aren’t. With the advancements in AI and the relatively low cost of cameras, companies can install these monitoring systems in a few months for as little as $10K to $15K.
Create a facilities “Center of Excellence.” Warehouses usually operate in silos, managing their own budgets and making various decisions at a warehouse level. Shippers should create a “Center of Excellence” for facilities to drive technology investments, make buying decisions and create efficiencies that benefit the entire network while cultivating a process of sharing best practices between one another.
The returns on these kinds of efforts will be swift and tangible. Greater digitization and automation alone — by creating a digital audit trail and a “single source of truth” — can take a huge bite out of detention fees and constant squabbling between supply chain partners about who is at fault for any given delay.
There’s also a bigger-picture environmental benefit to yard optimization. All of those trucks idling in all of those yards spew a lot of C02 — 22.46 pounds per gallon of diesel burned, according to the U.S. EPA. Regulatory bodies are increasingly taking action. The recently proposed regulatory mandate, rule 2305 in Southern California, focuses on driving down emissions associated with warehousing activity — including a provision for reducing dwell time on-site. Other recent legislation, including the Inflation Reduction Act, advances pressure on companies to reduce “diesel emissions from goods movement facilities.”
Yes, yards are hard. But the problems are solvable — if we act together, continue to automate, and rethink the old and ingrained ways of managing facilities.
Matt Elenjickal is the Founder and Chief Executive Officer of FourKites. He founded FourKites in 2014 after recognizing pain points in the logistics industry and designing elegant and effective systems to address them. Prior to founding FourKites, Matt spent 7 years in the enterprise software space working for market leaders such as Oracle Corp and i2 Technologies/JDA Software Group. Matt has led high-impact teams that implemented logistics strategies and systems at P&G, Nestle, Kraft, Anheuser-Busch Inbev, Tyco, Argos and Nokia across North America, Western Europe and Latin America. Matt is passionate about logistics and supply chain management and has a keen sense for how technology can disrupt traditional silo-based planning and execution. Matt holds a BS in Mechanical Engineering from College of Engineering, Guindy, an MS in Industrial Engineering and Management Science from Northwestern University, and an MBA from Northwestern’s Kellogg School of Management. He lives
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