How to cut empty runs and boost resource utilization?
With every fifth truck in the European Union driving with no cargo, empty runs are the stone pulling the transport sector financials into the abyss of losses. Technological tools can be a key factor in reducing cargo-less trips and thus help firms reduce their operational costs.
Empty runs – full of costs
A few things make transport companies lose more sleep than empty miles. For a firm making money with carrying goods the idea of their vehicles running empty is a contradiction of their purpose. It means doing work without being paid for it. It also means unnecessary fuel costs, driver time costs, contributing to overall increased operating costs, and thus lower profitability for the organisation. Not to mention inefficient use of the vehicle, which could be carrying loads somewhere else, in times of driver shortage and limited capacity.
Not to mention the increased environmental costs when transport sustainability is on the frontlines of combating climate change. Empty miles mean extra emissions and a higher carbon footprint at a time when companies are under growing pressure to adopt green policies. All without making any profit.
Therefore, it is absolutely crucial for carriers to eliminate empty kilometers as well as fully utilize their load space. Minimizing empty miles can significantly reduce costs and boost operational efficiency.
Empty runs can be a result of various factors. Starting with imbalanced freight flows where the target destination imports more than it sends out to the outer world, particularly to the carriers’ point of origin. But poor scheduling and management can be equally critical in this unequal flow of goods.
In theory, reducing empty miles is pretty simple. You could plan routes more efficiently with your current partners. Coordinate delivery schedules so that your trucks return with cargo. Or you could increase your client and sector portfolio – more clients from various segments equals more loads, less prone to fluctuations.
Every fifth truck is empty
Of course, this is all easier said than done. If it were easy, more than 20% of European trucks wouldn’t be driving empty-handed. According to Eurostat, 21.6% of total road freight vehicle-kilometers in the EU were realised by empty trucks. In domestic transport, the figure was higher at 25.8%, while in international transport, it was lower at 12.6%. Nevertheless, that still means that one in eight trucks in international routes is empty.
If one looks at the main transport markets in Europe, the empty runs for Germany stood at 23.2%, Poland at 21.9%, Spain – 24.3% with France somewhat lower at 17.5%. The best performers in the EU were Denmark (7.5%), Lithuania (11%), and Belgium (11.6%), with Ireland, Greece, and Austria being on the other extreme at around 34-35% each. A third of vehicles driving in, to or from these countries are „load-less”.
While no cost-loss estimates are available, the Department of Transport of the United Kingdom publishes statistics regarding the environmental impact of empty runs in 2023.
„As the UK transport sector was responsible for producing 111.6 million tonnes of CO2 in 2023 alone, 33.5 million tonnes of CO2 were wasted on empty running” – reads the report.
How technology can save us
So, how should one go about eliminating empty runs? The coordination and planning needed to align deliveries with available return loads is virtually impossible to realise without the aid of digital tools and software systems.
Joining a freight exchange is probably the most logical solution. These platforms connect shippers with carriers and allow them to quickly find freight in the vicinity of the unloading location for the return route. The available offers from a wide network of shippers appear in real-time and can be secured with virtually one click. The CargoON platform is one that allows for flexible supplement capacity through various forms of access to a vast, secure network of verified spot carriers.
Having access to a freight exchange is one thing, but what use would it provide if one still had to go through tens, if not thousands, of offers, scanning them for convenient locations, appropriate prices, and perfect timing. Here is where the automated transport assignment, which we touched on recently, comes into play. It allows for automatic matching of loads according to one’s chosen criteria, reducing the time needed to manually search for loads.
The importance of analytics and management
It is vital to employ a telematics system to gather real-time data to monitor truck locations and current cargo demand, which is helpful in matching loads and adjusting routes for the most efficient performance.
This tool allows fleet managers to reroute trucks in case of sudden circumstances on the road, reducing unplanned empty miles.
And last but not least, carriers should implement TMS software systems to optimize route planning, deliverie,s and pickups, and constantly analyze data to identify routes with the most empty runs.
Conclusions
Empty runs generate additional costs and waste resources in times of inflated operational costs and scarcity of the latter. With every fifth run in Europe being empty, it is absolutely vital and critical for carriers to reduce empty miles in order to survive in an increasingly competitive and tumultuous transport environment. Implementing technological solutions, like joining an exchange platform, implement automated freight assignments, TMS, and telematics with real-time visibility, is an absolutely key undertaking in facilitating the realization of this goal.
