All industries change--some just change faster than others.
To an observable degree, the auto transport industry has been resistant to many of the rampant disruptions and across-the-board changes so prevalent in other American industries. But why? Surely many of the same factors affecting, say, the automobile industry would also affect the auto transport industry, right?Well...yes and no. It’s complicated.
Introduction: the empire of inertia
In one sense, resistance to innovation can be attributed to a massive embrace of the status quo––why reach for the accelerations of the future like car shipping calculators and delivery driver apps, said the Shipper/Broker/Carrier, if the tools of the past are still perfectly functional? Therein, lies a certain old school business logic, if not exactly a compelling case for standing in place.
Additionally, some of the hesitancy can be written off to classic fear of the unknown, often even fear of change itself. Lastly, there exists a creeping lack of clarity––including unforeseen expenditures––that often accompanies the uncertain adoption of “technology writ large,” and this was certainly a leading cause of hesitation among the chief players within the auto transport industry.
However, the desire to seek competitive edge has a way of changing all that. The empire of inertia lasts for only so long––and it often crumbles with the advent of opportunity.
Indeed, in taking a close look back over the past quarter century, far from being change averse, one can’t help but marvel at the many technological advancements that have transformed how cars are shipped. Whether it’s the shift from manual paperwork to computers to mobile apps and platforms; the pivotal emergence of digital car hauler load boards or the electronic transformation of BOLs; the upheaval has been considerable and the adoption of new processes for purposes of safety, security and rapidity has had an enormous effect on how business is done. And we’re not at the finish line yet. Car-hauling technology continues to evolve as consumers demand more delivery options, environmental and industry standards are weighed, and Shippers, Carriers and Brokers step up their efforts to provide these services.
The horse and buggy era
Photo courtesy http://steampunkvehicles.tumblr.com/
Well, not exactly. We’re not going thaaaat far back--just to dawning of the big rig era. The one constant through all the years in auto transport has always been trucks. Trucks and trailers. Sure, technology was introduced in the 1950’s to ship cars via train (and that still exists as a method for many new vehicles/OEMs), but dealers and individual car owners have always preferred the expedited door-to-door service that carriers provide when it comes to shipping pre-owned vehicles.
In 1956, the U.S. government passed the Federal Aid Highway Act that created over 40,000 miles of interstate highways across the country. Over the next 20 years, an estimated $20B was dedicated to this project, further enhancing the highways of America and ensuring that long-distance hauls would become commonplace. And that trucking and logistics would become big business. It’s safe to say that without this capital investment, there would not be anything close to resembling the auto transport industry we see today.
Now, if only there were a way to leverage emerging technology to organize the car-hauling industry to accelerate operations, quickly connect the relevant parties and make sure the cargo (vehicles) would arrive undamaged and on time.
Logistics: First the war and then the industry
The auto transport industry is really an auto logistics industry and a car-hauling industry working in tandem on multiple fronts to provide fulfillment to the end customer—’the snowbird,’ the relocating businessman, the dealership, the auto auction, etc. Modern logistics was born during WW2 on the battlegrounds of Western Europe, and while the technology has changed, the basic mission of using trucks to move freight—in this case automobiles—in a timely, organized manner is still much the same. But because there are multiple players involved in the movement of any load, there is built-in complexity and often substantial paperwork to connect all the dots.
Thirty years ago, there was no online marketplace—there was no online period. Shippers would work the phones, often acting as their own brokers, contacting carriers and negotiating prices. Some carrier companies would have their own primitive ‘dispatch boards’ where time-card slots representing loads would be filed under destination cities. Regardless of method, the extant technology largely consisted of:
- Rotary telephone
- Paper receipts
- Paper contracts
- Paper inspection documents
- Paper gate passes
As an industry, we were killing trees and killing time.
Shippers, brokers, carriers and owner operators were able to collaborate and move cars effectively for the most part—but the process was far from succinct and this in turn guaranteed that it would remain a niche business until new technologies were hatched and embraced.
Old school load boards were just part of the problem. Keeping track of drivers, managing invoices and billing and trying to run the daily operations were challenges to both Brokers and Carriers. Computerized spreadsheets like Microsoft Excel changed the game entirely and enabled a degree of organization and business sophistication that led to new and improved efficiencies for many brokers and carriers.
Of course, just because computers and software existed, didn’t mean that everyone embraced these modern solutions with equal gusto. Immense amounts of information continued to be recorded on paper and filed away in cabinets. Many auto transport offices were knee-deep in paperwork, even as they began shifting some of the work to computers. It was a hybrid approach that demonstrated incremental success yet failed to change the game.
End of Part 1.
Visit the Ship.Cars blog in the coming days for Part 2 of this blog series.