Freight tracking cost analysis to improve logistics management operations
Abstract
The cross-border freight industry suffers from inefficiencies
that can be addressed by implementing technology
based systems. Inefficiencies cause time delays at amongst others
border posts and weigh stations that in turn increase turnaround
times. Higher turnaround times affect the business bottom line as
it reduces the turnover generated on capital assets and therefore
decrease profit levels. Efficient logistics management will also
ensure increased trade in Sub Saharan Africa which will ensure
economic growth in the region. GPS tracking systems deployed
on fleets of freight vehicles are currently focused on vehicle theft
recovery and communication with the units is typically suspended
once a national border is crossed to avoid roaming costs. This
article proposes a mind shift towards the increased use of crossborder
communication with freight vehicles in order to use GPS
tracking and other telemetry data available from vehicles to
enable improved logistics management. The article will analyse
GSM and satellite communication costs and compare these costs
with the potential financial benefits to be gained from the use
of more frequent communications. Our analysis has shown that
the use of telemetry data for logistics management offers the
potential to increase profits by up to R400,000 per vehicle over
its lifetime. Careful selection of the most suitable networks is
however essential to achieve a positive cost-benefit ratio