Landstar uses wireless technology to increase retention of its driving fleet THE STEREOTYPE of a rough-and-tumble truck driver living the solitary life on the road isn’t what one would call high-tech. But drivers for Landstar System Inc. are far from being disconnected on the lonesome highway.

The Jacksonville, FL-based company was one of the first transport and logistics firms to use the Internet to post available freight and other critical data to its business capacity owners (BCOs, otherwise know as truck drivers) right in the cabs of their trucks via laptops. Now they’ve taken that a step further by offering wireless options.

These days, the 7,200 independent contractors – the foundation for Landstar’s $1.5 billion business, hauling just about everything from industrial cranes to life-saving heart valves – can dial-up Landstar’s Web site via cell phones, personal digital assistants, palm pilots or other Web-enabled handheld devices.

The company’s Web site, which was launched in 1997, was a boon to BCOs as they could log on, find out what type of loads were available and where; what the job was worth; get directions; let Landstar know that the freight reached its destination; check their debit card balance; say if they needed new tires; find out the location of cheap fuel; get weather reports and the like. Trouble was, you needed a PC or a laptop. Laptops can be expensive and when you’re on the road, accessing a PC often meant phoning home or to a business partner and having them go online to gather the information. Inconvenient to say the least.

“With the Internet site, we overcame the time-consuming process of BCOs having to work through a sales agent to access the database in order to find an available load,” says Patrick Wise, vice president of e-commerce for Landstar. “And yet, as robust as our Web site is, there are still limitations due to the sheer nature of this business.”

Landstar had been looking at wireless data technology for a couple of years, watching the trends and looking for the right partner. Then came a cold call from PhoneOnline.com, the Knoxville, TN-based software services and solutions company that specializes in the wireless mobile Internet.

The goal was clear: to create a way to exchange accurate information to and from business partners in a safe, timely, easy-to-use, cost-effective manner. Since most of the BCOs already had cell phones, wireless seemed like a cost-efficient way to solve the problem, says Bob Leo, director of professional services for PhoneOnline.

But creating a solution involved much teamwork – on the part of PhoneOnline and Landstar staff and executives – to hash out what was needed for the BCOs to do their jobs most effectively. After a favorable pilot test with 30 drivers, the new system was fully implemented in September.

“It’s hard to say whether Landstar is the first to do what it is doing, but it may very well be the first to go this far,” says Tom Gelinas of Fleet Equipment magazine, Palatine, IL. “Wireless is being used in the industry, especially cell phones.”

Keeping the drivers is a primary goal for Landstar. BCOs are independent and could work for anyone. Like other industries, there’s a shortage of people to do the work.

“It’s a tough life,” says Wise. “People live on the road, shower in truck stops and have to be away from their families.” In addition, the rise in fuel prices has made it sometimes more cost-effective for the BCOs to park their trucks and do construction, he adds. Retention and recruitment is an industrywide problem.

And, Leo points out, “anything that saves BCOs time and money goes a long way toward creating a one-to-one, sticky relationship. The longer they stay, the better off Landstar is.” Leo sees it as a potential recruiting tool as well. “Say a driver is eating his dinner and punching in the numbers on his phone looking for his next load. Other drivers might ask what he’s doing. Once he explains what Landstar enables him to do, well, that’s a selling point for Landstar.”

The new system should help nurture that relationship. “The BCOs now have better access to timely information that will likely make them more profitable as they can work smarter, versus longer and harder,” says Wise. Also of much importance is the quality-of-life issue. “With improved accessibility to information, people can better plan their loads. Just maybe they’ll be able to get home for their son’s birthday,” he adds.

The drivers aren’t the only ones who benefit from the new system. “If the BCOs work more efficiently it pays off for them and us,” says Wise. “And if we reap the recruiting and retention benefits that we expect, there’s an immediate enhancement to our bottom line – it hits it like a rock.”

One ongoing issue is limited coverage. For now, the technology works best in and around large metropolitan areas in the East, West, Southwest and some spots in the Midwest. Landstar is looking into how to increase coverage.

What’s the ROI for Landstar? “It makes no sense to do a return on investment given the low cost of the program – $250,000 when you look at the potential economic benefits,” says Bob Luminati, executive vice president and chief information officer. I’m anticipating a 10, 15, or 20 to 1 payback,” he says. “If the average load has a revenue of $1,000 and if because of the availability of information, each truck finds one more load every two months, that could add up to $54 million on the 100% upside, or even more realistically $18 million for Landstar.”

As for the future, Wise says Landstar has already come up with some 40 possible applications of the technology. “But we’ll also wait to hear from the BCOs about what they need.”

TRUCKS, ESPECIALLY THE largest ones-dump trucks, cement mixers, liquid tankers, fire engines-are the stuff of little boys’ fantasies. You can almost hear a 5-year-old thinking, as he-transfixed-watches one of these dinosaur-sized vehicles vrooming past:

I want to drive that.

Adults in the business-to-business trucking industry are just as likely to be concerned with driving. But for them it’s about driving marketing and competition.

The sector is small and rivals are suspicious of one another (and don’t have as much data on their customers as consumer marketers do). There are just seven major players and only so much business for each of them. “In trucking, getting market share is a zero-sum game,” observes Rick Miller, director of strategic marketing at heavy-truck maker Mack Trucks Inc. in Allentown, PA. “You have to take it away from some other competitor.”

That’s why marketing programs have to be hard-hitting and well-targeted.

Just ask Jan Rothermel, promotion marketing manager at the Alliance division of Freightliner Corp. in Portland, OR. Her company is the leading heavy truck manufacturer in North America. The Alliance division sells aftermarket services and parts.

In addition to Mack and Freightliner, the big players are Navistar, Volvo, Ford, GMC and Paccar.

Freightliner chooses what customers to target in its direct mail campaigns based on which are likely to need certain vehicle parts. The company knows this because it has data on vehicle age and class (that is, type of vehicle) for each of the customers it mails to. So, it can make an educated guess about whether or not it might be time to replace those parts.

“A 10-year-old vehicle is going to have greater parts-replacement potential than a three-year-old vehicle,” Rothermel explains, just as an inner-city-traveling beverage truck may have different potential than a long-hauler routinely driving coast to coast.

Segmentation is key to mailing. “It’s not just a shotgun approach,” Rothermel says.

Freightliner gets its data from Polk, Southfield, MI, the major information provider for the B-to-B industry. Segmentation is vital to all of Polk’s trucking customers-those buying new vehicles and those buying parts and services-primarily because trucks and truck parts are pricey. A mailing must reap big benefits.

“A new Class 8 [the heaviest-weight class] truck can easily cost more than $100,000, so you don’t want to make any bad purchases,” says Larry Hart, account manager in Polk’s truck team. “Unlike a car, trucks are designed to do work. You’ll go out of business if you don’t buy the right truck. General freight industries of the world measure their costs by cost per mile.”

Like many promotions in the trucking sector, Alliance’s Retail Flyer Program is geared to support Freightliner’s dealerships. One of the division’s goals is to draw customers in for better prices than competitors have. Another goal is to entice them to come back again and again. “We want to build an awareness of the dealer in the customer’s area. This is the first step to developing a relationship for our dealer,” Rothermel explains.

The glossy, four-color mailings feature photos of about eight parts on sale. They are usually items that can be used on a number of vehicles. Alliance does about one mail drop a month, which adds up to hundreds of thousands of pieces each year.

Rothermel won’t divulge her response rates, but implies that they are higher than the typical direct mail campaign. “Three percent wouldn’t be near enough for us,” she adds.

Depending on the promotion, the data needs can get very specific, say truck marketers. Polk, which has about 90% coverage of the B-to-B trucking market, collects commercial truck and trailer registration data from the states. (Eight states won’t allow motor vehicle data to be used for marketing.)

Polk’s TipNet database, which is updated monthly, contains company name, address and vehicle identification number for 14 million medium- and heavy-duty trucks in the United States and Canada. Selections include geography, carrier type, manufacturer and trucking-fleet profile (number of trucks, ages, type of work the trucks do-or their “vocation,” in the industry lingo).

For a promotion targeting a certain vocational segment, such data could indicate to Mack Trucks “every company that owns a five-year-old Class 8 truck in Brooklyn,” says Polk account manager Tom Varner.

Detailed parts data such as make, model and number of axles is essential to parts dealers. For example, Freightliner’s Alliance division knows the number of drive axles and axles with driving gears on them, the types of brakes, the make and model of engine and other parts (a truck could contain parts from many different manufacturers) and more.

The database is valuable for a promotion targeting a particular vocational truck because “I know the age of the equipment, what products the company is running,” says Mack Trucks’ Miller. “So from that, I can make some specific determinations on when they need a product and the probability that Mack can sell them some trucks [and when they’ll] need trucks as well.”

If Polk has an abundance of information about vehicles, it lacks precise data about companies. So if Mack is targeting a certain segment, merely having the data about the vehicles may not be enough to overcome competition.

Mack routinely sends out letters to dealers, directing them to go after a certain segment. The letter includes customers’ names, addresses and products they currently own. For the dealer’s sales staff to meet these prospects one-on-one, data such as Standard Industrial Code, telephone number, revenue, size of company, credit information and contact name are helpful.

To get those enhancements, trucking clients overlay Polk’s data with Dun & Bradstreet or InfoUSA’s business data, as well as their own customer files. Polk will do the overlay for their clients.

Still, compared to data available for consumer marketing, where there is “a robust wealth of demographic and geographic data to slice and dice your customers, on the B-to-B side, it’s a shorter list,” says Dan Chester, managing director of the truck and aftermarket teams at Polk.

That’s why trucking companies turn to firms that provide analysis, in addition to vehicle or business data. Mack calls on Martin Labbe Associates in Ormond Beach, FL, for example, for a competitive edge. Says Martin Labbe vice president Chris Brady: “We’ll take the number of vehicles in a given area and then estimate how many parts those vehicles will consume in the aftermarket. Or we’ll find out how many vehicles in a given area will need new parts in, say, 1999.”

Those in the B-to-B trucking arena believe that having that kind of information is the way to rule the road.