Scanning Competition Benefits Carriers
John Bendel
Technology Editor
When it comes to managing documents in the vast, far-flung truckload sector, two vendor names tower over the others — Pegasus-Transtech and TripPak.
These feisty competitors have been slugging it out for years. But the battle has been a good thing for the hard-pressed truckload sector, where profit margins are often paper thin and every boost in efficiency goes straight to the bottom line.
Thanks to the lively competition between Pegasus and TripPak — and the innovations it fuels — there are many carriers whose back offices have shrunk, whose cash flow has improved and whose drivers are a little less likely to join the great driver churn.
Here we profile two such fleets.
NATIONAL FREIGHT PICKS TRIPPAK
National Freight was no stranger to document imaging when they went with TripPak ONLINE in the spring of 2003. The truckload carrier, based in Vineland, N.J., was scanning operations paperwork in house. Still, National Freight was looking for improvement.
"We were looking for a better solution than continuing to add to the head count to keep up with our growth," said National Freight president Jeff Brown. "We also wanted to shorten our cash flow cycle."
The company was already a customer of TripPak Express. National Freight drivers dropped their trip envelopes in TripPak boxes at truckstops. TripPak overnighted the paperwork to fleet headquarters where they were scanned.
TripPak and National Freight came up with a better idea.
Rather than deliver trip envelopes to the fleet's headquarters, they are now brought to TripPak's document imaging center in Wilmington, Ohio. There they are sorted, scanned, indexed and sent electronically to National Freight headquarters for billing.
"Our analysis showed that TripPak offered a more efficient product at a lower cost," Brown said.
National Freight was able to eliminate its in-house scanning operation, of course, but that was just part of the picture. Working with TripPak, National Freight installed scanning equipment at its three largest service centers in Lawnside, N.J.; Jacksonville, Fla.; and Waxahachee, Texas, where drivers can scan paperwork. Those images are automatically sent to TripPak in Ohio where they are processed with other National Freight documents and forwarded to the carrier.
National Freight also uses TripPak's truckstop scanning, available at approximately 1,200 locations in the U.S. Images scanned at truckstops follow the same route as images from National Freight's New Jersey, Florida and Texas service centers — to TripPak in Ohio and then to National Freight headquarters.
So no matter where they are scanned, at a National Freight service center or a truckstop, all trip documents go through TripPak in Ohio. TripPak integrates with major trucking enterprise software. In National Freight's case, it's software from Innovative Computing Corp (ICC).
"TripPak receives all images or original paperwork via TripPak Express and they centrally process all document images, verify the information against our dispatch data and return to us a completely integrated, paperless workflow solution," Brown said.
"The benefit is that we are now paperless and we've provided our drivers with every preferred option to submit their trip documents in the most efficient way possible."
National Freight drivers have three options: They can have their documents scanned at the fuel desk of participating truckstops; they can scan papers themselves at a National Freight service center or they can continue to deposit trip envelopes in TripPak drop boxes.
The new system means National Freight drivers can be paid sooner. "It's basically a matter of getting their paperwork in on time," said Brown.
Other benefits include a decrease in back office personnel and at least a one-day reduction in days billing outstanding.
National Freight has chosen to keep image files on its own servers even though TripPak maintains the digital document files for a number of large truckload carriers. TripPak does retain National Freight's original documents, which can be overnighted on demand.
"There's a 24-hour turnaround for original documents," said Ernie Zseker, National Freight's senior finance VP.
However, there is little need for originals. Zseker said very few National Freight customers still demand original documentation — proof of delivery, for example — for billing purposes.
"The customer that require original paperwork are identified with TripPak and after scanning is done, TriPak forwards the original documents to us. Only a handful of customers are set up to receive original documents," he explained. "We are virtually paperless here."
According to Jeff Brown, National Freight expects to extend the availability of TripPak imaging beyond its three major hubs into many of the dozen smaller company facilities around the country.
CELADON CHOOSES PEGASUS
Celadon Trucking Services began considering document management technology in 1997.
"Basically we were looking to improve back office efficiency," said Mike Gabbei, Celadon's VP of management information systems.
Celadon was seeking an end-to-end solution, he said — a system that could handle most if not all the paperwork generated by a $367-million-a-year business. Of course, it would begin with operations.
"We wanted to improve gathering paper, improve driver payroll and driver relations, improve cash flow and decrease our days sales outstanding," Gabbei said.
Days sales outstanding, or DSO, is a measure of a company's accounts receivable over a particular period of time. In trucking, DSO often relates directly to the efficiency of paper handling, how quickly signed delivery receipts can get back to headquarters, matched to a bill with other supporting documents and presented to the customer for payment. The lower the DSO, the better the cash flow.
Pegasus-Transtech was not Celadon's first choice as a vendor.
"Pegasus came in and provided a demo of their system and a quote. But we selected another provider and were trying to go through the process of implementing the solution. It didn't work out," Gabbei explained.
"The second go-around, Pegasus came back and was the leading provider. We selected them and went live in December of 2000."
Celadon began scanning documents that were overnighted from the road to headquarters.
"We put in the scanning and workflow solutions from Pegasus to automate our billing and driver payroll. Credit and collections had documents at their fingertips for followup."
Gabbei explained that staples were removed from incoming paperwork, that individual documents were broken down, scanned, indexed and routed to billing and payroll. Originals were filed.
But operations and billing were only part of the picture. Celadon added other administration paperwork, including driver and compliance documents. Gabbei said that is a strength for Pegasus-Transtech and not a real option for other vendors.
Two years later, Celadon took another leap into document management.
"We went live with Transflo Express in December of 2002," said Gabbei.
Transflo Express involved truckstop scanning, an idea pioneered by Pegasus-Transtech in 2002. A driver brings documents to the fuel desk of a participating truckstop. A clerk will scan the documents, which are forwarded instantly in digital form to Pegasus-Transtech where they are made available to carriers over the Internet. The original documents are returned to the driver.
Truckstop scanning did away with the need for overnight transportation of trip envelopes.
"Another side of it is that the drivers receive a confirmation receipt for every document scanned. If there's any dispute between driver and payroll the driver can refer back to that confirmation receipt and the payroll associate will know exactly where the drivers' paperwork was scanned, how many documents were scanned, the date and time they were scanned.
"Before that, drivers would physically photocopy their paperwork. They kept the copies for their payroll stubs. Now the drivers keep the originals, so they no longer have to pay for copies at a truckstop."
Initially, Transflo Express was available at Pilot locations. It was also installed at Celadon terminals, including one in Laredo, Texas, a central location for loads in and out of Mexico (see Celadon sidebar). Approximately 60% of Celadon's shipping documents are sent from terminal locations. The rest comes from truckstops.
Transflo Express further reduced time to billing and there were other benefits. Steve Russell, Celadon's president and CEO said the company has been able to extend cut-off time — the deadline for a driver to get his paperwork into payroll.
"We pay every Thursday. (A driver) can deliver a load on Tuesday and get paid that Thursday, which he couldn't do in the old days. If he delivered on Tuesday, he wouldn't get paid at best until the following Thursday. If he lost his paperwork in the interim, it would be a hassle," Russell explained.
The document management solution has allowed the company to expand substantially without adding back-office jobs. Celadon acquired Burlington Carriers in March of 2002 and Highway Express in October of 2003.
"We increased our revenue by approximately $60 million. The payroll department specifically has not added staff to handle that," said Gabbei.
Celadon maintains all digital records on its own servers.
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