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A leading truck-leasing and supply-chain management firm has found ways to ensure that the customer is at the center of its digital transformation.
By Ramesh Sundaresan, Vice President & Division CIO, Ryder System
For a CIO, deciding where to focus your attention is not always easy. This may be especially true if, like me, you happen to work for an 85-year-old company in the transportation sector, an industry that faces disruption on several fronts.
When I set my team’s priorities, I always start with a simple single question: In what ways will the thing that I am working on today have a positive impact on our customers? If I don’t get a good answer to that, we don’t do it.
Keeping Trucks from Sitting Idle
Most of our digital initiatives begin by looking at the customer’s pain points. For example, after analyzing our own telematics data and interviewing our truck-leasing customers, we found that approximately 25 percent of the commercial vehicles in U.S sit idle for more than one day a week, excluding weekends.
But people who lease our trucks have always faced barriers that prevented them from monetizing that spare capacity from underutilized vehicles. For example, how do you find someone you can trust with a $100,000 truck and make sure they have the insurance and DOT compliance they need to operate it?
To make it simpler for our customers to get their unused trucks out of the parking lot, we built a market platform called “COOP by Ryder”. There, they can rent out their idle trucks to other businesses, using a simple app. To protect those making their trucks available, people renting trucks through the COOP platform go through a screening process, and each transaction is covered by physical damage insurance and a $1 million liability policy, as well as 24/7 roadside assistance.
Of course, one good question often leads to others. In the case of COOP, for instance, we asked ourselves which business we should prioritize for growth? If we are already the Marriott of trucking, why would we not try to become Airbnb of trucking?
We began piloting the app in Atlanta last March, and since we launched, we have signed up more than 400 businesses to use the platform. Those offering their trucks on COOP are turning their spare capacity into income, with truck lenders generating nearly $7000 on average since signing onto that platform and several lenders netting more than $30,000 on the platform. Earlier this year, we announced that COOP is available to businesses in South Florida as well, with plans to expand into the entire state before the end of the year.
Giving Customers a Clearer View
Taking the customer’s point of view has led to innovation in our supply chain management segment, as well. Our new product, RyderShare, uses telematics and warehouse automation to give the customer a clearer view of where their loads are at any given point in time and to make sure they’re aware of their estimated time of arrival.
At the moment, third-party logistics providers all have their own tracking systems but there’s no consolidated view of everything that pertains to that particular customer. The goal of RyderShare is to give our customers a holistic view of their freight.
We are also beefing up our mobile fleet management technology with an app called RyderGyde, which allows businesses whose trucks we manage to see local fuel prices and compare them against the Ryder diesel price, to be sure they are getting the best deal. They can also schedule appointments for maintenance through the app, which we are integrating with our back-end systems to make sure that that the experience is streamlined and can be can be done without the customer having to make a phone call.
Preparing for an Electric Future
Another key customer-focused initiative underway now is assisting the transition to electric trucks. We have made some strategic partnerships in electric vehicle technology and are working to see whether it can be leveraged to change the makeup of our rental fleet. In the last two years, we have also become the exclusive distributors for three major electric truck manufacturers: Workhorse, Nikola Motor Company, and Chanje. Recently, we closed our first big deal: With an order of 1000 medium-duty electric vehicles, Ryder and FedEx executed a truck lease and preventive maintenance agreement.
Where will the customers get electric trucks serviced? After all, electric vehicle maintenance is very different from maintenance of diesel and gasoline powered vehicles. So we are making an investment in electric vehicle maintenance to make it easy for our customers to outsource those worries to Ryder.
Promoting a Strategic Mindset
Transforming Ryder’s IT department from a “keep the lights on” organization to a value-add organization has required major changes. The biggest change I had to make was to take the monotonous work that my people were doing and send it to our outsourcing partners, then convince my team that I’m doing this not to reduce costs but because I want them to work on more value-add projects that will enable our business to grow.
There was skepticism when we started, but when people see that outsourcing isn’t leading to layoffs, they get onboard.
I try to encourage my team to take a more strategic view in other ways, as well. One of the keys things that I have done is to mandate that none of my direct reports stays in a role for more than two years. Knowing that whatever is yours today might not be yours tomorrow, and whatever is someone else’s today might become yours tomorrow, not only makes your decision making less selfish but also makes you pay attention to the decisions your peers are making. This change has helped a lot in fostering in people a more strategic mindset.
For the company as a whole, being customer-centric has led us to a point where we don’t just see ourselves as a company that leases trucks but as a company in the business of handling other firms’ transportation needs. Whether it’s logistics, trucks, maintenance, or even hiring a driver, our digital transformation is making it possible for our customers to outsource their transportation needs and concentrate on their core businesses.