Evaluation Findings (continued from Part 3)

EFFICIENCY BENEFITS

The Evaluation Team conducted a detailed operational efficiency and benefit-cost assessment on this core technology based on data collected in this test. The findings were that productivity gains in terms of increased personnel and asset utilization are found to outweigh the costs of deploying this technology with payback on investment in many cases of approximately 1 year or less across the scenarios.

An example of the typical operational efficiency gains that were measured and assessed by the Evaluation Team under this effort is a Bulk Fuel motor carrier. This FOT participant recently began using a Wireless Communications with GPS system to more accurately capture time-stamped events (start and end of day, breaks, arrive/leave rack, arrive/leave customer locations, etc.) to track driver productivity and better mange driver activities and scheduling. Based on data from 19 drivers over an 11-week period, the weekly driver productivity reports demonstrated an overall increase in driver productivity of 11 percent, bringing the aggregate level to approximately 90 percent of the target the carrier had set. Based on this data, the Evaluation Team calculated an average savings of $5,800 per year per truck for Bulk Fuel carriers (versus a case of no technology). Similarly, data was collected from an LTL-Non-Bulk carrier, which demonstrated overall driver productivity improvements of 3.5 percent using the technology. In the case of this carrier, the improvement in driver productivity resulted in a conservative cost savings of $1,920 per year per truck.

Based on a database of operational efficiency data provided by three of the test participants, the Evaluation Team developed an ROI model for industry use of Wireless Communications with GPS (S - Satellite; T - Terrestrial Communications). This ROI model essentially equates downtime savings associated with eliminated driver call-in stops and unscheduled en-route maintenance/repairs with increased asset capacity. The ability to know where assets are, the state of conditions vis-à-vis maintaining schedule, and knowing driver availability for hours of service allows dispatchers/load planners to assess the feasibility for picking up potential backhaul loads (applicable to the operation).

The ROI model also estimates the value of freed up phone call time for dispatchers talking with drivers, thus allowing them to focus on other duties, or have the time to manage more drivers, if necessary. Other benefits include assessed include lower communications costs, less idling time (associated with driver call-in stops), resulting reduced in fuel and engine wear costs. To explore the low-end efficiency benefits, the project drew on previous work that indicated that not all carriers were able to gain benefits it all areas. For those areas where this situation pertained, a "minimum" benefit was calculated, with benefits shown as a range. The Operational Efficiency benefits are presented in Table 5.

Table 5. Costs, Benefits, Benefit-Cost Ratios, and Payback Periods by Industry Segment (Wireless Communications with GPS Tracking Capabilities)

SAFETY BENEFITS

The majority of technologies themselves and their usage were not specifically designed to provide explicit or traditional safety benefits. For example, the test technologies are not designed to warn drivers of obstacles in proximity to their vehicles, lane departure, imminent vehicle rollover conditions, or conditions signaling driver fatigue.

This notwithstanding, frequent driver/dispatcher communications allowing the dispatcher to assess the driver's condition or position tracking to assess possible driver speeding may equate to potential reductions in crashes. Additionally, a potential reduction in miles driven via tighter management of fleet operations enabled by Wireless Communications and GPS asset tracking capabilities may equate to reduced exposure to crashes.

The participating motor carriers and enforcement personnel have also described potential post-incident safety benefits by using several of the test technologies. Using Wireless Communications with GPS positioning, panic alert capabilities, and real-time information exchange with law enforcement and emergency response agencies can provide more immediate incident-alert notification; detect vehicle location; and identify the quantity and type of HAZMAT load on the distressed truck. These benefits focus on the ability to more rapidly detect and respond to an incident with the most appropriate mitigating resources to a HAZMAT incident in a more timely and complete manner.

It also was found that there is some reduction in safety consequences due to the reduced exposure of hazardous materials vehicles. This reduced exposure is a result of a reduction in miles traveled obtained through the use of the Wireless Communications system calculated as part of the efficiency benefits calculation. The approximate savings equal $5 million dollars from the $842 million per year crash costs for the materials involved in the tested scenarios.

PUBLIC SECTOR REPORTING CENTER CONCEPT

Conducted as an adjunct to the primary HAZMAT FOT, the Public Sector Reporting Center (PSRC) concept is an example of a potential solution that provides law enforcement and emergency response personnel with access to accurate, timely, and action-oriented information. As a solution, the PSRC system holds the potential to reduce vulnerabilities, and enables law enforcement and emergency response personnel to prepare, protect, deter, and respond to intentional and unintentional incidents associated with transporting hazardous materials.

On a basic level, the PSRC system successfully demonstrated that it has the ability to improve:

• The response times for emergency and enforcement personnel to respond to a HAZMAT security or safety incident through the implementation of these technologies and the reporting center operational concept.

• The quality of the information provided to first responders through the implementation of these technologies and the reporting center operational concept.

The Public Sector demonstration involved four of the nine carriers participating in the full-scale HAZMAT FOT, and also involved state law enforcement and response agencies from California, Texas, Illinois, and New York. The tests' objective was to assess whether the PSRC systems adequately met the public sector functional requirements with respect to generating customized alerts and handling data generated and delivered as part of the larger FOT, and to identify improvements in timeliness of alert notification.

Based on the Evaluation Team's assessment, for future PSRC or similar system concept testing, the following elements should be considered as enhancements to the current PSRC concept:

• A robust, standardized central data repository for data storage and retrieval must be created with built in redundancy for information collection, fusion, and dissemination.

• An effective interface must be developed to filter data to ensure that sensitive or corrupt data remains outside of any data delivery through the PSRC. As the recipient of keyinformation, the PSRC must forward only critical information to public sector users in a prioritized and easy to manage format, which can be easily integrated with their current systems.

• The PSRC serves as the link between data sources to collect the initial data on one end, and deliver the alert notification data on the other. On the data collection side, mostly private carrier data is the primary source data for the PSRC at this point. In the future, it may be desirable to include information from sources (criminal databases, state commercial vehicle systems, terrorism watch lists, etc.) that might provide in-depth information relevant to criminal or security activity.

DEPLOYMENT POTENTIAL

To assess the propensity of carriers to adopt particular technology solutions, the Deployment Team surveyed motor carriers transporting HAZMAT as part of the FOT research effort. Returned by 153 motor carriers, the respondent demographics represented a broad diversity of fleet sizes, range of operations, routing variability, general operational characteristics and levels of fleet management technologies currently used and those to be employed in the near-term. These results were validated using other industry technology deployment studies⁷ and applied to the demographics of HAZMAT carriers reported in the FMCSA Motor Carrier Management Information System (MCMIS) database to estimate levels of current technology market penetration and total market potential.

The estimated current levels of technology deployment developed through this effort indicate that with the exception of cell phones, paging systems and two-way radio (approximately 87 percent of trucks), Satellite Communications (59 to 63 percent of trucks), and asset tracking (45 to 48 percent of trucks) technology adoption is limited among the four load types. On-Board Computers are used in approximately 12 percent of trucks and 20 percent of trucks are from fleets using Web-based shipment tracking systems (a proxy for the ESCM test system). The percentages for the other technologies are estimated to be at most 13 percent of trucks, with most below 10 percent of trucks.

Also, based on the survey responses, it is estimated that over the next 3 years, modest annual growth is expected for the technologies: Satellite Communications (1.7 to 2.3 percent); Panic Buttons (1.3 to 1.4 percent); Vehicle Tracking (0.8 to 1.1 percent); On-Board Computers (2.4 to 2.9 percent); Automated Driver Identification (1.0 to 1.3 percent); and Remote Vehicle Disabling (1.2 to 1.4 percent). Less than 1 percent annual growth in technology adoption is expected for the remaining technologies, with especially small growth in cell phone/pager systems, as these have already approached near universal adoption.

Based on current levels of technology deployment, Table 6 presents the findings of the deployment potential assessment examining motor carrier benefits and costs in terms of operational efficiency. To realize the full potential benefits, it is estimated that the HAZMAT trucking industry (at the high end) would have to invest an initial $1.1 billion and incur annual service fees of $535 million per year over and above current deployment levels. If the purchase costs were amortized over 3 years, total annual costs (including monthly service fees) would be $910 million. Offsetting these costs would be increased profitability, estimated to be $1.7 to $4.1 billion per year.⁸

Table 6. Deployment Potential Assessment Findings for Wireless Communications with GPS Tracking Capabilities (In Millions of Dollars)

Even with attractive ROI and low payback periods, capital constraints and institutional inertia (comfort with doing business in fixed ways) are likely to make penetration of this market a long-term enterprise, especially in the smaller fleet categories. The Evaluation Team concluded that some type of government policy action will likely be needed to spur on the deployment of these technologies such that the security benefits outlined in this report could be realized by society.

Footnotes

⁶ Costs include purchase and installation costs amortized over 3 years, plus ongoing messaging (with hourly position reports) and maintenance costs. Through discussions with motor carriers and the technology vendor, installation would likely occur during schedule downtime for preventative maintenance. Training of personnel in the use of technologies would generally fall within usual new employee training/orientation processes or within ongoing carrier training/skills enhancement activities.

⁷ ATRI - GartnerG2 survey of 150 motor carriers on adoption of in-vehicle technologies, Trucking Technology Survey - 2003; ATRI industry survey of 348 motor carriers to determine levels of technology adoption in 2000 and projections to 2003, in support of the North American International Trade Corridor (NAITC) Comprehensive and Coordinated Intelligent Transportation Systems for Commercial Vehicle Operations (ITS/CVO) Plan; ATA Foundation, Motor Carrier Technologies - Fleet Operational Impacts and Implications for Intelligent Transportation Systems/Commercial Vehicle Operations, October 1999.

⁸ There may be minimum fleet sizes in these sectors under which the usefulness of integrated communications and tracking systems may be easily reproduced with less advanced methods and technologies, such as cell phones and pagers. Therefore, fleets of 1 to 9 power units were excluded from this analysis based on adoption of Wireless Communications with vehicle tracking capabilities.

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