Study finds that adoption of bypass technology has nearly twice the impact of a 4% change in freight rates.
The benefits of weigh station bypass technology to trucking companies have been well documented and widely accepted since PrePass introduced it more than 26 years ago. The most obvious is saving time, because safe, pre-cleared trucks don’t have to slow down or stop at weigh stations. However, it also helps trucking companies save money, because weigh station bypassing reduces idle time and fuel consumption, making more efficient use of drivers’ time.
Now, new independent research substantiates additional benefits for carriers – specifically that the adoption by a company of bypass technology increases the likelihood of selection by shippers while reducing the impact of carrier pricing on the shipper’s decision. That’s according to a study, lead-authored by Rodney Thomas, associate professor at the Department of Supply Chain Management, part of the University of Arkansas’ Sam M. Walton College of Business.
In other words, carriers that qualify for and use truck weigh station bypass technology, are viewed by shippers more favorably. At the same time, bypassing reduces a carrier’s bottom line costs and has the potential to increase top line sales.
According to Thomas’s and his team’s research, the reason is twofold: 1) trucking companies are continually searching for ways to differentiate their services to shippers, to increase their appeal while also looking for ways to minimize operational costs; and 2) the concept of “environmental sustainability” has evolved from being trendy jargon into a requirement for competitive supply chain management. At the intersection of these two topics, the study identifies this new carrier selection criteria, or what it calls “green management information system” (GMIS) effects.
Since it started compiling bypass data in 1997, PrePass has provided documented reductions in truck-related emissions at weigh stations of over 771,000 metric tons, the equivalent of removing nearly 140,000 automobiles from the road. PrePass is also the only weigh station bypass system that is an EPA SmartWay Affiliate.
While the study substantiates the value of weigh station bypass to the selection decision, it builds on the already extensive body of research that has explored factors of carrier selection by shippers. “Various studies have identified cost and service attributes like pricing, lead-times, reliable delivery, capability, and capacity as key determinates of carrier selection,” Thomas wrote in the study. “However, carrier selection [by shippers] has morphed from a routine purchase decision into a much more involved evaluation process with important implications for supply chains.”
Thomas said because of changing regulatory environments, evolving supply chain strategies, and increased shipper expectations, selection criteria for transportation providers has changed. Potential attributes, including GMIS, are now influencing the decision process.
The study also notes that bypass technology may be viewed as a benefit to shippers as they consider potential exchange relationships with transportation providers.
“As consumers and government entities increasingly demand that processes, products, and services be environmentally friendly, shippers are held more accountable for the waste streams of upstream supply chain members,” Thomas wrote. “Selecting carriers with bypass technology helps address these stakeholders concerns and likely makes an exchange relationship more attractive.”
Thomas and his research team reached these conclusions through a “vignette-based behavioral experiment” of more than 150 full-time professionals affiliated with a supply chain management executive education program. Their approach used various scenarios to describe a carrier selection decision. Together, the research participants had an average of a little more than a decade in applicable work experience.
Through this research, they found that carriers who use weigh station bypass systems can increase their relationship value to prospective shippers while at the same time mitigating the effect of higher prices for their services.
Perhaps the most significant finding of the research addresses the role of GMIS relative to pricing in carrier selection decisions. Research participants were asked to compare shipping rates in the context of whether or not carriers use bypass system technologies. The study found that the adoption of bypass technology has nearly twice the impact of a 4% change in freight rates. This result, according to the study, questions the decades old assumption that price is the ultimate determinate when selecting transportation providers.
This study pointed to one important effect of this trend in the trucking industry. A shift in purchase decision behaviors could shape the trucking industry by rewarding environmentally sustainable carriers. In other words, carriers with high levels of GMIS adoption (including those using weigh station bypass) could prosper while those with low level of sustainability would eventually disappear.
The study concluded that for shippers and carriers alike, the adoption of bypass technology serves as a strong sustainability signal to customers and that carriers can leverage their sustainable approach to supply chain functions and appeal to the sustainable preferences of shippers.
“These research findings offer unique theoretical, practical, and policy implications surrounding the carrier selection decision,” wrote Thomas.
With such findings, this only adds more fuel to the argument that weigh station bypassing is an invaluable resource for trucking companies. Carriers are already aware of benefits that include improved driver retention, time savings and reduced fuel consumption. Now there is evidence that carriers who use PrePass are more attractive to not only their current customers but also potential customers, even possibly to the point of justifying increased freight rates.
For more information on how PrePass can get your trucking operations started in a weigh station bypass program, contact us today at prepass.com or (800) 773-7277, option #2.