GPS Systems Benefiting Trucking Industry

23-Oct-1997 12:00 AM EDT

Susquehanna University

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The use of on-board satellite communications systems in the trucking industry has grown in the last decade. It's an emerging trend in the transportation and logistics industries.

Tracy D. Rishel, associate professor of production and operations management at Susquehanna University in Selinsgrove, PA, is researching the benefits these systems may provide for both carriers and shippers. She co-authored a presentation on the topic, "The Value of Motor Carrier Satellite Communications Systems to Buyers of Freight Services: Building A Theory," for the annual conference of the Decision Sciences Institute. The conference takes place November 22-25 in San Diego.

Although satellite communications systems cost about $120 per truck each month to lease and operate, they may provide numerous benefits to the trucking firm, says Rishel.

Some of the benefits include: improved vehicle utilization and fuel economy; and reduced dispatcher and clerical expense. Some other benefits relate to the quality of service provided to the customer such as better on-time delivery performance; and the ability to notify customers in advance when a vehicle will be delayed or to reroute shipments.

The buyers of freight services may well benefit from satellite technology as well. These systems not only improve productivity and lower costs of the carriers used, but also improve the entire operation of the supply chain by allowing improved service and the "visibility" of inventories in-transit.

Rishel and her co-author, Alan J. Stenger, associate professor of business logistics at the Pennsylvania State University, are developing a formula to evaluate the value of a satellite communications system for tracking highway freight vehicles.

"Furnishing higher service levels often raises costs for the firm providing such levels, but may provide benefits as well. Quantifying the cost curve is usually straight-forward, but quantifying the benefits curve is not."

Editors: Please contact Rishel at 717-372-4448. Please contact Steve Infanti of Dick Jones Communications at 814-867-1963 if you would like a copy of her presentation. We assist Susquehanna University with some of its public affairs work.

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