Revolutionising Freight and Logistics: The Synergy of AI, OCR, and VHAT GPTs

Revolutionising Freight and Logistics: The Synergy of AI, OCR, and VHAT GPTs

21.2.2024 | Industry matters

Revolutionising Freight and Logistics: The Synergy of AI, OCR, and VHAT GPTs

Carl Day (MBA), Director of  Charlie Delta, shares the digital revolution’s impact on the industry.

The freight and logistics sector are undergoing a remarkable transformation, driven by the convergence of Artificial Intelligence (AI), Optical Character Recognition (OCR), and Virtual Human-Assisted Technologies (VHAT) powered by Generative Pre-trained Transformers (GPTs). This digital revolution is not only streamlining operational efficiencies and freeing up expensive resources, but is impacting subsections of freight sector, in such areas as sales & marketing, customer engagement, and even market research within the industry. As these technological advancements evolve, at an ever-increasing pace, they promise to redefine the landscape across the entire spectrum of freight and logistics, making each activity smarter and more efficient.

The Digital Transformation of Logistics

In a sector not known for fast evolution, the time has come for the adoption of rapid change or be left behind.  At the core of this these changes can be found in the ever-evolving digital transformation of technologies such as Robotic Process Automation (RPA), AI, and Distributed Ledger Technology (DLT), which are reshaping logistics operations ranging from warehouse to manual office functions. By using these technologies to reduce time consuming, resource heavy activities, across multiple sectors, have shown improvements in processing times by an impressive 16% to 28%, at a fraction of the costs the previous manual methods incurred. These technologies underscore the pivotal role of digitalisation in enhancing process efficiency (Lehmacher, 2021). The speed of advance that these technologies are developing at, only highlights the need for stakeholders to immediately embrace the full potential of these digital solutions before they are left their wake.

AI-powered CRM: A Paradigm Shift in Customer Relations

Improvement of Customer Relationship Management (CRM) systems that now include built-in AI assistance, are becoming a game changer in the ability of organisations to efficiently manage customer data. These new technologies are transforming customer engagement by empowering users with an instant understanding of customer interactions, preferences, and needs. The new generation of AI-enabled CRM systems now harness and analyse vast amounts of data, including previously inaccessible or overlooked information stored in archives. They also enable user to construct clear insights across numerous social media platforms, that significantly enhancing their knowledge and understanding of the client.

Such advanced integration leads to a more dynamic and personalised customer experience. The future is driven by understanding customer behaviours and preferences, businesses can tailor their interactions more effectively, resulting in increased customer satisfaction and loyalty. This evolution in CRM technology underscores a pivotal shift towards more informed and customer-centric service strategies, as highlighted by Chatterjee et al. (2021).

AI Bots: Revolutionising Customer Engagement in the Freight Industry

In what is becoming a more dynamic landscape for the freight industry, AI bots represent a cost-effective way to maintain customer engagement directly on company websites. These intelligent chatbots are designed to interact seamlessly with users, providing instant responses to inquiries, guiding them through services, and offering personalised solutions around the clock. By engaging the power of machine learning and their algorithms, AI bots can understand and respond to customer queries with remarkable accuracy, reducing the risk of missed opportunities and significantly improving the user experience.

These digital assistants are not only transforming the way freight companies communicate with their customers but are also streamlining the sales process by qualifying leads and gathering critical customer insights. This automation of customer service tasks frees up human resources to focus on more complex customer needs, thereby increasing operational efficiency and customer satisfaction.

Integrating AI bots into the freight industry’s customer engagement strategy offers a dual advantage: enhancing customer service quality while simultaneously gathering data on customer preferences and behaviours. This data can be invaluable in tailoring marketing strategies and optimising service offerings to meet market demands.

As the freight and logistics sector continues to embrace digital transformation, AI bots stand out as a pivotal tool in creating more engaging, responsive, and efficient customer interactions. Their role in providing immediate, round-the-clock support aligns perfectly with the industry’s goal of delivering exceptional service in a fast-paced global market.

Leveraging VHAT GPTs in Marketing and Market Research

VHAT GPTs are redefining marketing and market research in the freight and logistics sector. By analysing extensive data on customer preferences and industry trends, these AI models generate content that resonates deeply with target audiences, enhancing the impact of marketing campaigns. Furthermore, VHAT GPTs’ capability to sift through large datasets allows logistics companies to gain insights into market dynamics, competitor strategies, and emerging trends, empowering them to make informed strategic decisions and stay ahead of industry shifts.

SEO Optimisation: Enhancing Online Visibility

A crucial aspect of digital marketing in today’s internet-driven world is SEO optimisation. VHAT GPTs play a vital role in generating SEO-friendly content, thereby boosting a company’s online visibility. This optimisation ensures that freight and logistics companies can effectively reach their target audience online, converting visitors into leads and customers.

Data Digitisation in Logistics

The evolution of Optical Character Recognition (OCR) technology has played a pivotal role in revolutionising the way invoice information is digitised into formats such as JSON and CSV. Traditionally, the process of invoice matching was both time-consuming and labour-intensive, but this has been dramatically transformed through the synergistic application of AI and OCR technologies. Together, they automate the invoice matching process, enhancing accuracy, streamlining operations, and liberating valuable resources to focus on exception management.

This technology can also be applied to order management and customs formalities, which involve manual processes to transfer data across different platforms. By freeing up existing resources, business can increase the volume of activity without increasing the cost of the overheads, therefore, making business more profitable and increasing the longevity. This advancement not only facilitates superior data management and analysis but also empowers companies to make well-informed decisions derived from precise and timely information (Kamisetty et al., 2022).

AI in Freight Coordination

AI technologies are crucial in automating information management and decision-making processes in freight coordination. They can assist in route planning, maximising equipment utilisation and improve inventory management. This automation leads to optimised operations, resulting in cost savings and improved service delivery.

Conclusion

The synergy of AI, OCR, and VHAT GPTs is heralding a new era of efficiency and innovation in the freight and logistics industry. By embracing these technological advancements, companies are not only optimising their operational processes but are also revolutionising marketing, copywriting, and market research. As the industry continues to evolve, the integration of these technologies represents a strategic advantage, enabling businesses to connect more effectively with their customers and navigate the competitive landscape with greater agility.

For logistics professionals aiming to stay at the forefront, adopting these technologies is imperative. The journey towards a fully digitalised and automated logistics sector is well underway, promising limitless potential for transformation.

References

Lehmacher, W. (2021) ‘Digitising and Automating Processes in Logistics’.

Chatterjee, S., et al. (2021) ‘Adoption of artificial intelligence-integrated CRM systems in agile organisations in India’.

Woschank, M., et al. (2020) ‘A Review of Further Directions for Artificial Intelligence, Machine Learning, and Deep Learning in Smart Logistics’.

Rohaime, N.A., et al. (2022) ‘Integrated Invoicing Solution: A Robotic Process Automation with AI and OCR Approach’.

Kamisetty, V.N.S.R., et al. (2022) ‘Digitisation of Data from Invoice using OCR’.

Charlie Delta

Revolutionising Freight and Logistics: The Synergy of AI, OCR, and VHAT GPTs

Navigating the UK’s 2024 Economic Seas: Cautious Optimism in a Choppy Landscape

23.1.2024 | Industry matters

Navigating the UK's 2024 Economic Seas: Cautious Optimism in a Choppy Landscape

Carl Day (MBA) Director of  Charlie Delta reveals the UK economy’s 2024 outlook.  

As we cast off into the economic voyage of 2024, uncertainty still swirls around us. Will choppy waters continue to rock us, or can we steer towards calmer horizons? Buckle up, adjust your sails, and let’s navigate the latest forecasts, charting a course through headwinds and tailwinds to reveal the UK economy’s 2024 outlook.

A Steady Course, not a Titanic Tragedy:

While economic pundits quibble over decimal points, a consensus leans towards a sluggish yet stable journey. The International Monetary Fund predicts a GDP growth of just 0.6%, a gentle nudge forward compared to the choppy waters of the past year.

Inflation’s Ebbing Tide:

With inflation still keeping us on our toes, its grip has loosened. While prices remain elevated, the tide turns, with forecasts suggesting a steady decline towards the Bank of England’s 2% target by 2025. This easing pressure offers a sigh of relief to consumers, particularly when considered alongside the potential wage growth predicted in the latest McKinsey report (McKinsey Global Institute, 2023).

Interest Rate Anchors:

The Bank of England deployed its trusty interest rate anchors to weather the inflationary storm. However, expectations point towards a possible easing later in the year, which could unleash a current of investment, stimulating businesses and potentially sparking a gradual economic uptick.

Turbulent Global Activity:

The ongoing conflicts in Ukraine and Palestine and the Red Sea’s intensified disruptions add unwelcome pressure to prices. Vessel operators navigate more costly alternative routes, hampered by the drop in overall volume experienced in 2023, further complicating matters and almost inevitably adding future pressure to consumer prices.

Beyond the Horizon:  AI and OCR – Potential Beacons of Hope

Weak productivity continues to dampen growth. Brexit’s lingering effects and political uncertainties in the UK and USA cast a shadow of complexity, keeping businesses wary. Yet, amidst these challenges, silver linings shimmer, not just as distant hopes but as tangible signals of potential recovery.

The advent of Artificial Intelligence (AI) and Optical Character Recognition (OCR)  area These advancements are two such beacons worth embracing, as both have the potential to unlock significant productivity gains, cost efficiencies, and smarter business practices.

AI promises to be a game-changer for businesses across industries. From automating mundane tasks and optimising supply chains to predicting customer behaviour and driving personalised marketing campaigns, Consider, for example, the potential for AI-powered tools to automate data entry and analysis, tasks often bogging down companies with inefficiencies.

OCR technology, capable of translating scanned documents and images into digital text, is an often-overlooked force multiplier. When coupled with AI, its potential unfolds even further. Imagine instantly extracting key information from contracts, invoices, or regulatory documents, eliminating manual data entry errors and more, and enabling businesses to utilise that data for improved decision-making and compliance.

These aren’t just theoretical possibilities. These innovations offer businesses the tools to break through productivity bottlenecks, reduce costs, and gain valuable insights.

Investing in the Future:

Long-term investment in infrastructure upgrades, education reforms, and embracing disruptive technologies like automation and AI are the sails that will propel the economy forward. The McKinsey report highlights upskilling as crucial for addressing the productivity gap and unlocking future growth.

Expectations for 2024:

The 2024 economic voyage may not be a thrilling high-seas adventure, but it’s far from a doomed Titanic journey. With careful policies, long-term investments, and a continued focus on innovation, the sun-kissed shores of sustainable growth may be closer than we think.

Strategies to Adopt in Uncertain Times:

During economic doldrums, businesses face various challenges, but there are several strategies they can undertake to be ahead of the game when the upturn returns. For example:

Financial Preparedness:

  • Strengthen the financial position: Manage cash flow effectively, reduce unnecessary expenses, and optimise operational efficiency. Create a contingency plan and conduct a scenario analysis to identify potential risks and mitigation strategies.
  • Embrace technology: Utilising technology for enhanced financial management, data analysis, and automation can boost efficiency and uncover cost-saving opportunities.

Customer Focus:

  • Maintain strong relationships: Focus on customer retention by providing value-added services, personalised experiences, and flexible payment options. Effective communication and customer satisfaction initiatives are crucial.
  • Meet evolving needs: Stay ahead of market trends and identify emerging customer needs. Diversify product or service offerings and explore new markets or customer segments.

Innovation and Adaptation:

  • Foster a culture of innovation: Invest in research and development, experiment with new technologies, and encourage out-of-the-box thinking.
  • Leverage AI and automation: as previously mentioned, implement AI solutions to streamline, optimise decision-making and gain insights. The McKinsey report emphasises the increasing adoption of AI across industries and its potential for driving productivity gains.
  • Embrace new business models: Explore disruptive business models like subscription services, on-demand platforms, or the sharing economy. Agility and adaptability are key in today’s dynamic market.

Talent Management:

  • Prioritise talent retention: Invest in employee engagement and motivation through training, development opportunities, and flexible work arrangements. Recognise and reward top talent to prevent churn.
  • Build a talent pipeline: Attract and nurture future talent through recruitment efforts, networking, and internships. The McKinsey report highlights the growing importance of lifelong learning and upskilling for individuals and businesses.

Strategic Partnerships:

  • Collaboration: Form alliances or partnerships with complimentary businesses to expand customer reach, share costs, access new markets, and leverage collective strengths.
  • Seek out expert guidance: Consider partnering with consultancy firms or industry experts for strategic advice and support in navigating complex economic conditions.

Conclusion:

These strategies will help businesses survive during challenging times and create a solid foundation for future growth and success.

As the McKinsey report states, “The future of work is not about replacing humans with machines, but about empowering humans to work alongside machines and use them to their full potential.” By embracing this philosophy and implementing the abovementioned strategies, businesses can chart a course towards a brighter future, not just in 2024 but for years to come.

Remember, when looking back over recent economic history, the economy moves through a cycle of growth, slowdown, stagnation, and eventually regrowth. Those businesses that strategically prepare for the regrowth are the ones with the most success.

“It’s not about waiting for the storm to pass but learning how to dance in the rain.”

Charlie Delta 

The rollercoaster warehousing market.

The rollercoaster warehousing market.

3.5.2023 | Industry matters

The rollercoaster warehousing market

Vanessa Penn from Penn Commercial reflects on the challenges from 2022 and what we can expect in 2023.

It’s now nearly three years since the pandemic changed everything, but the warehousing and logistics community continued to face disruptions throughout last year.

New challenges are arising, including a lack of warehousing space, the ongoing labour crisis and an uncertain economic climate, as our supply chains continue to recover and there is a slowdown in the pandemic-fuelled growth in e-commerce.

In 2022, record rents have been set across the board, particularly for well-located units and new developments, including several new schemes along the A14 corridor, amongst them Gateway 14, Suffolk Park, Suffolk Business Park, Port One, Orwell Logistics Park and Woolpit Business Park.

There is a lack of quality second-hand stock across all size ranges, and this is frustrating tenants and occupiers, who have outgrown existing facilities, but who may not be able to afford new build premises.

Rental growth is set to continue, as the vacancy rate remains tight, although there has been a slowdown in take-up.

The market has, however, avoided an oversupply, largely because of Brexit and the pandemic.

Locally, there has also been considerable consolidation within the industry, with company acquisitions and mergers within haulage, logistics and warehousing companies.

The 100,000 – 300,000 sq ft market has performed well in all regions, and a lack of supply remains an issue in East Anglia. Third-party logistics providers took the most amount of space in 2022, followed by offline retailers, omni-channel and manufacturing. Online retail was significantly down on the previous year.

However, this year has seen the return of investors, wishing to partner with developers to undertake speculative funding or forward funding. There is now over 15 million square feet of new speculative product under construction in the UK.

Some companies are turning to automation to help to increase warehouse capacity and hence address labour shortages. Landlords and tenants are investing in solar PV, EV charging and other energy-saving measures, which assist with ongoing running costs.

Blue Chip companies, especially, will need to meet their ESG targets, although this is not limited to them; thus, compliant buildings will be in greater demand. Poor second-hand buildings that do not meet EPC regulations will need to be upgraded by landlords in order to be re-let.

Inflation is forecast to drop significantly by the end of the year, and, if the UK avoids a recession, we should see a take-up of 30 million square feet by the end of 2023.

Please contact Vanessa Penn at Penn Commercial for any warehousing, distribution or logistics requirements, rent reviews or lease renewals at vanessa@penncommercial.co.uk | 01473 211933.

Penn Commercial, Suite C Orwell House, The Strand, Wherstead, Ipswich, Suffolk IP2 8NJ

penncommercial.co.uk

Are you Cyber-Crime savvy?

Are you Cyber-Crime savvy?

22.2.2023 | Industry matters

Are you Cyber-Crime Savvy?

Three local companies talk about the threats and how to mitigate attacks. 

When the words cyber and security are mentioned, it’s easy to think that potential risks only apply to big multinational corporates. Unfortunately, this couldn’t be further from the truth, making it an issue that needs to be on the agenda of organisations of all shapes and sizes, including those in the logistics sector.

As demonstrated during the pandemic, shipping and logistics is the glue that keeps our modern and globalised way of doing business together. And as cyber-attacks take many forms – including technology focussed ransomware (an attack where malicious software blocks access to a firm’s database or computer files until a ‘ransom’ is paid) and undetected attacks due to human error and processes, no company can afford to take a laissez-faire approach to the issue.

With this in mind, Porttalk talks with three Ipswich-based organisations that are taking their own steps to limit attacks or help clients mitigate any potential threats to their business and data.

Corbel Solutions is an IT company that specialises in cyber security. Managing director Karen Rogers says: “There is a new landscape of threat from outside and inside any organisation –  some with harmful intent and others as the result of human error. Our job is to help enterprises mitigate such risks by educating them about potential threats and working with them to proactively layer their security to protect their business and its assets.

With more than 80% of cyber-attacks originating from phishing emails, the range of services Corbel offers is extensive. From firewalls, cyber security testing and phishing simulations, audits, dark web monitoring and staff training on the ubiquity of cybercrime, Corbel Solutions uses only the latest technological innovations to ensure peace of mind for its clients.

Karen continues: “Whilst 39% of UK companies identified a cyber-attack in 2022, it’s heartening to know that 54% of organisations acted in the last twelve months to identify any risks within their procedures and operations.

“It’s imperative that companies embrace a multi-layer approach, we always recommend the starting point of any decision-making should be a cyber audit combined with penetration testing. This way vulnerabilities can be identified and budget ringfenced for security enhancements can be used to maximum effect.”

But what happens if your business is compromised despite your best endeavours?

WM Brokers is an insurance broker that works with firms, including those in the logistics sector, to ensure the correct type of insurance is in place to cover their business in the event of such a calamity.

Offering a host of insurance options, including cyber security insurance and dependent business interruption insurance (which covers your business should a third-party system you rely on suffers an attack), WM Brokers’ account executive, Liz Howe, says: “With cyber-attacks in 2022 increasing by 77% from the previous year and small businesses nine times more likely to receive a cyber-attack than a theft or burglary, the industry mustn’t bury its heads in the sand but face the potential of cyber threats head-on and insure themselves accordingly.

“Having the right insurance in place means you have somewhere to turn for help, support and financial cover for your business in the event of an attack. WM Brokers works with companies to identify those risks and help them make an informed decision on what protection they should have.

Most cyber insurance policies will cover the first-party and third-party financial and reputational costs if data or electronic systems have been lost, damaged, stolen, or corrupted. For the business involved, the first-party cover includes the charge of investigating a cyber-crime, recovering data lost in a security breach and the restoration of computer systems, loss of income incurred by an operational shutdown, reputation management, extortion payments demanded by hackers, and notification costs, in the case you are required to notify third parties affected.

Third-party coverages (that result from claims against you) include damages and settlement and the cost of legally defending yourself against claims of a GDPR breach.

Liz Howe adds: “As with most insurances, we always advocate undertaking a detailed review of your policy on an annual basis to determine it is still fit for purpose and meets the needs of your organisation.”

Last but not least, Fargo Systems, a leading software provider to the logistics industry, explains why systems and data must be protected with its TopsTMS® suite of products ubiquitous across the sector.

Managing director, Steve Collins, explains: “The scope of our TOPS technology means that the systems and data processing is essential for the supply chain to be efficient.

“As technology evolves for legitimate organisations, so does the technology available for cyber-attacks. Constantly reviewing security protocols is imperative. Last year, we engaged the services of Corbel Systems to undertake a thorough review of our business operations to identify evolutions in security protocols we weren’t currently utilising.

“One of the first things the review identified was the need further to protect email systems with advanced threat detection tools and review the latest two-factor authentication options; DUO’s two-factor authentication system is now installed across our entire business systems network. It ensures that users are who they say they are and keeps our cloud system and customers safe from unauthorised access.

“We’ve also embraced the additional security offered by Microsoft Azure cloud services. We have increased the frequency of our cyber security assessments and our progressive penetration tests (pentests) to quarterly to ensure we are aware and can quickly act on any newly identified vulnerabilities.

“And, as part of our commitment to protecting our systems and customers from cyber-attacks, we are introducing SSO (Single Sign-On) with Windows Active Directory into TOPS, which will be available to customers regardless of how TOPS is deployed. A validation method that enables the central administration of user accounts and permissions, integrating TOPS with Windows AD was an obvious progression. The added benefit of SSO is to provide users with the ability to securely authenticate with multiple applications and websites using a single set of credentials. This is available when TOPS is accessed via Fargo’s cloud, the customer’s own cloud or a customer’s on-premises network; we hope this will simplify for the end user what can be a complicated security topic.”

Steve Collins adds: “We have always been cognisant of the potential of cyber-attacks, but our review with Corbel provided access to industry best practice information and supported the integration of new security techniques with our existing infrastructure.”

Road transport operator’s licence – when is a lorry ‘in use’?

Road transport operator’s licence – when is a lorry ‘in use’?

7.3.2023 | Industry matters

Road transport - when is a lorry ‘in use’?

Tim Ridyard, Ashtons Legal’s transport partner, considers when are vehicles regarded as being used for Operator’s Licence purposes. Is the operator’s licence large enough to cover all the vehicles being utilised?

This issue was considered in the recent case of Connor Construction, an appeal against a Traffic Commissioner decision. The Upper Tribunal said:

A vehicle which is utilised as a commercial vehicle for the purposes of a business which an Operator runs under a Licence, is being used for the carriage of goods for hire or reward or in connection with any trade or business carried on by the Operator even if that vehicle is not actually being physically driven for such purposes at any specific point in time”. 

The case has examined the issue of what is meant by “in possession” and vehicles “in use” or being ‘utilised’ – and hence what vehicles are to be taken into account to ensure the operator’s licence is large enough. In short, it is legal.

In turn, this has prompted the Senior Traffic Commissioner to issue proposed guidance on the interpretation of this area of law. There remains some lack of clarity.

Case background

The operator held an Operator’s Licence for 9 vehicles and 3 trailers.  It made an application to vary it. It asked the Traffic Commissioner to grant an increase in its licence because:

At present, vehicles are being swapped on/off the licence daily to meet business needs”.

A Traffic Commissioner Public Inquiry was called to consider this and other issues (including Transport Manager good repute).

DVSA alleged, amongst other things, that the operator had more vehicles ‘in possession’ than authorised under the Operator’s Licence.

The Traffic Commissioner held that the Operator had in possession a greater number of goods vehicles than the Licence authorised, notwithstanding the absence of any evidence that more than nine vehicles were actually ever driven on a road at the same time.

The operator’s lawyer argued that a vehicle was only ‘in use’ when it was being driven. Therefore, it was possible (and entirely legal) to swap vehicles onto and off the licence, so long as the vehicles used on the road did not exceed the licence size. (It was admitted this was being done.)

This was because the law said:

no person shall use a goods vehicle on a road…… except under a licence”.

The West of England Traffic Commissioner totally rejected that legal argument and noted the significance of operating centre capacity and the financial standing rules. If the only vehicles that counted were the ones ‘in use’ on the road, then an operator could have a larger fleet but a lower financial standing requirement than was intended. The Traffic Commissioner curtailed (reduced) the Licence to 8 vehicles and 3 trailers for a one-month period.

The Appeal

The Operator appealed against the Traffic Commissioner’s decision on a number of grounds.

The important part of the case was the operator having more vehicles “in possession than authorised” and the significance of swapping vehicles on and off the licence.

The Upper Tribunal said that the Operator was:

using more vehicles in the operation of its business than it was seemingly authorised to do under the licence but was using the VOL system* to swap vehicles on and off the Licence so that, at any given time, no more than 9 (the number authorised for use under the terms of the Licence) were actually on the Licence.”

(*VOL is the online system used by operators to manage their licence, including fleet)

The Upper Tribunal rejected the idea that the Traffic Commissioner had been wrong:

A vehicle has been removed from the licence temporarily but is still an integral part of the business; it does not cease to be used in the business”.

The following conclusions were made by the UT:

  • A vehicle…..which an Operator runs under a Licence, is being used for the carriage of goods for hire or reward or in connection with any trade or business carried on by the Operator even if that vehicle is not actually being physically driven for such purposes at any specific point in time”.
  • “Being in possession of a fleet of vehicles considerably in excess of the Licence authorisation and then drawing down vehicles to use as and when required . . . undermines at least two of the core requirements to the Regulatory Regime . . . financial standing and Operating Centres”
  • The need for an operator to have “the financial wherewithal to effectively maintain and keep safe the vehicles which it is using in the business”.

 Where to now?

On 15th January 2023, a Senior Traffic Commissioner consultation ended seeking feedback about the case and proposing interpretation to be applied in this area.

The intended amendments in the Senior Traffic Commissioner Guidance state:

  • the number of vehicles applied for on an application should include the number required as well as any extra to cover an increase in business or emergencies such as breakdowns. A vehicle….may require authority, even if it is not actually being physically driven at the time.
  • being in possession of a fleet of vehicles in excess of the Licence authorisation and then drawing down vehicles to use as and when required, may undermine at least two of the core requirements of the Regulatory Regime, . .. availability of finance required and to have an Operating Centre with the required capacity
  • if a vehicle has only been removed from the licence temporarily and it remains an integral part of the business, it does not cease to be used and, therefore, must be specified.
  • Statutory Off Road Notification (SORN) is required when an operator takes a vehicle ‘off the road’….the Senior Traffic Commissioner has concluded that a vehicle which is the subject of a SORN does not require authority on the operator’s licence, although it may still be relevant to the capacity of the operating centre if stored at those premises.

Interpretation

One hopes this area of licensing will be interpreted sensibly and not inflexibly or too literally. The additional guidance does not definitively cover off at what point a vehicle will be regarded as being utilised.

Does every goods vehicle in possession that is capable of being used on the public highway have to be counted for operator’s licence purposes? What about vehicles that are neither SORNd vehicles nor in what might be termed the ‘operational fleet’, i.e. the fleet intended to be capable of being used in service (however frequently or infrequently)? Are they or are they not ‘an integral part’ of the business? Examples of these are: new fleet to be put on the licence once brought into the operational fleet; retired fleet removed from the licence but stood up / off-road though not SORNd; or goods vehicles whose use is o-licence-exempt but in theory could ‘flip’ i.e. be used in-scope of licensing at any time, if required

It would seem that in practice, operators will have to document very clearly what the fleet is and what is off-road (VOR), so there is no allegation made that a larger licence is needed. It is foreseeable that there may be debate between DVSA and operators at fleet inspections about the vehicles in possession, and one hopes a sensible and pragmatic approach will be taken.

Of course, in no circumstances must any operator specify on and off the licence vehicles from a wider pool as a means of circumventing the need to have a larger licence with the greater financial standing and operating centre capacity requirements. That will be a path to a Traffic Commissioner public inquiry and possible regulatory action.

We will be updating this article – but it is likely Senior Traffic Commissioner Guidance will be adopted in full. We will then see how this area of licensing develops and is visited in new cases, as it surely will be.

 

For more information about operator licences or any other aspects of road transport law, please get in touch with Ashtons Legal through its online enquiry form or by calling 0330 404 0768.

Tim Ridyard, Ashtons Legal

The Cost of Compliance

The Cost of Compliance

1.11.2022 | Industry matters

The Cost of Compliance

Fargo Systems shares why regulatory compliance is a vital element of running a successful transport business, how its TOPS fleet management module supports customers in their compliance efforts, and the realities of being held to account at a Traffic Commissioner’s Public Inquiry. 

Vital for the country’s financial success and contributing 10% to the UK non-financial business economy*, the smooth running of the logistics sector has never been so important. And with over 205,000 logistics enterprises across the country, running a compliant fleet is a pre-requisite for maintaining reputation and staying in business.

As the UK’s leading software provider to the intermodal transport industry, Fargo Systems understands the legislative elements of compliance and the cost-saving and efficiency benefits of running a safe and roadworthy fleet.

Fargo Systems’ Project Director, Jim Slade, says: “Having well-maintained vehicles prevents unscheduled downtime, which can be costly and disruptive to service. The information available to evidence that essential checks have been carried out to specific standards creates an auditable trail necessary for fleet compliance regulations.

“Understanding the regulatory requirements has enabled us to develop a fleet management module that offers a full suite of interfaces, systems and prompts to ensure every vehicle ticks all the compliance boxes and is operated at optimum efficiency levels.”

Offering a host of benefits, key USPs of Fargo’s fleet management system include:
• Fully digitalised fleet management system with secure and robust architecture protecting fleet maintenance schedules.
• A handheld device allows drivers to submit timesheets, defects, expenses, fuel draws and receive operational instructions digitally, all in one place.
• Records certifications, licences, expiry dates, hazards, CPC cards, endorsements, and ADR certificates. These can be validated against cargo movements to ensure you use the right resources for the job.

Gaining the seal of approval from all that use the module, ATL’s fleet director, Jamie Woodward, says of the system: “Quite possibly the biggest advocates of TOPS fleet management system, we use every aspect of the module. It mitigates a host of paperwork and enables us to offer a very slick paper-free service. The benefits that stood out to us and prompted our decision to implement the technology include its appointment management capabilities, the module’s ability to manage defects and how it manages our drivers seamlessly. From licence checks to payroll, holiday allowance, CPC cards and HGV checks.”

Getting the green light from Macintyre Transport’s fleet engineer, Alan Collier, Alan says, “Digitally managing our purchase order process, TOPS fleet management is fully integrated and allocates every PO directly to an asset. It brings control and compliance to our spend.”

Chloe Goddard, Macintyre’s fleet supervisor, adds: “Removing all admin requirements from our drivers, the technology enables them to concentrate on meeting and exceeding our customers’ expectations.”

Ross Mitchell, Transport Operations Director at John Mitchell Haulage and Warehousing, adds: “Increasing our TOPS investment back in 2019 enabled us to go fully electronic with the goal being to achieve Earned Recognition operator status.

“Using TopsTMS® innovative software gives us total visibility of our scheduling and maintenance records and demonstrates our compliance. TOPS automatically reports the fleet maintenance data to the standard the DVSA requires, helping us maintain our Earned Recognition standard.”

For most logistics companies, maintaining compliance is integral to staying in business and being profitable. However, the seriousness of being asked to attend a Public Inquiry in front of the Traffic Commissioner quickly becomes apparent for those who find themselves breaking the law.

Peter Bennett, a transport compliance specialist at VARTAN Consultancy, explains: “Receiving a ‘call to Public Inquiry’ letter is not to be underestimated – and with good reason. Given the genuine risk that regulatory action will be taken against the operator’s licence and transport manager(s), a call to Public Inquiry (or Preliminary Hearing) should be taken seriously.

“It provides you with a chance to demonstrate to the Traffic Commissioner that you have resolved the issues that led to the hearing and that you can be trusted to operate compliantly. When issued with an Operator Licence, the people named on that licence are signing up to abide by 11 undertakings. On numerous occasions, I have seen companies that did not understand those requirements and the consequences of failing to comply.”
The court-like proceedings of a Public Inquiry can be a highly pressurised, stressful, and emotionally draining experience for operators and transport managers.

“As a transport compliance specialist, I have been asked to comment at many Public Inquiries. Considering the Traffic Commissioner’s power to exert potentially career and business-changing consequences, it is a more prudent business decision to operate legally and within the regulatory compliance requirements rather than put your whole livelihood at risk.”

Jim Slade concludes: “Having gained a reputation for keeping Britain moving through the Covid years, and with demands on the movement of goods and warehousing showing no sign of abating, compliance must be considered one of a company’s most important KPIs. Collecting all the required data as a matter of course, the TOPS fleet management module is the logistic industry’s underestimated hero. We would urge customers who have not implemented it or are not using it to its full potential to revisit its capabilities or get in touch to learn more.”

* Logistics UK – The Logistics Report Summary 2021

Full benefits of Fargo Systems’ TOPS fleet management module include:

  • A day scheduler enables available resources to be viewed within a given time (day, week, month). This displays trucks and drivers and tells the user what available and which vehicles is have upcoming appointments booked.
  • Day planner allows you to keep track of holidays and services, enabling the proactive planning of your driver and vehicle repairs making more efficient scheduling for the operator.
  • With the ability to set variable recurring services, MOT and inspection appointments, TOPS will handle your future dates so you never miss a booking.
  • The Fleet Resource record holds all the information you’ll need about your vehicle, from the make and model to the type of light bulb it uses.
  • Customisable inspection sheets and work orders draw all your truck’s details to elevate the productivity of your workshop.
  • The creation and allocation of purchase orders, including the ability to allocate them directly to an asset or store them in stock for later use.
  • Receives ‘TOPS…on the go’ defect report into TOPS, giving your fleet management operation an accessible overview of comprehensive reports.
  • Records fuel and distance mileage, fuel drawn and tacho mileage – reporting on the performance and efficiency of your vehicle.
  • Fleet cost manager –enables reports to be customised to provide a clear Customise your reports, so you have a clear view of your profit and loss.

Image: DVSA Earned Recognition Operator, John Mitchell Transport & Warehousing.

Earned Recognition Operator, John Mitchell Transport