CSMG and SkyBitz Research: Remote Asset Management Yields Significant ROI

December 12, 2008

CSMG, the strategy division of TMNG Global, and SkyBitz, a provider of remote asset management solutions, announced the early findings of an industry research study, The Impact of Remote Asset Management Technology on the Goods Transportation Industry.

Among the results was the finding that early adopters recouped their investment within the first 12 months of deployment and saw returns well over 100 percent within the first five years of implementation.

The report, based on both primary and secondary research, quantifies the substantial value created through the adoption of remote asset management technology by shippers, logistics and third party logistics (3PL) companies and trucking transporters.

CSMG analysts interviewed more than 25 transportation services companies and independent industry experts to gather and analyze qualitative and quantitative inputs for the study. The research identified substantial savings in both operating expenses and capital spending and found that implementation of these technology solutions also supports additional revenue generation. The full report, scheduled for distribution in early January 2009, will detail these and other findings.

"The CSMG research documents what we have inherently understood—that transporters and their customers see impressive and fast returns on investment through remote asset management solutions," said Homaira Akbari, president and CEO of SkyBitz. "The report's findings are a valuable resource to transportation industry companies that need to maximize resources and limit the effects of the current economic downturn and unpredictable fuel prices."

A focus of the study was an ROI analysis among early adopters of remote asset management solutions. CSMG gathered pre-adoption and post-adoption metrics to measure the positive impact of the technology on capital expenditures, operating expenses, incremental revenue generation and improved asset security. Among the important findings in the U.S. trucking industry:

• Improved Trailer Utilization - Remote asset management solutions enable better use of existing trailers by increasing utilization frequency, maximizing loads, and reducing excess detention - thereby reducing the costs of buying or leasing trailers. The average trucking customer is able to increase trailer utilization by 2 percent per year, reducing new trailer purchases by an average of 20 percent per year over 5 years and reducing the number of trailers rented every year by 60 percent.
  
• Fuel Savings - Fuel prices are one of the biggest challenges faced by transporters today. As fuel prices continue to fluctuate, companies must make significant changes to maintain operating margins. Even with the recent dip in diesel prices, trucking companies can achieve savings on the order of $500-$1,000 per tractor per year depending on diesel prices.

Further, the report will feature a case study of a truckload hauling firm operating 3,000 trailers and 1,111 tractors. Based on full deployment of a complete remote asset management technology solution, the company achieves a full return on their technology investment in less than one year, by realizing a $1.9 million reduction in capital spending and an operating expense reduction of $1.8 million during the first year of operations.

The report also finds that among publicly traded carriers, early adopters also experienced much greater growth in earnings-per-share - with annual rates between 28 percent and 54 percent over the last four years - as compared to growth between 9 percent and 27 percent for non-adopters over the same period.

The report reveals many opportunities and approaches that can allow carriers, shippers and third-party logistics providers to realize savings, efficiencies and higher customer retention in areas such as:

• In-transit Visibility - Status and progress reports on movement of goods keep all players in the value chain better informed of delivery schedules.
  
• Fleet Dispatch Optimization - Companies achieve increased asset utilization and lower costs through right-sizing of fleet resource allocations and optimized transportation routing.
  
• Supply Chain Management - Users can optimize the efficiency of goods movement along the supply chain by analyzing accumulated data regarding the location, movement and status of those goods.
  
• Remote Monitoring and Control - Intelligent sensors monitor mobile or fixed assets to measure and collect operational data, diagnose and locate problems, and reduce the costs of transportation to and from remote sites.
  
• Safety and Security - Assets like high-value goods receive better proactive and reactive protection. Potential liabilities are limited by monitoring hazardous materials or explosives that represent potential threats to human safety or environmental integrity.