Podcast Interviews

The Integration of Supply Chains and Independent Repair Shops

Learn about the advancements in technology we are seeing in the trucking industry.

Episode 111: In this episode, we discuss how supply chains have changed over the last decade, and the advancements in technology we are seeing in the trucking industry.  On the show we had Seth Clevenger, the Managing Editor of Features at Transport Topics to discuss the future of the heavy-duty industry with us.

To get the latest news, go to TTNews.com

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Complete Transcript of Episode:

Jamie Irvine:

You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine, and this is the show where you get expert advice about the heavy-duty parts you buy and sell, and keep you informed about what’s happening in the industry. The trucking industry is changing rapidly. Global forces are impacting supply chains and technology is transforming the commercial trucks and trailers that we see on the road. How does this impact the independent service channel? My guest today is Seth Clevenger. He is the managing editor of Features at Transport Topics. And I’m looking forward to talking to him today about all of these changes in the industry. And we’re going to really focus on how it’s impacting the independent service channel, Seth, welcome to the Heavy-Duty Parts Report. So glad to have you here.

Seth Clevenger:

Well, thank you, Jamie. I really appreciate the time and opportunity. Thanks for having me on.

Jamie Irvine:

So when we look at the supply chain over the last decade, I know right now there’s some really pressing issues, but I kind of wanted to look at it from a bit of a historical perspective. How have supply chain changed over, let’s say the last decade, and then as we continue our conversation, we’ll talk about more present day challenges.

Seth Clevenger:

Sure. I think that’s a great place to start. For certain, shipper expectations have increased in recent years. You know, I think of big retailers like Walmart now have really stringent requirements for the motor carriers to deliver on time and in full. And that’s just a new reality in the transportation industry that motor carriers and freight brokers, three PLs are working with. And that means that data is really important. Freight visibility is really important. A lot many shippers now want an accurate ETA, if there’s a delay, if there’s something happening, weather, construction that’s going to delay a truck, they want to know as soon as possible, they want to be able to schedule accordingly and really be able to respond in a nimble way. So there’s, I think a movement toward shippers and carriers and logistics providers working more closely together to help streamline the system. And that’s just going to have to happen more and more to meet these demands. And another huge trend over the last decade has been e-commerce there’s been a lot of ripple effects for the supply chain of course. That depends a lot on what industry you’re in and what type of freight you’re delivering, of course. But I think warehouses in general are going to start moving closer to the end consumer as a necessity to help meet some of the faster delivery times that we’re starting to expect as consumers. We’re pretty spoiled now where it was not just two day delivery, you can pay a little bit more for one day, or same day delivery if that’s what you want. But to pull that off is a transportation challenge. So companies are looking at where their hubs are located, where the warehouses are located. And of course, a lot of communication and information flow is really important on the transportation side to really make that happen. And you mentioned some of the issues that we’re having right now in the supply chain. It seems like the whole economy is running out of stuff. You know, there’s not enough raw materials, there’s not enough components for manufacturers, so prices are going up and that’s something that really the whole transportation industry is feeling not just the manufacturers and suppliers, but also the end users and the folks who repair the trucks.

Jamie Irvine:

Well that’s where I wanted to get to, you know, as you were talking about e-commerce my wife and I were driving past a brand new Amazon warehouse. And it is in a very convenient location with access to a ring road around the city, but it’s not a location that you would typically see a retailer ever be in before. Before it was all about foot traffic. It was all about people being able to come. And when you’re selling heavy-duty parts, you used to put your stores in those kinds of places. You followed that same route because you were trying to get the most access for people to get to your store. And you were also delivering parts out to your repair shops. So as the whole industry shifts, this is having a big impact on the repairs side of it, the parts side of it. And how do you see those trends kind of impacting specifically the independent service channel?

Seth Clevenger:

Yeah, and that’s a great question. I think that repair shops really should be thinking first and foremost about, you know, supporting their customers, their trucking companies that rely on them to meet this higher bar of service for their customers the shippers. And a lot of that of course just means vehicle uptime. That’s more important than ever, that’s all we’ve been hearing from fleets about how important it is for a fast turnaround on repairs, but information is very important. So, you know, where is the vehicle repair process, having that kind of information is going to be really essential moving forward. So I think that this march toward more uptime to the faster repairs, that’s just going to continue, technology is going to help support that. And repair shops of all types are, I think, are going to have to find ways to streamline their processes and turn it around faster, and also make sure that the fleet makes sure that the truck operator is aware of where things stand. So it can be as efficient as possible.

Jamie Irvine:

It’s really a complete change in operations for both supplying parts and fixing trucks on the independent side. What I’ve seen is in my career, things were going from mechanical to electric. To now, where if you’re not able to tap into all of that data, that telematics and all of that technology, you’re just not able to provide the fleets and the end users with the service that they need. So when we look to the future, what should the aftermarket, the independent side be doing to position themselves to actually be able to thrive moving forward? We don’t want them to just survive. We want them to actually be successful.

Seth Clevenger:

Yeah. And I think that there’s a blueprint set, I think by the OEMs and some, some level with the, you know, this, this big push toward remote diagnostics that’s become something that every truck manufacturer in North America has really focused on the use of telematics data like remote fault codes being shared as they’re happening out on the road, it was not something you discover later on when the truck pulls into a terminal or a repair shop, it’s something you know as it happens. And that’s an example of the ways I think independent shops can work with our customers as well. And this a little tougher, I think perhaps but communication is key. I think, software to really manage and communicate again where the vehicle is in the repair process, closer partnerships between repair shops and their trucking customers, there’s opportunity there. And that just goes to help the trucking company manage again, this higher bar for service that they’re trying to meet if they know that this repair process is going to take awhile they can make better business decisions. They’ll know that either the truck will be ready in time, or okay, maybe I need to repower a load. Maybe I need to come up with a plan B. And that makes all the difference for them. And it’s not just the shipper it’s also the driver. You know driver satisfaction is so huge for trucking companies, anything they can do to get the driver back on the road as soon as possible, especially now, I mean, I’ve been hearing about driver recruiting and, driver retention are such a focal point for fleets for as long as I’ve been covering the industry for 10 years. And I think it’s tougher now than it’s ever been, just because of the broader economic conditions, there’s job growth. And it seems like everybody across just about every industry out there is trying to hire more workers. It’s not just, you know, the service industry, it’s not just fast food that can’t find anybody to work anymore. It’s trucking and it’s tough. So fleets want to really make sure that their drivers are happy. So that’s also really powering this. Anything that repair shops can do to make life easier for the driver. Even if you say like a driver lounge, stuff like that can actually make a big difference, but above all, it’s getting that truck back out on the road as soon as possible.

Jamie Irvine:

We’ll be right back. We’re just going to take a quick break. If you’ve ever thought about starting a mobile repair shop, or you’re looking to take your shop on wheels to the next level, you need to read How to Start a Mobile Repair Shop. This free e-book from Fullbay walks you through everything you need to know to get started and to scale your business, grab your copy at fullbay.com/mobile. Fullbay is the leading heavy-duty shop management software solution for fleets and independent repair shops. So they know a thing or two about how to run a successful mobile operation. Grab your copy of this free e-book at fullbay.com/mobile. We’re back from our break. And before the break, we were talking about the changes to the industry, how it’s impacting the aftermarket and the independent service channel. We were talking a little bit about the opportunities. Seth you kind of ended with the thought that it’s all about, instead of being reactive like we used to be, it’s about being predictive and trying to better meet the needs of the vehicle owners. And I think that’s such an important part of success moving forward.

Seth Clevenger:

No doubt about that. And you know, it’s actually pretty fascinating to see how trucking equipment is changing, right? I mean, we’ve seen a lot of this over the years with emissions regulations and the job of the truck technician has gotten that much tougher because there’s so much complexity. And we’ve seen how some of the big steps in 2007 with DPFs. In 2010 SCR comes into the mix and the diesel exhaust fluid, and some of the refinements more recently with greenhouse gas emission regulations which are in progress now, we’re moving on toward the second part of phase two of the greenhouse gas emissions regulations. So we’re certainly watching that and to pick up on a point you made earlier about how the shop environment has changed, it really is amazing to see how much diagnostics software plays into modern truck repairs and maintenance. You know, of course, turning a wrench is still very important. But so much of this is now digital and data-driven, that has been very interesting to watch. And I think that that trend will continue as we see more and more advanced emission systems pushed through regulations.

Jamie Irvine:

Yeah. And especially with the aftertreatment system, as we move towards that, I believe it’s in 2027, when they’re trying to reduce the NOx emissions. It’s already reduced at 90%. Now they want to reduce the remaining 10%, a further 90%. So when I see that trend and that move towards that, to your point, when it comes to the diagnostics, when you look at the aftertreatment system, it’s really about looking at the entire system we can’t just throw parts at the symptoms. I think that was some of the mistakes that were made early on with aftertreatment.

Seth Clevenger:

Yeah. And you know, I think that you’re right, the further NOx reduction that’s coming down the line, I think, is going to be the next big change in engine architecture. The greenhouse gas emission regulations also brought some benefit to the industry for improved fuel economy. You know, that’s really focused on carbon emissions and that didn’t really introduce dramatic changes. It wasn’t like, you know, again, adding SCR or adding DPFs or adding EGR, some of those major changes, but when you look at ways to reduce NOx further than that might be, what’s coming down the line for diesel engines. And you know we’re waiting to see exactly how that takes shape. You know, California is already moving in that direction in 2024, but you know the EPA at the federal levels is looking at the same thing, potentially proposing tighter standards for, for NOx and even particulate matter further down the line.

Jamie Irvine:

We’re in such a state of flex, I find it interesting to have these dates and targets, and they’re not even really sure what the regulations are yet, but they’ve got the date so they’re moving towards that. This also really introduces alternative fuels. So what are you seeing with the emergence of the battery electric trucks and, you know for awhile it seemed like every truck OE had a press release coming out announcing their electric trucks. So this is obviously a massive shift in the industry. And I’d love to talk a little bit more about how you’re seeing that, especially how it relates to impacting people who are not at the OE level, but aftermarket and independent side.

Seth Clevenger:

Yeah. Well, this is a really fascinating time for commercial vehicles to be sure, I mean, this is kind of a whole new world. This is such a different vehicle type with battery electric. You don’t have an internal combustion engine for starters and it’s just a very different type of vehicle. Now it’s gonna be a gradual transition. Like you said, all the truck OEMs have introduced some form of battery electric truck. And you know, the question of course, I think is a matter of timing. You know, I do think that this is coming, this is real. This is not, and it’s not just going to be a niche in a product for a few companies. And this is something that’s going to grow over time, but it’s going to start with applications that are well-suited to the technology today. So that’s shorter ranges for the most part. And like local delivery is a good one. Maybe some regional port drayage is a good one. And of course certain vocational trucks, refuse trucks, for example, something that could move toward electrification sooner rather than later. And, you know, it’s not just government, that’s pushing this. It’s not just regulations it’s also a good swath of corporate America that’s really pushing in a lower emissions toward environmental sustainability and that’s driving a lot of it. You know, I think of companies like Walmart and Amazon are really investing in the committing to EV technology. And in trucking, you know, some companies are certainly going to be early adopters, and we’re seeing that now some companies have been running these vehicles and essentially a trial basis for a couple of years now. And we’re right at the cusp of the first commercial roll-outs at, you know, relatively small scale. But it is something that will ramp up, I think, gradually over time, but this is real, it’s coming. And that really does open up whole new world for vehicle repair, maintenance, because they would have some very different components on the vehicle now, not only the electric motors, but you know, electric batteries, you’ve got all these cooling systems designed to support the EV and make sure that the temperatures or where they need to be. But it won’t be everybody, you know, if you’re mostly servicing long haul, over the road, truckload carriers today, you’re probably not going to see a bunch of electric class eight trucks pull in a year from now, it’s more if you’re servicing say local delivery, some of that’s medium duty, some of that’s heavy-duty. If you’re near the ports with port drayage, that’s an area where we might see it sooner rather than later. Fleets that aren’t limited by weight, so if you’re not topping out at 80,000 pounds, you know, the payload might make sense for more sense for electric because the batteries are really heavy. So if you do top out at 80,000 pounds, the batteries are going to cut into that pretty substantially. So a regular route, over the road truck load is going to be diesel the longest, but we’re certainly going to see certain applications within trucking where this is a whole new world that that’s going to come into the industry. And a lot of training, a lot of in the early days, I think that a lot of that’s going to be specialized work working with electrical systems and EV batteries, or maybe that skews more towards the OEM. But as that grows, independent shops are going to have to learn that as well, the market will evolve, the industry will evolve to the point where that will be needed. And the question is when right? I think it’s coming, you know, electric trucks are coming, and it’s just a matter of how soon, how fast the adoption rates are. And I think it’s something we’re going to see over the course of the coming decades.

Jamie Irvine:

Carb released a report about bio diesel fuel not that long ago, just tracking that over the last 10 years, we’ve also seen some recent reports about the hydrogen-based fuel. So I think that, to me, it seems like we’re going to need a mixture of all of these different types of technologies to be able to cover the entire industry, because to your point, there’s so many vocations, like, I’m sorry, but I just do not see running a fully autonomous electric vehicle in the oil sands or in some logging application in the next five years. Like maybe down the road, but not in the next five years, that’s just not going to happen. But that doesn’t mean we don’t need to make moves to try to solve this problem. So how do you see these other alternative fuels playing a role in what we’re going to see in the next few years?

Seth Clevenger:

Yeah, there’s a lot of interest in, and a lot of investments right now in hydrogen fuel cell. And that’s where you start to get to a pathway for long haul trucking. Again, you know, EVs and just pure battery electric you’re really limited by the range. You’d need so much heavy batteries on the vehicle to give you the range that you want, that it becomes economically just isn’t feasible. But with hydrogen fuel cell that essentially can conserve as a range extender for electric trucks. And that really is still, it’s a zero emission truck and you have battery electric technology, but instead of relying on the batteries for power storage you’re using hydrogen. Problem there, of course, is that you need the infrastructure to support that. So just as electric trucks will need a charging stations, a hydrogen electric truck will need a hydrogen fueling station as well. So, you know, there’s still a need for infrastructure to support a technology like that, but that does give you a pathway to zero emissions for long haul. I think that that will take longer than battery electric but down the line, you see the big OEMs are investing in this pretty seriously. And I’ll just add that I think that there’s still a place for natural gas, you know, compressed natural gas that is a niche operation. It is a cleaner burning fuel than diesel. And there are some shippers who prefer that, you know, there was a time about a decade ago, a little bit less than that when it sure looked like natural gas was poised to just take off that did not materialize. Part of that, of course, was, uh, domestic energy prices really came down. I mean, it used to be, you know, $4 a gallon diesel was starting to become the norm. And that’s when natural gas started to look pretty attractive, but prices are starting to tick back up again to say the least, but, you know, we’ve settled into a more stable energy prices and more stable diesel prices that kind of took the wind out of the sails for natural gas trucks. But there are still companies operating that, that are having some success with it. You know, it stayed a relatively niche market within trucking, but they’re still, I think that can still serve as a, sort of a third option. If you’re looking at EV it was some type of zero emissions technology and a diesel, which is going to remain the industry’s main fuel for, for some time to come. But I think there is still that pathway ahead, it’s not a huge pathway, but there is a place for natural gas I think in the coming years.

The Integration of Supply Chains and Independent Repair Shops
Episode 111

Jamie Irvine:

We’re just going to take another quick break. We’ll be right back. The way we buy things has changed over the last year. We’ve all grown accustomed to the ease of online purchasing. This is no different in the heavy-duty truck parts industry. Buyers are looking for a streamlined digital experience where they can quickly find the part they’re looking for. If you’re looking to get started with e-commerce, there’s no better partner than Gen Alpha Technologies. If you want to learn more or schedule a free demo, make sure to head to genalpha.com that’s G E N alpha.com to start maximizing your online potential. Before the break, we were talking about some of the major changes in technology around how trucks are powered. Now I’d like to shift gears, Seth, and talk to you a little bit about all of the safety. There has been such a change in the industry from when I started like in ’98 to today, ABS, we’ve got ADAS, we’ve got all of these safety systems, this impacts independent repair shops and, and aftermarket suppliers, because they now have to educate themselves about these. Like, what are you seeing with the move toward these safety systems? How does it impact the independent service channel and where are we really going in the future?

Seth Clevenger:

Yeah, I mean these safety technologies are becoming more common. In some cases they’ve been on the market for quite a while. In adaptive cruise control, collision mitigation, these aren’t new anymore, but we’re seeing a broader acceptance, more companies are choosing that technology when they order a new truck and we’re starting to see secondary owners and there’s definitely a move in this direction for a number of reasons. You know, of course we’ve seen a lot of nuclear verdicts, you know, just these multi-million dollar jury awards against trucking companies and in some cases involving truck crashes and that’s really sent the insurance market into a bit of a tailspin and it’s tough now to even really, really safe trucking companies are seeing the rates go up and anything you can do on the safety side can help to protect you from that so that’s driving part of it. And there may be a regulatory angle as well, you know, NHTSA is considering mandating automatic emergency braking on trucks in the future, that’s in the works, it hasn’t been formally proposed yet, but that’s something that may happen. Europe has gone down that direction already. So that’s something that’s a possibility. So repair shops of all types should expect to see more trucks equipped with this type of technology in the future. It’s only going to increase and, you know, that adds radar, camera sensors on vehicles. Some of that work I imagine is fairly straightforward. Others, you know, might be more technical, but right now these systems are supplied by companies like Bendix, and Wabco, Wabco is now part of ZF. And you know, Detroit has his own line of app active safety systems for Freightliner trucks as well. So again is going to be more common if you’re not seeing it a lot today, you will be in the future. And, you know, we’re even seeing some levels of early steering assistance coming in. So lane departure warnings are turning into some form of lane control where if you don’t have your turn signal on as a driver and you start to veer from your lane, you know, you won’t just get a beep, you’ll get a rumble at the wheel and maybe even some corrective steering action to keep you in your lane. Driver can still override that, you know, the driver is still driving for a system like that, but that’s just a glimpse at where that’s going, more and more advanced systems to help out the driver and continuing this push for safety, because you know, the liability risk in the trucking industry is so huge. And it’s going to be important to be able to repair those systems and maintain those systems because they’re going to be mission critical.

Jamie Irvine:

From the parts perspective, as a former parts person, I can see the whole training need for parts people being dramatically different. You know, we’re not just going to be taking out a tape measure and measuring an S cam or something. It’s going to be a completely different experience for parts people. Now, as you were talking about all of this, I’m thinking about the repair shop, we know there’s a bit of a repair technician shortage, as well as parts technician shortage. And I say a bit, that’s probably a huge under understatement. So how does all of this advancement in technology, does this accentuate the problem and make the technician shortage even more relevant and make it even a worst problem? Or is this going to, in some ways perhaps solve the problem and which way is it going to go?

Seth Clevenger:

Yeah, well, that’s a great question. I think maybe it’s a little bit of a double-edged sword because of course there’s a lot of change, you know, it was a constant change and there’s always something new to learn. You know, you can be on top of your game and know everything there is to know about today’s trucks. And then two years it’s out of date because so much has changed. So that adds some challenge of course, to the training requirements. But I think there’s also an opportunity that perhaps this may make the job more appealing for that younger generation that we need to bring into the industry and also likes working with technology. I think that there’s a public messaging aspect to this for the whole industry, the whole trucking industry that, you know, these technician jobs, are maybe not what you might envision they are. I mean, you’re working with diagnostic software and some high-tech vehicles now. It’s not just that turning of the wrench that you might think of. And these are advanced jobs, they’re jobs that deserve a lot more respect than they get in our society. You know you’re a problem solver and these are stem jobs, right? I mean, maybe not a four year degree, but you’re still being trained on some high tech equipment. You have to understand you have to be technologically adept. And I think that that might excite the next generation, especially those who are really into technology, but still like to work with your hands. So you’re not just on the computer all day sitting in a cubicle, you’re actually out there, you’re on the floor, you’re working with some pretty cool vehicles. You know if you like vehicles in general and you know, you don’t have to be working on a car, you can work on a big truck too. And you know, I think that this can be a recruiting tool in some respects for diesel technician training schools and for repair shops, for trucking companies that have their own repair shops and maintenance shops. The whole industry, I think, should be promoting the job of the diesel technician. And I guess no longer just the diesel technician, but maybe an EV truck technician down the line as something that, you know, it can be a real exciting career opportunity for the next generation, because it is, I mean there are jobs that are exist they can’t be automated away. They can’t be shipped overseas. We need people here who are experts on this because no matter what, you need the trucks to be moving, to keep the economy moving. So there are really great opportunities for a lot of people. So it’s a shame to see so many jobs that are, that are well-paying jobs that are hard to fill. So hopefully that next generation is coming up they’ll look at our industry and see the technology is something that’s exciting to them, not onerous to them. It’s something that I want to work on the electric truck. I want to work on some of these safety systems and you use all this diagnostic software to solve problems. And I think that is a great fit for a lot of people that if they would only give it a chance and look at it as a pathway.

Jamie Irvine:

Seth, we’ve covered a lot of ground today. If there’s one thing you want our listeners to remember from today’s conversation, what’s that one thing?

Seth Clevenger:

Well, I’d say that the trucking industry is changing, and the pace of technology is accelerating and that’s going to continue, in some ways that makes it a challenge, but it also makes it exciting. You know, I think that through it all, though the core values of customer service and trusted relationships trust is so important and trucking and any sort of business relationship that’s between the carrier and the shipper rest between, you know vehicle operator and the maintenance shop that’s going to be repairing the truck. You know you want to know I can trust you and that doesn’t go away, no matter what the technology is, no matter how the trucks of tomorrow look, no matter what software does with machine learning, and who knows what else. It still comes down to people and businesses who can trust each other and can count on each other. So that core is going to be the same. And no matter what the technology looks like. I kind of joke that the real miracle would be a truck that never breaks down. It’s not an autonomous truck. It’s not an electric truck, a zero-emissions truck. We’ll have those long before we have a truck that never breaks down. So, you know, these are important jobs that aren’t going away. You know, I think it’ll be fascinating to watch all this develop, all the changes, the core stays the same. You know the mission remains the same. We’re just going to be working on some different trucks and maybe getting there in newer, more efficient ways.

Jamie Irvine:

You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine, we’ve been talking to Seth, who’s the managing editor of Features at Transport Topics. To learn more and get the latest news from Transport Topics, head over to TTnews.com links are in the show notes. And Seth, you have a podcast it’s called Road Signs, is that correct?

Seth Clevenger:

That’s right. Yeah. So Transport Topics does have its own podcast. We’ve been going for a couple of years now. And it’s a lot of fun. We do spend a lot of time on a lot of the topics we just discussed here. And, you know we’re really looking at the future of the industry and that’s in terms not only of technology, but also the trends that are important. We talk a lot about workforce development in the transportation industry. So if you’re interested in the trends and technologies that are really shaping the future of the industry, please check out Road Signs. You can search Road Signs or Transport Topics available through all the usual channels, Apple Podcasts, Spotify. It’s a lot of fun, it’s a fascinating industry, still haven’t recorded a boring podcast yet in my own biased opinion.

Jamie Irvine:

Seth, thank you so much for being on the show. I really appreciate you being here today.

Seth Clevenger:

No, I really appreciate the conversation and the great industry we serve. And thanks for having me on.

Jamie Irvine:

Thank you so much for tuning into this week’s episode of The Heavy-Duty Parts Report. I’m your host, Jamie Irvine, and I would just like to remind everyone to focus on cost-per-mile, and let’s keep those trucks and trailers rolling.

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