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How To Solve The Empty Truck Dilemma In Malaysia

We have exposed some alarming facts about the Malaysian logistics industry; In a recent back load study 77% of trucks were found to be driving empty on Malaysian roads. We have revealed who, how and why in the fully published research results. Discover why every Malaysian should be concerned at these results and how this issue involving 1000's of trucks can be resolved.

Research Objective

To assess the impact of empty return load trucks on the land
transportation sector in Malaysia

Background Research

Empty back load (percentage of empty return load trucks worldwide where data is available)

  • Hong Kong 46%
  • Holland - 40%
  • UK - 29%
  • USA - 28%
  • Germany - 25%

Source - European Environment Agency: http://www.eea.europa.eu/publications/ENVISSUENo12/page029.html
Source - NPTC National Private Truck Council USA: http://www.nptc.org/index.php?option=com_content&view=article&id=538:benefits-of-fleet-optimization-center-march-2009-issue&catid=24:fleet-owner&Itemid=534
Source - Hong Kong Transport Department: http://www.td.gov.hk/filemanager/en/publication/gvtcs2003_e.pdf

Empty Truck Back Load Survey

77 percent empty back load graph

A Comparison - Sub Con Hauliers To Non Sub Con Hauliers

Analysis of empty truck prevalence for hauliers who participate as a sub-contractor to a larger player against the hauliers who negotiate their transport work direct with the customer.

Sub con haulier comparison to non sub con haulier pye chart

Analysis Of Small and Medium Hauliers Operating As Sub Contractors To Larger Players

Haulier sub con and haulier non sub con analysis graph

The significance of this data is the 51% of hauliers that have previously worked as sub contractors to larger players but now refuse to for the reasons stated (see survey answers below).


Addressing their needs of getting goods into their vehicles for return journeys would encourage them to reassess their position on sub-contract work.


A large proportion of this group would again add their names to the approved sub-contractors lists of larger players if the probability of obtaining back loads were to increase significantly.


This will lead to an increase in the number of truckers available for large players on any given day.

Problem Analysis Solution

Early Research Trends

We found that the very large transportation companies in Malaysia seldom suffer from empty return loads and claim less than 5% empty return journeys. So we asked how they achieve this, here is what we found. A typical large player set up is; A main hub in Klang valley with further hubs in Penang and Johor (some have more but this is the basic set up).

Example scenario on any given day:

If they have volume of goods to be carried equivalent of 40 trucks going to Johor but only goods for 25 trucks on the return journey then they will send only 25 of their own trucks and use hauliers from their list of approved sub-contractors for the balance of 15 trucks.


Further to this some large players use only small players for certain routes because they know it is difficult to get backloads.


This does not solve the empty backload scenario, it just passes the problem to smaller players with less resources to deal with it.

Because of this we decided early on to concentrate our research on small transport companies only.

Survey Details

Survey Questions - 100 Small Co’s Surveyed


1. How many trucks does your company own?
2. On average, how many deliveries per month do you do in excess of 100km (distance not including return journey)?
3. On average, how many empty truck return journeys per month on these in excess of 100km deliveries?
4. What percentage of these deliveries in excess of 100km are subcontract to larger company?
5. Why do you choose not to do sub-contract work to larger Co’s?
6. Did you ever do sub-contract work for larger Co?


Results Of Survey


1. Total of trucks owned – 329
2. Deliveries over 100km – 1103
3. Empty truck returns – 849 (77%)
4. 188 (17%) of these deliveries were sub contract to larger Co's while 42% of Co’s surveyed currently sub-contract to larger Co’s
5. On sub-contract work margins are very small so if no backload we are lucky to break even or make small profit - Also blame late payment (these were majority answers)
6. 93% have previously done or currently do sub-contract work


Summary Of Survey

• 77% of deliveries suffer empty truck backload
• 84,900kms driven by empty trucks/month
• 169,800kms will be driven delivering goods on these routes where our survey respondents are driving back to their base empty
• Extrapolated figures for 1,000 small Co’s would be 849,000 kms driven by empty trucks every month in Malaysia
• Extrapolated figures for 10,000 small Co's would be 8,490,000 kms driven by empty trucks every month in Malaysia
• 93% of small Co’s either still do sub-contract work or have previously been a sub-contractor to larger company while 51% choose not to anymore
• Of the sub-contract jobs 160 had empty backload, that is 85% of the 188 deliveries


#NOTE# These figures are for the minimum 100km delivery scenario, real world distances will be much higher.

77 percent empty trucks driving Malaysia

Study Conclusions

The inefficient running of empty trucks eats into a limited driver resource that has been an issue for a long time in Malaysia but never properly resolved.

In the UK the proportion of empty back loads dropped from 33% to 29% over a period of 16 years. The main reasons cited as contributing to this were the expansion of load matching services (freight exchanges) and hauliers making greater efforts to get return loads.

Small and medium hauliers are discouraged from operating as sub contractors to larger players with the main reasons being:

1.Difficulty in getting back loads on these jobs
2.Small profit margin
3.Late payment

The first two points can be addressed by following the methods used in the UK & Germany where load matching services have proven successful in reducing the number of empty return load journeys.

Solving the empty back load issues in Malaysia will lead to a reduction in goods vehicle journeys without impacting the total volume of goods to be delivered on any given day.

If small & medium hauliers believe they have a good opportunity at getting goods for their return journey they will be far happier to accept more sub contract work from the bigger players.

Similarly, backloading stops a truck travelling in the return journey direction; Meaning every successful back load increases by one the number of available drivers on any given day.

We have identified major inefficiencies in the land transportation sector of Malaysia.
We want to share our research & propose a solution to the empty backload issue in Malaysia that is affecting thousands of small hauliers.


Small hauliers in Malaysia do not have a voice and after speaking at length to hundreds of them we have identified a massive issue that is an unintended consequence but, never the less, it is severely affecting the whole logistics industry in Malaysia, Namely; Empty Backloads.


This inefficient running of empty trucks eats into a limited driver resource that has been an issue for a long time in Malaysia but never properly resolved.

Solving The Empty Truck Dilemma In Malaysia

What Is The Solution

The solution is simple - Target Goods Into The Tens Of Thousands Of Empty Trucks Operating Every Day On Malaysian Roads.

How?

Follow the German and British method of reducing empty backloads for hauliers by encouraging the use of online haulage exchanges.

Green Logistics

Haulage Exchange Benefits

Hauliers can list their empty backloads and if you need goods transporting that match the route and date then just call the haulier.


Not Just Backloads


Anyone can list their goods or load for transportation for free knowing that approved transport companies will contact them wanting to deliver their goods.


Specific Benefits


• Deflationary, Goods Can Be Transported At Reduced Costs On Backloads
• Creates Competitive Environment, More Options For Business To Deliver Their Goods
• Reduce GHG Emissions
• Reduce Congestion
• Less journeys without impacting volume of goods delivered eases demand on small resource of drivers


Is The Benefit Measurable?


Yes, we can record the reduction in the number of kilometers saved and aggregate this total. Then we can use the kilometers saved to calculate the volume of GHG emissions that have been saved (see last 3 pages of PDF for example calculation).

Who Benefits?

1. The customer is happy if they can book an empty return load for the transportation of their goods because the rate is reduced.
2. The trucker is happy because he has increased his margin on what would have been non paying return miles driven without a load.
3. The environment, because a more efficient land transportation system reduces the kilometres driven while still delivering the same volume of goods, in short less GHG's unleashed on the environment.
4. All road users, because a more efficient road transport system reduces congestion.
5. Large logistics companies, because when the volume of goods to be delivered is not impacted by a reduction in transport journeys of goods vehicles due to diminishing ineffieciencies this means there is less demand on the resource of drivers available.


Put simply, Online Haulage Exchanges aim to create a Win/Win situation for both parties in the transportation of goods as well as helping the environment, helping to reduce traffic congestion and easing the burden on a limited number of drivers

Download the pdf

Written by Administrator on Monday January 12, 2015
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