The government-mandated use of electronic logging devices (ELD) by the nation’s trucking industry is another step forward for technology adoption and the use of data in trucking. And McLeod Software, based in Hoover, is a major player in the field.
While the ELD rule was aimed at improving compliance with driver hours-of-service limits, the result also means there is now an onboard technology platform in the cab of nearly every long-haul truck on the road.
Tom McLeod is president and CEO of McLeod Software, which recently bought a 140,000-square-foot office building in Hoover for its new corporate headquarters. The company moved into the new facility last summer, consolidating two locations to the Hoover area. McLeod also has offices in Salt Lake City and Downers Grove, Illinois.
“Last year there was a federal mandate that all trucking companies had to have an electronic logging device in the truck,” McLeod says. “Many of the front runners in the two-way communication and tracking industry have all had similar units installed for the past 20 years, so it is not something new. Some of the better-managed companies were already there, but with the mandate there came kind of a rush of new tracking providers to the space, and we have a sizable market share if they want to interface with us.”
The increase in on-board trucking technology falls squarely in the McLeod Software wheelhouse.
“It’s been a good market for us,” McLeod says. “And we have been able to gradually expand the footprint of what our product will do. We extended from operations to the accounting area, we have an electronic data interchange module, which automates the transfer of information to and from our customer and their customer, which is typically the shipper. We interface with 30 different companies that provide mobile communications systems that go in the truck.”
McLeod attended Samford University, went into sales after college but says that after a few years, felt like he was more technically oriented.
“I went to work with a friend who had an idea for transportation rates. Entry into transportation was deregulated in 1980, and, so, for most of the ’80s, there was a lot of activity with new companies being formed. My friend had an idea on how to restructure the truck load freight rates, and we worked on his idea, and he had some initial success. But when his idea stalled, I was reading all the computer and trucking industry publications, and the truck load carriers were opening up by the hundreds, and I developed the idea for an operations, dispatch, freight billing and driver payroll system to serve the needs of the smaller carriers.
“I got some traction there, and my partner wanted to go work on his idea, so he pulled out and turned it over to me. So I didn’t set out to go into business for myself, but I obviously didn’t back away. So the opportunity was presented, and I began hiring people to see if we could develop this idea. Thankfully, we have had great customers over the years that led us in the right direction.”
In addition to mobile communications, McLeod says the software can track a number of trucking elements, such as fuel transaction service providers, over-the-road purchases being made, and fuel tax reporting, a requirement in the industry on a real-time basis. “We also have interfaces with several different mileage vendors that provide commercial routing and point-to-point mileages that trucking companies and shippers use for billing and for payroll purposes,” he says, and “we interface with several different vehicle maintenance systems where companies keep track of the maintenance that is being done on the trucks.”
It’s a specialized field. Truckers even have their own map apps, to steer them away from routes where an 18-wheeler could get bogged down or crumple against a low bridge.
“Prospective companies that are interested in our product tend to start at about 25 or 30 trucks and up,” McLeod says. “Some customers have several thousand trucks. But when you get to a thousand trucks, the class A, over-the-road truck line carriers, there are only about a hundred companies in the U.S. and a number of those run our product. In the 30 to 100 trucks category, there are about 3,000 companies, and our customer base reflects a slice of that.
“They pay the drivers every week, every trucking company in existence, I believe. So that is a lot of activity,” says McLeod. In addition, if drivers are producing freight bills in a short haul situation, a truck may be hauling two or three loads a day. “In a long haul situation, a truck may be hauling one load a day or maybe a load every two or three days, so our system helps to automate all that activity and the planning. The biggest payoff from our system is being able to see the plan, which helps to minimize empty miles and helps solicit freight for the next load,” says McLeod.
If a truck is running late, the dispatcher gets an alert that it won’t be on time and the dispatcher can call the receiver and reschedule the delivery or pickup.
According to McLeod, his biggest challenge is finding enough skilled people to develop the software — programmers, designers, people to implement the programs and trainers to teach customers how to use the software.
“Trucking people are extremely inventive and they have all kinds of things they want to do with computer systems,” he says.
“We say, ‘Here is what our system requires to run,’ and then they will connect to the internet and we will download our software. Companies have somebody else, and often times we are the somebody else, host the application. At this point, we are hosting about 20 percent of our customers. We have a third party that has a 24-hour operation and automatically does the backups for customers. And we do some things with security that many small or mid-size companies couldn’t do.”
Robert Brothers, McLeod manager of product development, says he thinks the trucking industry will continue looking for ways to increase automation and logistics.
The industry is very fragmented, Brothers says. “Freight is different. People talk about the ‘Uberization’ of freight. Uber picks up people in cars, but that is not the case with freight. Freight has lots of characteristics. It is moved in different ways.”
According to Brothers, McLeod Software’s role “is to take that diverse landscape and build something common so that our users can facilitate their business. Now, that presents challenges because things that are important to one user are not important to another user.”
Brothers says the company provides drivers with an application and “We sit with a driver in their cab and go through their day.”
“The drivers use their phone usually. If it is a driver-operator, he brings his own device. If it is a company, the company will usually supply a tablet.”
Brothers says the increasing population and traffic makes it increasingly more difficult to move goods and that drivers drive fewer miles than they did in the past.
“One factor can be traffic congestion, one factor could be laws have changed in the regulation of how much they can drive,” he says, but “there is the same or more capital investment in a truck. Companies have to change, and we have to change with that. It means they have to be more efficient, and also work with their suppliers. We have to change. We can’t just receive and pick up and deliver freight from 8 a.m. to 5 p.m.”
McLeod has about 450 employees on staff, serving about 950 customers, which includes training customers in how to use the software. The training takes place at the company sites and at customer bases. Brothers says it takes the firm’s internal training department about six to nine months to get a trainer ready to go into the field.
Brothers says McLeod’s products are about efficiency and how drivers can make the best decisions in the planning and execution of moving goods. “It is easier today to integrate lots of data sources than it has been in the past.”
Bill Gerdes and Cary Norton are freelance contributors to Business Alabama. Both are based in Birmingham.