Omnitracs Industry Intelligence Report Understanding the

Understanding the Present to Predict the Future

Omnitracs Industry Intelligence Report

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Omnitracs Industry Intelligence Report

ContentsIntroduction ................................................................................................ 3

Long-Haul Transportation Activity ........................................................... 4OT Long-Haul Miles Index .................................................................................................. 4

OT Long-Haul Miles vs. TSI Freight Index .......................................................................... 5

OT Long-Haul Miles vs. TSI Freight Index and GDP ........................................................... 6

COVID-19 Pandemic Effect on Converted Paper Product Manufacturing .......................... 7

COVID-19 Pandemic Effect on Sporting Goods ................................................................. 8

Miles Growth by State ........................................................................................................ 9

Manufacturing Miles and Manufacturing Sales Index ....................................................... 10

Retail Miles and Retail Sales Index ................................................................................... 11

Month-to-Month Percent Change of Major Sector Miles .................................................. 12

Miles Per Vehicle ............................................................................................................... 13

Percent of Drivers Who are Active .................................................................................... 13

Last-Mile Transportation Activity ........................................................... 14Last-Mile Stops Serviced .................................................................................................. 14

Last-Mile Equipment Capacity Utilization ......................................................................... 15

Last-Mile Manufacturing Stops vs. Manufacturing Sales Index ........................................ 16

Last-Mile Retail Stops vs. Retail Sales Index .................................................................... 16

Last-Mile Wholesale Stops vs. Wholesale Sales Index ..................................................... 16

Last-Mile Grocery and Alcohol Stops Percent Change ..................................................... 17

Safety ....................................................................................................... 18Speeding Events per 10k Miles ........................................................................................ 18

Top 10 Days of Speeding Events ...................................................................................... 19

Percent of Drivers Who Speed .......................................................................................... 19

Number of Blackspot Locations ....................................................................................... 20

Summary .................................................................................................. 21

The great scientist and astronomer, Carl Sagan, said, “You have to know the past to understand the present.” If you think about it, at this moment, we are living in the past – the future’s past. Which is why it’s important to understand the past to predict the future.

As a leader in SaaS-based fleet management and data analytics solutions – and a pioneer in transportation technology – Omnitracs processes hundreds of millions of vehicle events per day across North America alone. In 2020, this amounted to more than 100 billion long-haul miles and half a billion last-mile stops across more than two dozen industry sectors.

But, having the data (lots of data!) doesn’t help Omnitracs, our customers, or the industry if it simply sits in our data warehouse. Rather, with a team of data scientists and analysts who have a deep understanding of the data, Omnitracs provides insights and understandings to help predict future trends to help drive the transportation industry forward.

Omnitracs North American Position Density

Map displays the calls from just one of many Omnitracs data sources over a two-week period.

1.00 M or more

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Introduction

The Omnitracs database continues to grow, even during a worldwide pandemic. More fleets using more tools in more vehicles.

84,781,874

64,897,006

39,341,773

2016 2017 2018 2019 2020

126,074 794,006

Database Growth from 2016

Overall, the long-haul transportation industry is alive and well.* While the key metrics for long haul changed from month-to-month in 2020 due to seasonality and the effects of COVID-19 (Figure 1), the demand to deliver goods and services are still there, as evidenced by a 39% increase from 2019-Q4 to 2020-Q4. The Omnitracs Miles Index™ is the sum of miles per customer by month divided by the base year.

Long-Haul Transportation Activity

*Long-haul trucking is any form of trucking where drivers are expected to spend the night away from home, as the journey is too long to be made in a day.

Even with COVID, the demand for goods and services increased nearly 40% from the end of 2019 to the end of 2020.

Figure 1

Omnitracs Long-Haul Miles Index

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U.S. port activity starts dropping sharply

U.S. Emergency Declaration (3/13), statewide shutdown

begins, and HOS relaxed (3/14) Phased reopening begins

Notable increase in U.S. port activity


Now let’s measure the Omnitracs Long-Haul Miles Index to the Transportation Services Index (TSI), created by the U.S. Department of Transportation (DOT), Bureau of Transportation Statistics (BTS), which measures the movement of freight by the for-hire transportation sector (Figure 2). The index, which is seasonally adjusted, yields a monthly measure of transportation services output. Research shows that changes in the Freight TSI occur before changes in the economy. With the TSI being released quarterly, and data from Omnitracs more readily available, our long-haul miles are a useful economic indicator.

Everyone is familiar with the dip in the economy that took place in late Q1-2020. The data in Figure 2 reflects this dip, followed by a slow recovery. A slight decline then followed when the second wave of COVID hit in June through September and November. It’s no surprise that the transportation industry has felt the impact of COVID, but we’ve seen some recovery – with many smaller fleets being impacted to the point of shutting down, while larger fleets have gained business and grown. Providing evidence of growth is the uptick in Omnitracs data from September to October as companies began to prepare for pre-holiday shipments.

Figure 2

2020 Omnitracs Long-Haul Miles Index vs. TSI Freight Index

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TSI Freight Index Omnitracs Miles Index

Omnitracs Miles Index closely parallels the TSI Freight Index



https://www.transtats.bts.gov/OSEA/TSI/

https://data.bts.gov/stories/s/9czv-tjte#demand-for-for-hire-transportation-services

Figure 3

2020 Omnitracs Long-Haul Miles Index vs. TSI Freight Index and GDP

Having this base of data, we can now explore the details behind the data and understand its impact on sectors, fleets, and the general public. Using these keen insights, and understanding where we’ve been, we can look ahead to 2021 and know where we are going. While transportation remains a necessary part of today’s ecosystem, it’s important to understand how fleets are balancing the dual, and often conflicting, purposes of increased production and safety.

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Transportation activity as an economic indicator is further evidenced when we overlay the quarterly gross domestic product (GDP) values. GDP is a monetary measure of the market value of all the final goods and services produced in a specific period. Because Omnitracs reports miles monthly – in real-time – it is a precursor to the GDP and TSI Freight Index, which reports data much later than when the data occurred. The Miles Index and GDP tend to rise and fall at the same time, as evidenced in Figure 3. The magnitude of change varies if the sectors driving GDP growth are not tied to transportation activities.

Figure 4

2020 COVID-19 Pandemic Effect on Converted Paper Product Manufacturing

The toilet paper shortage made for a bumpy ride during the early part of the pandemic. End-of-year holiday parties helped the industry celebrate.



As consumers, we all remember the toilet paper shortage last spring. As a result, that industry sector responded with an abnormal increase of miles driven in March, followed by a significant dip when supplies ran out. Although not as fast as we would have all liked, supplies finally returned to normal. As noted in Figure 4, the seasonality impact on converted paper product manufacturing took place the remainder of the year where activity dropped from October to December. With peak shipping occurring long before the peak shopping season began, the sector dipped in November in anticipation of the holidays. We began to see growth nearing the holidays when retail stores increased demand to box up deliveries and gifts. Additionally, despite the pandemic – and looking for something to celebrate – consumers stocked up on paper products for their traditional (and virtual) holiday parties.

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Figure 5

COVID-19 Pandemic Effect on the Sporting Goods Sector

Consumers can be cooped up for only so long. With gyms, yoga studios, and health facilities being shut down across the country, Americans took it upon themselves to stay healthy. As a result, the sporting goods sector took a nosedive in April and then immediately recorded a tremendous resurgence in May. From Pelotons to ellipticals to driveway hoops, we looked for new ways to stay active. Of course, whatever goes up, must come down. And it’s no different here, as the sector plummeted after initial demand went away and the supply chain was squeezed.

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6.5%

Always looking to stay active, consumers pushed the sporting goods sector to new heights.



Figure 6

Miles Growth by State April to August 2020

The regionality of where miles were driven as the country moved away from lockdowns and the supply chain became more manageable is clearly shown in Figure 6. There was very little movement in May – the USA-Canadian border closing and reduced port activity could have contributed to these factors – but activity quickly picked up in June and continued throughout the summer.

May June

July August

Miles driven across the country varied by state based upon retail, wholesale, and manufacturing demands with some states growing faster than others.



Figure 7

Manufacturing Miles and Manufacturing Sales Index

Production and manufacturing create demand for transportation services, which is why miles driven in the manufacturing sector tend to follow the Manufacturing Sales Index (Figure 7). After a reduction in manufacturing in April and May, this sector experienced peek growth in October – likely due to unexpected demand for certain product groups, such as paper products and sporting goods. As with many federal statistical reports, this data is released quarterly, whereas Omnitracs data is available in real-time, allowing us to predict what will happen in the future. This predictability helps fleets plan their business and hiring cycles so they can anticipate demand and respond accordingly.

Manufacturing Miles Manufacturing Sales Index

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The Manufacturing Index very closely marries the Manufacturing Miles driven. But since the Omnitracs data is available in real-time, whereas government data is released much later, is the dip in November miles a precursor to November sales?



There is a strong correlation in the relationship between miles driven in the retail sector and the reported Retail Sales Index. As we all know – and as shown in Figure 8 – the retail sector ground to a halt in April. It quickly rebounded as consumers got used to ordering online, no-contact pick up, and realizing they didn’t need to live without their favorite things.

Figure 8

Retail Miles and Retail Sales Index

Retail Miles Retail Sales Index

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Retail miles and retail sales correlate very closely month-to-month.



Figure 9

Month-to-Month Percent Change of Major Sector Miles

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Manufacturing Transportation and WarehousingRetail

The pandemic has impacted every industry – some have recovered quickly, while others continue to struggle.



Combining these sectors (manufacturing, retail, and wholesale), with the transportation and warehousing sector allows us to clearly see the differences in how each sector responded to the pandemic by percentage change from the previous month (Figure 9). The colorful differences are eye-opening:

• Transportation had substantial growth in Q1

• Retail had the greatest amount of swing from month to month (January through June)

• Retail displayed a more immediate recovery from the imposed lockdowns with a large spike in growth in May

Although the number of miles increased (Figure 10), it’s encouraging to see that fleets performed their miles with increased production efficiency – more miles per vehicle. In fact, Omnitracs saw a 6% increase in miles per vehicle from Q4-2019 to Q1-2020.

Figure 10

Miles per Vehicle

The disruptions in 2020 also led to some uneven demand, leading to fluctuations in driver utilization across all industries. While there was a downward trend in the first third of 2020 (Figure 11), the number of drivers saw an uptick in overall miles driven with peak utilization in September — yet still down from January 2020.

Figure 11

Percent of Drivers Who Are Active

Miles per Vehicle

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Last-Mile Transportation Activity

Last-mile fleets – those that move goods from a transportation hub to the final delivery destination – continued to meet the demand of growth in e-commerce by servicing more stops. In fact, 21% more stops were serviced in 2020, compared to 2019, with growth on an upward trajectory after the April pandemic dip (Figure 12).

Figure 12

Last-Mile Stops Serviced 2019 vs. 2020

E-commerce fueled continued growth in last-mile delivery.

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Throughout the pandemic, fleets quickly learned to increase operational efficiencies to meet productivity objectives. For last-mile fleets, specifically, Omnitracs measured equipment capacity utilization – a measure of how full a fleet’s equipment is to service a group of stops. An increase in capacity utilization indicates positive operational efficiency. As shown in Figure 13, this trend for last-mile fleets continues year-over-year.

Figure 13

Last-Mile Equipment Capacity Utilization 2018 through 2020

After a brief dip, equipment capacity utilization skyrocketed and continued to climb throughout the year.

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All three of the major sectors serviced in 2020 (manufacturing, retail, and wholesale) have a strong correlation with their associated sales index. Nearly mirroring each other, deliveries from last-mile customers are more closely tied to industry sales than long-haul customers’ miles (Figures 14-16).

Figure 14

Last-Mile Manufacturing Stops vs. Manufacturing Sales Index

Figure 15

Last-Mile Retail Stops vs. Retail Sales Index

Figure 16

Last-Mile Wholesale Stops vs. Wholesale Sales Index

Manufacturing Sales Index Manufacturing Stops Index

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Retail Sales Index Retail Stops Index

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Wholesale Sales Index Wholesale Stops Index

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Omnitracs stop data compares very closely to the corresponding industry’s sales index. This is a good representation of activity in these industries with stops being a strong predictor of sales.



In the long-haul market, we explored miles associated with the toilet paper and sporting goods sectors. Both saw huge spikes as a result of consumer needs during the pandemic. In retail, we take a deep dive into the differences in supplying groceries vs. alcohol. The variances are astounding! The notion that many Americans spent more on alcohol during the pandemic is supported with this data (Figure 17).

Using 2019 stop data as a baseline, both grocery and alcohol deliveries declined in April and May, but alcohol declined less. As lockdowns increased, and people realized they would be home longer, the market experienced a massive amount of alcohol delivery growth from June through September. In October, many cities imposed less restrictive bar and restaurant closings, impacting the market accordingly.

Figure 17

Last-Mile Grocery and Alcohol Stops Percent Change from 2019

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Alcohol distribution soared as grocery distribution declined as a result of the pandemic.



Safety

Figure 18

Speeding Events per 10k Miles

An open road became an invitation to speed with April and May recording the highest average driving speed to date.


The pandemic not only impacted the way people worked, shopped, and played, but also how they got from one destination to another. In many instances, people stopped traveling and our highways became speedways. Taking advantage of the open roads, people (including truck drivers) began to speed, leading to more collisions. SmartDrive data indicates that the average driving speed increased 7% from 2019 (33.6mph) to 2020 (35.8mph), with April and May 2020 recording the highest average driving speed to date (37.3mph) (Figure 18). Although the overall speeding event rate did not change over the course of 2020, speeding event rates varied throughout the year – depending on traffic on the roads. When the roads are open, however, the speeding event rate increases.

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Although speeding increased, in general, it was more apparent on holidays. In fact, the top five speeding event rates in the past two years occurred on holidays (Figure 19). These are days when, historically, there are less vehicles on the road – inviting drivers to get to their destination as quickly as possible.

Figure 19

Top 10 Days of Speeding Events

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Fleets continue to prioritize safety. We’re happy to report that, although speeding increased with less vehicles on the road, the number of individual drivers who exceeded the speed limit (as defined by their fleet) decreased (Figure 20). Unfortunately, the more speeding drivers do – without getting caught or being involved in an accident – the longer they’ll continue doing it.

Figure 20

Percent of Drivers Speeding

Unfortunately, holidays are an open invitation to speed.

Although speeding increased, the actual number of drivers speeding decreased.

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Safety

While prioritizing safety in the cab, fleets are also prioritizing safety to the cab. As previously noted, the percentage of drivers who exceeded their fleet’s speed improved, as did the number of Black Spot locations identified by Omnitracs Critical Event Recorders (Figure 21). Black Spots are locations where incidents occur at an abnormally high rate. Populated across the map, these locations continually change and are evaluated daily. As such, Black Spots can be communicated to drivers in the cab as they plan or approach these dangerous locations, further decreasing the likelihood of an incident, improving overall safety, and reducing fleet risk mitigation.

Figure 21

Number of Black Spot Locations

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Excessive Overspeed Hard Brake

With fewer drivers on the road, the number of Black Spot locations has decreased.


Safety

We began with Sagan’s quote, “You have to know the past to understand the present.” Although this report focused on 2020 – and the ramifications of a once-in-a-generation pandemic – the data in the report is a precursor to what is occurring in 2021…and beyond. Fleets are changing the way they do business, drivers are adapting to new routines, and businesses are transforming their interactions with drivers and vendors. Although many businesses suffered in 2020 due to the pandemic, many fleets flourished – particularly those with a strong foundational base, a strategic vision, and a program that helped attract and retain drivers. Change is happening quickly, and it’s the agile businesses that will survive by focusing on:

• Being nimble and having access to real-time business KPIs, analytics, and industry trend data to adapt.

• Diversifying across all areas of the business, e.g., domestic and imported products, a variety of customer industry segments/load types, etc.

• Being part of the e-commerce trend, especially given the pandemic-related acceleration.

• Vehicle maintenance needs due to higher vehicle usage.

Last but not least, tune into analytics so you can stay flexible and align your business with industry trends, economic upticks and downturns, and business needs. Timely data is key to understanding the business landscape, and adapting to change is critical.

Trends from government data can be helpful, but having real-time data by state, region, industry, and sector can help fleets plan for their individual business growth. With one of the largest continually updated transportation databases available in real-time, through a converged solution, Omnitracs helps fleets survive – and flourish.

This report is just the first in a series of data releases that will be issued throughout the years ahead. Look for future releases to ensure you have the most comprehensive metrics to help you plan your business goals and ensure future success.

Summary


About OmnitracsOmnitracs offers the only complete fleet intelligence software platform. Serving the largest for-hire and private fleets in the transportation and distribution industries, Omnitracs’ best-in-class solutions accelerate business success, improve efficiency, and enhance the driver experience for nearly 15,000 customers who collectively travel 250 million miles per week. Omnitracs pioneered digital transformation in trucking more than 30 years ago, and today offers a one-stop shop for enterprise-grade, data-driven solutions across compliance, telematics, workflow, routing, and video safety. Headquartered in Dallas, Omnitracs serves customers in over 50 countries and employs more than 2,000 people worldwide.

Find out more at omnitracs.com

http://www.omnitracs.com

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Omnitracs Industry Intelligence Report Understanding the