Innovation

Canada Cartage has implemented technological innovations in the transportation industry. Specifically, Canada Cartage has implemented onboard telematic devices in their trucks. Telematic devices measure the engine output, run diagnostics and analyze driver behaviour. This innovation was implemented to help Canada Cartage decrease their carbon emissions through diesel fuel consumption.

The innovation emerged when knowledge that such technology existed became apparent to employees of Canada Cartage, and an analysis of the impacts the company had on emissions was established. The idea came explicitly from fleet procurement and maintenance crew management. From there, all senior management and essential decision-making personnel were involved in the assessment of whether or not to implement this new technology. When it was decided that the innovation was beneficial, a third-party company was involved in the installation of the devices. The innovation was made possible due to the collaboration of Canada Cartage employees, third-party developers and "…the result of advances in technology in [the transportation] industry."

The innovation related to one of the missions of the company themselves: to help others in the communities where they work. By implementing this innovation, Canada Cartage is actively helping the environment, Canadian citizens and the safety of the communities in which they operate. The meaning and purpose of this innovation are to keep a positive corporate image in the eyes of consumers, create a competitive advantage and to take environmental and societal responsibility on their impacts as a company while increases business efficiency. This mission can be achieved due to the size and success of Canada Cartage as a company, since they “are leaders in the industry, not all companies have made these investments because it is not inexpensive to have these telematics units.” Canada Cartage has the financial ability in addition to corporate motivation to implement this innovation.

Inspiration

Canada Cartage is an industry leader in transportation innovation. One of the most pressing concerns within the transportation industry is the environmental and societal impact of carbon that is released by diesel trucks. Canada Cartage have implemented and changed company policies to reflect responsible consumption and production concerning the volume of carbon that is released from their trucks. This original idea was generated when Canada Cartage became aware of their emissions and the emissions’ subsequent effects. The idea came from the management team in fleet procurement and maintenance crew; they were the first in the company to acknowledge the issue and propose a mitigation solution. From there, the company collected information on the latest technologies available. Once the discovery of onboard telematics technology from third parties was established, the idea went to senior management. Senior management then created business case scenarios to ensure the implementation would be beneficial. The result of their studies indicated that the innovation would not only benefit the company itself, but also their customers, the environment and society. Mr. Zavitz acknowledged that third-party companies "saw the need by trucking companies to reduce their fuel spent and saw the environmental attitudes towards the environment change, so it became more important that companies like ourselves were strong advocates for environmental issues."

There were two motivations for implementing this innovation: good business practices and corporate citizenship. By implementing the telematics innovation, Canada Cartage lowered their fuel consumption, which reduced their costs as a business and ultimately created positive benefits for their bottom line. In addition to financial benefits, Canada Cartage recognized the benefits this innovation had on society and the environment. Canada Cartage is motivated to become industry leaders in innovation “not only because [they] think its the right thing to do but because [their] customers push [them] to do that." Canada Cartage had the motivation of creating a better corporate image, increasing competitive advantage, developing corporate social responsibility and economic growth by implementing this innovation.

Overall impact

The impacts of this innovation on Canada Cartage as a business were increases in economic growth. The transportation industry is “a very low margin business so everything [they] can do to be efficient in all areas of [their] business is critical for the survival of [their] company." By utilizing this innovation, they cut fuel costs, which in turn benefited their bottom line. As noted by Mr. Zavitz, "we spend eighty million dollars a year on fuel so a 1% reduction is eight-hundred thousand dollars, so it is a huge benefit to us”.

The environmental impacts were the lowering of Canada Cartage's carbon footprint. By utilizing the onboard telematics to discover the causes of high fuel consumption, Canada Cartage lowered their carbon footprint through tracking information such as jackrabbit starts, hard braking, idling times and various other transportation factors that increased fuel consumptions and carbon emissions. Being able to follow the behaviour of drivers created a significant impact as “their driving style is the number one factor that can influence fuel consumption." This innovation impacted society by making the transportation industry safer. The information gathered from these devices are generated into reports. From these reports, Canada Cartage can discover where more training is necessary, any unsafe hazards, or habits of drivers. From a management viewpoint, Mr. Zavitz explained one of the most beneficial impacts are changes in monitoring ability: "once the drivers leave our terminals, in the past we would lose visibility to [what our drivers are up to every day], now with the technology we've got full visibility to how they are driving and whether they are driving in a safe manner or not".

The short-term effects of this innovation were non-beneficial for Canada Cartage. Due to the high cost of implementation, Canada Cartage experienced financial loss. The effects of this innovation not only negatively affected finances but also productivity and changes in management. By implementing new technologies, a shift in management was created, new tasks to individual jobs were added (report generation, increased workload) and drivers became more hesitant on the idea of "big brother" continually watching them. The short-term effects of this innovation were dramatic shifts in internal processes. In the long-term, Canada Cartage saw positive results. While the initial cost was high, this innovation generated cost savings for the company. As they were one of the first in the industry to implement this innovation, a competitive advantage was created as well. Drivers experienced more training and techniques, which heightened the education of drivers and increased their skill levels. The long-term effects of this innovation were keeping existing customers pleased while also providing the opportunity to attract new customers to their brand.

The concrete evidence that proves an impact has occurred is broken down into three categories: idle time, miles per gallon and fuel spending. After analysis of the onboard telematics innovation, Canada Cartage found a decrease in idling times. Each month, reports about idle times were created and benchmarked against industry targets, which allowed for a measurement of success and confirmed lower idling times were lower because of telematics. Onboard telematics also enabled an analysis of miles per gallon performance. Due to the advancement in techniques that the technology provided, Canada Cartage could increase the number of miles per gallon on their trucks. Due to this, fuel spending could decreased; the more miles per gallon and efficient driver practices created a decrease in annual spending on diesel fuel. This evidence allowed Canada Cartage to conclude that “…at the end of the day [they] can provide as good service for [their] customers by being fuel efficient as [they] can by wasting fuel…implementing the innovation] was a pretty obvious thing”.

Business benefit

There were many benefits to Canadian Cartage by the implementation of their onboard telematics innovation. The first advantage was that it helped decrease their diesel fuel consumption which they spend approximately $80 million on per year in fuel. By reducing fuel consumption by as little as 1% can result in a $800,000 decrease in costs. This innovation also helped track if drivers were efficiently accelerating, idling unnecessarily, or participating in unsafe safe driving practices. By monitoring driver habits, Canada Cartage can educate their drivers to ensure they are using the most fuel-efficient driving behaviours, which will result in significant fuel cost savings and the ability to reinvest into further innovations or make other business advancements.

Another benefit the innovation provided was a good corporate image. Canada Cartage took the initiative to become as environmentally friendly as possible and be socially responsible. In turn, they projected a positive, ethical, and responsible corporate image to their customers and to the public. This provides Canada Cartage with a competitive advantage against their industry competitors, as new clients choose them over their competition due to their innovative technology and responsible operating practices. This could result in new long-term partnerships and relationships, and could possibly increase Canada Cartage’s revenues and market share.

Social and environmental benefit

The environmental benefit is the reduction of the Canada Cartage’s carbon footprint. Since introducing onboard telematics devices, idle times have decreased, miles per gallon have increased, and fuel spending per truck has decreased. This means that Canada Cartage are using fuel more efficiently and, therefore, is reducing the amount of fuel they are consuming. This drastically reduces the carbon output of the trucks and, in turn, reduces Canada Cartage’s contribution to climate change.

The societal benefit of the innovation are its safety features that ensure better safety on the roads for other divers and communities. The telematic devices have speed governors which prevent trucks from exceeding 105 km/hr. This is a safety feature for not only the driver of the truck, but also for other drivers on the road. The telematic systems also track the driver speeds and locations, so management within Canada Cartage can easily find out if or when a truck is speeding, and subsequently educate those drivers on safer driving habits. This benefits society because the drivers will be more educated about safe driving practices, which are important while driving in school and residential zones, on highways, and on city streets. Telematics contribute to safer environments for driver and the environment around them.

Interview

David Zavitz, CAO